| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | n/a | |
| Graham Formula | 6.77 | 1730 |
Huayi Electric Company Limited is a diversified Chinese electric equipment and renewable energy company headquartered in Yueqing, China. Founded in 1998 and listed on the Shanghai Stock Exchange, Huayi Electric operates across multiple segments including wind turbine generator systems, power transmission equipment, and environmental services. The company manufactures a comprehensive range of electrical products including circuit breakers, switchgears, transformers, and power line accessories. Beyond equipment manufacturing, Huayi Electric engages in wind farm development, operation, and technical advisory services, positioning itself in China's growing renewable energy sector. The company has expanded into environmental services including sewage treatment, soil remediation, and solid waste disposal, demonstrating diversification beyond its core electrical equipment business. As a subsidiary of Huayi Group, the company leverages group resources while serving China's infrastructure development and renewable energy transition needs.
Huayi Electric presents significant investment risks based on its FY2022 financial performance. The company reported a substantial net loss of CNY -484.5 million despite generating CNY 296.5 million in revenue, indicating severe profitability challenges. With a negative EPS of -0.64 CNY and no dividend distribution, the company faces operational headwinds. While it maintains CNY 241.2 million in cash reserves, the high total debt of CNY 528.2 million raises concerns about financial stability. The extremely low beta of 0.016 suggests minimal correlation with broader market movements, which could be either a defensive characteristic or indicate lack of market confidence. Investors should carefully assess the company's turnaround strategy and ability to improve operational efficiency in China's competitive renewable utilities sector.
Huayi Electric operates in a highly competitive landscape within China's renewable utilities and electrical equipment sectors. The company's competitive positioning is challenged by its diversified but potentially unfocused business model spanning wind energy equipment, traditional electrical components, and environmental services. While its vertical integration from equipment manufacturing to wind farm development provides potential synergies, the significant financial losses suggest execution challenges. The company's subsidiary status under Huayi Group could provide financial and operational support, but the current debt levels indicate strained resources. In the wind turbine segment, Huayi faces intense competition from larger, more specialized manufacturers with greater scale and technological capabilities. The environmental services division operates in a fragmented but growing market, though profitability in this sector requires significant scale and technical expertise. The company's broad product portfolio across MV/LV switchgears, transformers, and power systems provides some diversification benefits but may dilute focus and competitive advantage in any single segment. The negative financial performance suggests Huayi Electric lacks sustainable competitive advantages in its current operational structure and may need strategic refocusing or consolidation to achieve viability.