| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 36.64 | -29 |
| Intrinsic value (DCF) | 283.52 | 446 |
| Graham-Dodd Method | 7.35 | -86 |
| Graham Formula | 37.33 | -28 |
Wuxi Longsheng Technology Co., Ltd. is a specialized automotive components manufacturer focused on engine exhaust gas recirculation (EGR) systems, playing a critical role in China's automotive emissions control sector. Founded in 2004 and headquartered in Wuxi, China, the company engages in the research, development, production, and sale of sophisticated EGR systems that help reduce nitrogen oxide emissions from internal combustion engines. Longsheng's comprehensive product portfolio includes electric EGR valves, electronic throttles, exhaust back pressure valves, brake valves, and electronic control units for both diesel and gasoline engines. Operating in the Consumer Cyclical sector's Auto Parts industry, the company serves China's massive automotive market during a period of increasing environmental regulations and emission standards. As China implements stricter emissions controls similar to Euro 6 standards, Longsheng's specialized expertise positions it as a key supplier to domestic and international automotive manufacturers seeking compliant solutions. The company's technological focus on emission reduction systems aligns with global trends toward cleaner transportation and sustainable automotive technologies.
Wuxi Longsheng Technology presents a specialized investment opportunity in China's automotive emissions control segment, trading at a market capitalization of approximately CNY 13.7 billion. The company demonstrates solid financial performance with CNY 2.4 billion in revenue and CNY 224 million net income, translating to diluted EPS of CNY 0.98. While the beta of 1.24 indicates higher volatility than the market, the company maintains reasonable financial health with positive operating cash flow of CNY 388 million and a dividend yield supported by CNY 0.20 per share distribution. Key investment considerations include Longsheng's niche positioning in emission control systems benefiting from China's tightening environmental regulations, though the company faces exposure to cyclical automotive demand and potential technological shifts toward electric vehicles. The capital expenditure of CNY 328 million suggests ongoing investment in production capacity, while the debt level of CNY 879 million requires monitoring relative to cash reserves of CNY 342 million.
Wuxi Longsheng Technology competes in the specialized automotive EGR systems market with a focused position as a Chinese domestic supplier. The company's competitive advantage stems from its deep specialization in EGR technology and established relationships within China's automotive supply chain. Longsheng benefits from localization advantages, including proximity to major Chinese automotive manufacturers and understanding of domestic regulatory requirements. The company's comprehensive product range covering various EGR valve types and electronic control units provides customers with integrated solutions. However, Longsheng faces significant competitive pressures from both international Tier 1 suppliers with broader product portfolios and larger R&D capabilities, as well as other Chinese component manufacturers competing on price. The company's relatively smaller scale compared to global automotive suppliers may limit its ability to invest in next-generation technologies, particularly as the industry transitions toward electrification. Longsheng's positioning is particularly vulnerable to technological disruption from electric vehicles that eliminate the need for traditional EGR systems entirely. The company's future competitiveness will depend on its ability to adapt its emission control expertise to hybrid technologies and potentially diversify into adjacent automotive components while maintaining cost competitiveness against both domestic and international rivals.