| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 26.38 | 73 |
| Intrinsic value (DCF) | 6.77 | -56 |
| Graham-Dodd Method | 3.80 | -75 |
| Graham Formula | 7.41 | -51 |
Zhejiang Longsheng Group Co., Ltd. is a diversified Chinese chemical and manufacturing conglomerate with a 50-year history headquartered in Shaoxing. The company operates across multiple business segments including textile chemicals, fine chemical intermediates, construction chemicals, inorganic chemicals, and auto parts manufacturing. With products distributed to approximately 50 countries globally, Longsheng has established itself as a significant player in China's basic materials sector. The company's diversified portfolio spans chemical production for industrial applications and precision auto components such as sideplates, engine boards, floor components, and door assemblies. Additionally, Longsheng maintains operations in logistics services, steel product sales, real estate development, and financial investments. This vertical integration and business diversification provide resilience against market cyclicality while leveraging China's manufacturing ecosystem. As a Shanghai-listed enterprise, Zhejiang Longsheng represents China's industrial chemical sector's evolution from basic production to value-added specialized manufacturing.
Zhejiang Longsheng presents a mixed investment profile with several attractive fundamentals offset by sector-specific risks. The company demonstrates solid profitability with net income of CNY 2.03 billion on revenue of CNY 15.88 billion, yielding healthy margins. Strong operating cash flow of CNY 9.27 billion and substantial cash reserves of CNY 18.06 billion provide financial stability and flexibility. The modest beta of 0.595 suggests lower volatility than the broader market, while a dividend yield supported by CNY 0.45 per share offers income appeal. However, total debt of CNY 11.38 billion requires monitoring, and the company's exposure to cyclical chemical and automotive sectors presents inherent volatility risks. The diversified business model provides some protection, but investors should weigh China's industrial slowdown and environmental regulatory pressures against the company's operational efficiency and international market reach.
Zhejiang Longsheng's competitive positioning is defined by its diversified chemical and manufacturing portfolio that spans multiple industrial segments. The company's core strength lies in its vertical integration across chemical production and auto parts manufacturing, creating synergies in raw material sourcing and production efficiency. Its extensive product range covering textile chemicals, construction chemicals, and precision auto components provides cross-selling opportunities and reduces dependency on any single market segment. The company's international reach across 50 countries demonstrates competitive export capabilities, particularly in emerging markets. However, Longsheng faces intense competition from both specialized chemical producers and larger conglomerates. Its competitive advantages include established production facilities, long-term industry relationships, and diversified revenue streams. The company's scale provides procurement advantages, but it may lack the specialization focus of pure-play chemical companies. Environmental compliance costs and technological innovation requirements present ongoing challenges in maintaining competitive positioning against both state-owned enterprises and private sector rivals in China's increasingly competitive chemical industry.