| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 15.89 | 66 |
| Intrinsic value (DCF) | 5.79 | -39 |
| Graham-Dodd Method | 2.86 | -70 |
| Graham Formula | n/a |
Chen Ke Ming Food Manufacturing Co., Ltd. is a leading Chinese packaged food company specializing in the research, development, production, and sale of fine dried noodles and related wheat flour products. Founded in 1984 and headquartered in Changsha, China, the company has established itself as a prominent player in China's consumer defensive sector. Chen Ke Ming offers a diverse product portfolio including nutrition, power, wish, high-gluten, gift, and children series noodles, along with specialized offerings like King Chef, Happy Kitchen, wavy noodles, fresh wet noodles, Daoxiao noodles, and wheat flour series. Operating in the essential packaged foods industry, the company benefits from stable demand patterns characteristic of staple food products in the Chinese market. With a market capitalization of approximately CNY 3.27 billion and annual revenue exceeding CNY 4.56 billion, Chen Ke Ming maintains significant production capabilities and distribution networks throughout China. The company's long-standing presence since 1984 provides deep industry expertise and brand recognition in the competitive Chinese noodle market, positioning it as a reliable supplier of essential food products to Chinese consumers.
Chen Ke Ming presents a mixed investment profile with both attractive defensive characteristics and concerning financial metrics. The company operates in the stable consumer defensive sector with a low beta of 0.435, suggesting lower volatility compared to the broader market. However, investors should note concerning financial indicators including thin net margins of approximately 3.2% on CNY 4.57 billion revenue, resulting in net income of only CNY 145.9 million. The company maintains a significant debt load with total debt of CNY 1.96 billion against cash equivalents of CNY 357.5 million, indicating potential liquidity concerns. While the company pays a dividend yielding approximately 3.7% based on current share price, the capital expenditure of CNY 343 million exceeded operating cash flow of CNY 280.9 million, suggesting negative free cash flow. The essential nature of noodle products provides revenue stability, but competitive pressures and thin margins present significant challenges for sustainable profitability growth.
Chen Ke Ming operates in the highly competitive Chinese packaged noodle market, where it faces intense competition from both large-scale industrial producers and regional specialty manufacturers. The company's competitive positioning is characterized by its long-standing brand presence since 1984 and diverse product portfolio targeting different consumer segments including children, health-conscious consumers, and premium gift markets. However, Chen Ke Ming's competitive advantages appear limited by several factors. The noodle manufacturing industry typically features low barriers to entry and high competition on price, contributing to the company's thin profit margins. While the company's product diversification across multiple noodle types and wheat flour provides some insulation against market shifts, it lacks clear differentiation in a crowded marketplace. The company's financial metrics suggest operational challenges, with net margins of only 3.2% indicating potential inefficiencies or intense price competition. Chen Ke Ming's geographic concentration in China also exposes it to regional economic fluctuations and changing consumer preferences. The company's significant debt load relative to its cash position may limit its ability to invest in innovation or respond aggressively to competitive threats. In the evolving Chinese food market, where consumers are increasingly seeking healthier, premium, and convenience-oriented options, Chen Ke Ming must demonstrate stronger innovation capabilities and operational efficiency to maintain its market position against both established competitors and emerging disruptors.