| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 23.71 | 145 |
| Intrinsic value (DCF) | 2.12 | -78 |
| Graham-Dodd Method | 2.37 | -76 |
| Graham Formula | n/a |
Black Peony (Group) Co., Ltd. is a diversified Chinese conglomerate with core operations in textile manufacturing and real estate development. Founded in 1940 and headquartered in Changzhou, China, the company specializes in producing denim fabric, yarn-dyed fabrics, khaki, corduroy, and other casual wear materials. As a subsidiary of Changzhou Hi-tech Group Co., Ltd., Black Peony maintains significant export operations, shipping textile products to the United States, Japan, Russia, Hong Kong, Australia, and other international markets. The company's diversified business model also includes import/export services for industrial products, household goods, and construction materials. Operating in the consumer cyclical sector, Black Peony leverages China's manufacturing infrastructure while navigating the competitive global textile industry. The company's dual focus on textiles and real estate provides some diversification benefits, though both sectors remain sensitive to economic cycles and consumer demand fluctuations in China and abroad.
Black Peony presents a mixed investment profile with both opportunities and significant challenges. The company's modest market capitalization of CNY 8.5 billion and low beta of 0.376 suggest relative stability compared to broader market movements. However, concerning financial metrics include high total debt of CNY 8.3 billion against cash reserves of CNY 3.4 billion, indicating substantial leverage. The company generated CNY 481 million in revenue with net income of CNY 121 million, resulting in a thin profit margin of approximately 2.5%. Positive operating cash flow of CNY 562 million provides some liquidity support, but the high debt load and capital-intensive nature of both textile manufacturing and real development create ongoing financial pressure. The modest dividend yield and diluted EPS of 0.12 CNY offer limited income appeal. Investors should carefully monitor the company's debt management and sector-specific headwinds in both textiles and Chinese real estate.
Black Peony operates in two highly competitive sectors: textile manufacturing and real estate development. In textiles, the company faces intense competition from both domestic Chinese manufacturers and international producers. Its competitive positioning is challenged by scale disadvantages compared to larger textile conglomerates and increasing cost pressures from labor, raw materials, and environmental compliance. The company's export focus to markets like the US, Japan, and Australia provides some diversification but exposes it to trade tensions and global demand fluctuations. In real estate, Black Peony competes in a saturated Chinese market experiencing regulatory pressures and slowing growth. The company's dual-business model offers some risk diversification but may also dilute management focus and capital allocation. Black Peony's subsidiary status under Changzhou Hi-tech Group provides potential access to resources but may also create strategic constraints. The company's historical roots dating to 1940 suggest established operations and relationships, but it must continuously adapt to technological changes in textile manufacturing and shifting real estate market dynamics. Competitive advantages appear limited primarily to regional market knowledge and established export channels rather than distinctive technological or brand advantages.