| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | n/a | |
| Graham Formula | 23.13 | 3025 |
Sichuan Western Resources Holding Co., Ltd. is a Chengdu-based Chinese conglomerate operating in the industrials sector with a dual focus on non-ferrous metals and finance leasing services. The company represents China's strategic push to develop its western regions' natural resources while providing complementary financial services to support industrial development. As a resource holding company, Sichuan Western Resources taps into China's vast non-ferrous metal reserves, which are critical for various manufacturing and technology applications. The company's finance leasing division offers equipment financing solutions to industrial clients, creating synergies with its core metals business. Operating on the Shanghai Stock Exchange, the company plays a role in China's broader industrial supply chain, though it faces significant challenges in its current operational and financial performance. This unique combination of resource extraction and financial services positions the company at the intersection of China's industrial and financial sectors.
Sichuan Western Resources presents substantial investment risks based on its FY2021 financial performance. The company reported a massive net loss of -CNY 622.7 million, negative operating cash flow of -CNY 77.7 million, and a severely diluted EPS of -0.94, indicating deep operational challenges. While the company maintains a modest market capitalization of approximately CNY 490 million and pays a dividend of CNY 0.49 per share, these positive factors are overshadowed by concerning financial metrics. The company's extremely low cash position of CNY 62,681 relative to its operations and minimal debt of CNY 102,388 suggest either a highly leveraged position elsewhere or severe liquidity constraints. Investors should approach with extreme caution given the significant losses and cash flow problems, despite the company's strategic positioning in China's resource sector.
Sichuan Western Resources operates in a highly challenging competitive environment within China's conglomerate and industrial sectors. The company's dual focus on non-ferrous metals and finance leasing creates a unique but problematic positioning. In the non-ferrous metals segment, it competes against much larger, state-owned enterprises with superior scale, operational efficiency, and financial resources. The finance leasing division faces competition from both specialized financial institutions and larger conglomerates with more robust financial services operations. The company's competitive disadvantages are evident in its financial performance - significant losses and negative cash flow indicate an inability to compete effectively in either business segment. While its location in Sichuan province provides access to western China's resource base, this geographical advantage hasn't translated into operational success. The company's minimal cash reserves and substantial losses suggest it lacks the financial stability to invest in competitive improvements or weather market downturns. Its small market capitalization further limits its ability to compete with larger, better-capitalized players in both the metals and financial services industries.