| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 27.64 | 594 |
| Intrinsic value (DCF) | 1.74 | -56 |
| Graham-Dodd Method | 0.93 | -77 |
| Graham Formula | 0.95 | -76 |
Liuzhou Chemical Industry Co., Ltd. is a specialized chemical fertilizer producer based in Liuzhou, China, with operations dating back to 1967. The company operates in the agricultural inputs sector, manufacturing essential chemical products including synthetic ammonia, concentrated nitric acid, and hydrogen peroxide that serve China's vast agricultural industry. As a domestic producer in the basic materials sector, Liuzhou Chemical plays a crucial role in supporting China's food security and agricultural productivity through its fertilizer solutions. The company maintains both domestic market presence and export operations, positioning itself within China's strategic chemical industry framework. With its long-standing operational history and specialized product portfolio, Liuzhou Chemical serves as a regional supplier in China's agricultural value chain, contributing to the nation's fertilizer self-sufficiency goals while navigating the competitive landscape of chemical production.
Liuzhou Chemical presents a mixed investment profile with several notable strengths and risks. The company maintains a strong financial position with CNY 427.8 million in cash against only CNY 23.1 million in total debt, indicating robust liquidity and low leverage. Positive operating cash flow of CNY 51.6 million and net income of CNY 30.2 million demonstrate operational profitability. However, the company's modest market capitalization of CNY 2.88 billion and low beta of 0.344 suggest limited market attention and potentially lower volatility. The absence of dividend payments may deter income-focused investors, while the company's regional focus and specialization in basic chemical fertilizers expose it to agricultural commodity cycles and regulatory changes in China's chemical industry. The investment case hinges on operational efficiency and niche market positioning rather than growth expansion.
Liuzhou Chemical operates in a highly competitive Chinese fertilizer market dominated by larger state-owned and private chemical companies. The company's competitive positioning is primarily regional rather than national, with its Liuzhou base providing local market advantages in Guangxi province but limiting broader geographic reach. Its product focus on basic chemical fertilizers like synthetic ammonia and nitric acid places it in the middle tier of China's chemical industry, competing against both specialized fertilizer producers and diversified chemical conglomerates. The company's competitive advantages include its long-standing operational history since 1967, which provides established production expertise and potentially stronger local supplier relationships. However, it faces significant scale disadvantages compared to national champions like Sinofert Holdings and Yara China, which benefit from larger production capacities, broader distribution networks, and more diversified product portfolios. The company's export operations provide some market diversification but remain limited compared to international competitors. Regulatory compliance and environmental standards represent ongoing challenges in China's chemical sector, where larger players typically have better resources to adapt to changing requirements. The company's niche positioning may provide stability but limits growth prospects in a consolidating industry.