| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 39.72 | 138 |
| Intrinsic value (DCF) | 8.64 | -48 |
| Graham-Dodd Method | 5.68 | -66 |
| Graham Formula | 4.81 | -71 |
Shandong Nanshan Zhishang Sci-Tech Co., Ltd. is a prominent Chinese manufacturer specializing in worsted compact fabrics, a high-quality textile used primarily in formal and business wear. Founded in 2007 and headquartered in Yantai, Shandong province, the company operates within the consumer cyclical sector, catering to demand for premium apparel. Its integrated business model encompasses manufacturing, branding, and sales under well-known labels such as Nanshan, Dellma, Modarte, and Mens Planet. This vertical integration allows Nanshan Zhishang to control quality from raw material to finished garment, serving both domestic Chinese and international markets. The company's focus on worsted fabrics positions it in a specialized niche of the broader textile and apparel manufacturing industry, targeting consumers and businesses seeking durable, high-end suiting materials. As a key player in China's substantial textile export economy, Shandong Nanshan Zhishang Sci-Tech leverages technical expertise and brand development to compete in the global market for quality textiles and apparel.
Shandong Nanshan Zhishang presents a mixed investment profile. On the positive side, the company is profitable with a net income of CNY 190.8 million on revenue of CNY 1.62 billion for the period, translating to a diluted EPS of CNY 0.50. It also pays a dividend of CNY 0.15 per share, indicating a commitment to shareholder returns. However, significant concerns exist. The company's capital expenditures of CNY -910 million vastly exceeded its operating cash flow of CNY 242.9 million, suggesting heavy investment or potential cash flow strain. Furthermore, total debt of CNY 1.55 billion outweighs its cash and equivalents of CNY 599.7 million, indicating a leveraged balance sheet. The beta of 0.761 suggests lower volatility than the market, which could be attractive to risk-averse investors, but the high capex and debt levels pose substantial financial risks that require careful monitoring.
Shandong Nanshan Zhishang's competitive positioning is defined by its specialization in worsted compact fabrics, a premium segment of the textile market. This focus provides a potential advantage over broader commodity fabric producers by allowing for higher margins and targeted branding. The company's ownership of multiple brands (Nanshan, Dellma, Modarte, Mens Planet) enables it to address different consumer segments and price points within the formalwear market. Its integrated model, covering fabric production and garment manufacturing, offers supply chain control and quality assurance. However, the company operates in the highly competitive and fragmented global apparel manufacturing industry. Its scale is modest compared to global giants, which may limit its bargaining power for raw materials and distribution. The high capital expenditure reported suggests significant investment, possibly in modernizing equipment to improve efficiency or capacity, which is crucial for maintaining competitiveness against rivals with lower cost bases. Success hinges on its ability to defend its niche with superior product quality and brand strength, as it likely cannot compete on cost alone with mass-market manufacturers. The debt level is a competitive concern, as it may constrain financial flexibility needed to respond to market shifts or invest in growth compared to less leveraged competitors.