| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 39.64 | -59 |
| Intrinsic value (DCF) | 17.97 | -81 |
| Graham-Dodd Method | 7.23 | -92 |
| Graham Formula | n/a |
Hubei Feilihua Quartz Glass Co., Ltd. is a leading Chinese specialty materials company with over 55 years of expertise in manufacturing high-purity quartz materials and quartz fiber products. Founded in 1966 and headquartered in Jingzhou, China, the company serves mission-critical applications across aerospace, semiconductor manufacturing, optical fiber communications, precision optics, and fine machining industries. As a key player in China's basic materials sector, Feilihua leverages its deep technical capabilities to produce quartz materials that meet stringent purity and performance requirements for advanced technological applications. The company's products are essential components in semiconductor fabrication equipment, satellite systems, high-speed communication networks, and precision optical instruments. Operating on the Shenzhen Stock Exchange, Feilihua has established itself as a vital supplier to China's growing high-tech manufacturing ecosystem, benefiting from the country's push toward technological self-sufficiency and advanced materials development. With its specialized manufacturing capabilities and long-standing industry presence, the company occupies a strategic position in the global supply chain for high-performance quartz materials.
Hubei Feilihua presents an intriguing investment case with strong profitability metrics but faces significant concentration risks. The company demonstrates robust financial performance with a net income margin of approximately 18% and healthy operating cash flow of CNY 264.8 million. With a market capitalization of CNY 43.2 billion and low beta of 0.18, the stock shows defensive characteristics relative to broader market movements. However, investors should note the substantial capital expenditures (CNY -369.9 million) exceeding operating cash flow, indicating aggressive expansion or capacity building. The company maintains a conservative debt profile with total debt of CNY 191.5 million against cash reserves of CNY 685.2 million, providing financial flexibility. The dividend yield, while modest at approximately 0.3% based on current metrics, signals management's commitment to shareholder returns. Primary risks include dependence on China's semiconductor and aerospace sectors, potential technology disruption, and exposure to geopolitical tensions affecting high-tech supply chains.
Hubei Feilihua's competitive positioning is defined by its specialized focus on high-purity quartz materials within China's strategic materials ecosystem. The company benefits from significant barriers to entry in quartz glass manufacturing, which requires sophisticated technical expertise, specialized equipment, and stringent quality control processes developed over decades. Feilihua's competitive advantage stems from its 55-year heritage, deep relationships with Chinese aerospace and semiconductor clients, and positioning as a domestic supplier amid China's push for supply chain independence in critical materials. The company's low beta suggests it operates in a relatively insulated niche with limited direct competition from broader industrial materials players. However, Feilihua faces intensifying competition from global quartz specialists and potential technology substitution risks. Its competitive weaknesses include limited international presence compared to global leaders, dependence on Chinese industrial policy, and vulnerability to cyclical downturns in semiconductor capital expenditure. The company's strategic value lies in its role supporting China's semiconductor equipment localization efforts, but this also creates concentration risk. Future competitiveness will depend on maintaining technological parity with international standards while navigating evolving trade restrictions and supply chain dynamics affecting high-tech materials.