| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 22.74 | 727 |
| Intrinsic value (DCF) | 1.84 | -33 |
| Graham-Dodd Method | 0.95 | -65 |
| Graham Formula | n/a |
Shandong Homey Aquatic Development Co., Ltd. is a leading Chinese marine food company specializing in premium aquatic products including sea cucumbers, jellyfish, oysters, kelps, shrimps, crabs, and abalones. Founded in 1993 and headquartered in Rongcheng, China, the company operates within the consumer defensive sector's agricultural farm products industry. Homey Aquatic has established an integrated business model spanning from aquaculture to retail distribution through approximately 300 chain stores and e-commerce platforms. The company leverages China's growing demand for high-quality seafood and traditional marine delicacies, particularly sea cucumbers which are valued in Chinese cuisine and traditional medicine. With its vertically integrated operations and strong brand presence in Shandong province, Homey Aquatic positions itself as a specialist in marine treasures, catering to both domestic consumers and export markets while maintaining quality control throughout its supply chain.
Shandong Homey Aquatic presents a mixed investment profile with several concerning financial metrics. The company operates with substantial debt (CNY 2.4 billion) relative to its market capitalization (CNY 3.84 billion) and cash position (CNY 414 million), creating financial leverage risks. While revenue of CNY 1.42 billion appears healthy, net income of CNY 43.4 million represents a thin 3.1% margin, indicating operational efficiency challenges. Positive operating cash flow of CNY 588 million is offset by heavy capital expenditures (CNY -731 million), suggesting ongoing significant investments in operations. The low beta of 0.478 indicates defensive characteristics, potentially appealing to risk-averse investors, but the modest dividend yield and diluted EPS of CNY 0.03 limit income appeal. The company's niche focus on premium marine products provides some insulation from commodity price fluctuations but also constrains market opportunity.
Shandong Homey Aquatic's competitive positioning is defined by its specialization in premium marine products, particularly sea cucumbers, which command higher margins than commodity seafood. The company's vertically integrated model from aquaculture to retail provides quality control advantages and brand building capabilities through its 300-store network. However, this integration requires substantial capital investment, as evidenced by the significant capex outflows. Homey's geographic focus in Shandong province provides regional strength but limits national scale compared to larger competitors. The company's product diversification across multiple marine species helps mitigate risks associated with any single product category. Its e-commerce presence represents a modern distribution channel but faces intense competition from larger platforms. The premium positioning creates some pricing power but also makes the company vulnerable to economic downturns affecting discretionary spending on luxury food items. The high debt load constrains strategic flexibility and increases vulnerability to interest rate changes or revenue disruptions.