| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 23.29 | -15 |
| Intrinsic value (DCF) | 8.92 | -67 |
| Graham-Dodd Method | 6.93 | -75 |
| Graham Formula | 7.61 | -72 |
Nantong Jiangshan Agrochemical & Chemicals Co., Ltd. is a prominent Chinese agrochemical manufacturer specializing in the production and distribution of crop protection products and industrial chemicals. Headquartered in Nantong, China, the company operates in the basic materials sector with a diverse portfolio including herbicides (glyphosate, acetochlor), insecticides (dichlorvos, imidaclothiz), fungicides, and various chemical intermediates. The company serves both domestic and international markets, exporting to 40 countries across Asia, Europe, the Americas, and Africa. As a key player in China's agricultural chemical industry, Nantong Jiangshan leverages its integrated chemical production capabilities to serve the growing global demand for crop protection solutions. The company's product range also includes specialty chemicals like flame retardants and insulating materials, demonstrating diversification beyond traditional agrochemicals. With China's position as a global agrochemical production hub, Nantong Jiangshan represents an important supplier in the worldwide agricultural value chain.
Nantong Jiangshan presents a mixed investment profile with several concerning financial metrics. While the company maintains a reasonable market position in China's agrochemical sector with international export reach, its financial performance raises significant concerns. The company reported negative free cash flow (operating cash flow of CNY 347 million minus capital expenditures of CNY -1.26 billion), indicating substantial investment requirements that exceed operational cash generation. With a net income margin of approximately 4.1% and diluted EPS of CNY 0.52, profitability appears modest in a competitive industry. The debt level of CNY 1.51 billion against cash reserves of CNY 1.13 billion suggests adequate but not strong liquidity. The beta of 0.717 indicates lower volatility than the broader market, which may appeal to risk-averse investors, but the overall financial picture suggests caution until the company demonstrates improved cash flow generation and return on invested capital.
Nantong Jiangshan operates in the highly competitive global agrochemical market, where it faces pressure from both multinational giants and domestic Chinese producers. The company's competitive positioning is primarily as a mid-tier producer with strength in generic agrochemicals, particularly glyphosate and other herbicides. Its integrated production capabilities for chemical intermediates provide some cost advantages, allowing backward integration into raw materials. However, the company lacks the research and development scale of global leaders, limiting its ability to develop proprietary products and higher-margin solutions. The export reach to 40 countries demonstrates distribution capabilities, but likely focuses on price-sensitive markets rather than premium segments. The company's diversification into fine chemicals and specialty materials represents a strategic move to reduce reliance on cyclical agrochemical markets, though these segments likely contribute minimally to overall revenue. In the Chinese domestic market, the company benefits from local manufacturing presence and understanding of regulatory requirements, but faces intense competition from numerous similar-sized producers. The negative free cash flow suggests the company may be investing heavily to maintain or improve its competitive position, potentially through capacity expansion or efficiency improvements, but this creates financial strain in the short to medium term.