| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 17.05 | 436 |
| Intrinsic value (DCF) | 1.65 | -48 |
| Graham-Dodd Method | n/a | |
| Graham Formula | n/a |
Long Yuan Construction Group Co., Ltd. is a prominent Chinese construction company headquartered in Shanghai with over four decades of industry experience since its founding in 1980. Specializing in diverse construction projects across China, the company operates in the Engineering & Construction sector within the Industrials industry. Long Yuan's comprehensive service portfolio includes stadium construction, housing developments, educational facilities, medical projects, industrial factories, high-rise office buildings, and hotel/commercial complexes. The company also demonstrates expertise in infrastructure development through flyovers, roads, expressways, and bridges. Additional specialized services encompass air-conditioning equipment installation, steel structure implementation for airport terminals, and sophisticated decoration works for various premium facilities including indoor skiing sites, government buildings, and academic centers. With its strong presence in Shanghai and extensive project capabilities, Long Yuan Construction Group represents a significant player in China's massive construction and infrastructure development market.
Long Yuan Construction Group presents a high-risk investment profile characterized by significant financial challenges. The company reported a substantial net loss of CNY -663 million on revenues of CNY 9.1 billion for the period, with negative EPS of -0.43 CNY. While the company maintains a reasonable cash position of CNY 1.3 billion and generated positive operating cash flow of CNY 1.4 billion, it carries an exceptionally high debt burden of CNY 20.2 billion, creating substantial leverage concerns. The low beta of 0.322 suggests relative stability compared to the broader market, but the absence of dividends and persistent profitability issues raise serious concerns about the company's financial sustainability. Investors should carefully assess the company's ability to manage its debt load and return to profitability before considering investment.
Long Yuan Construction Group operates in China's highly competitive construction sector, where it faces intense competition from both state-owned enterprises and private contractors. The company's competitive positioning is challenged by its significant financial difficulties, including substantial losses and high debt levels, which may impair its ability to bid competitively on large-scale projects. While Long Yuan demonstrates technical capabilities across diverse project types including stadiums, educational facilities, and infrastructure projects, its financial constraints likely limit its competitive advantage compared to better-capitalized rivals. The company's specialization in multiple construction segments provides some diversification benefits but may also dilute its focus compared to more specialized competitors. Its Shanghai headquarters location provides access to one of China's most dynamic construction markets, but also places it in direct competition with some of the country's largest and most sophisticated construction firms. The company's four decades of experience represents a potential strength, though this must be weighed against its current financial challenges in assessing its competitive positioning within the crowded Chinese construction landscape.