| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 26.99 | -39 |
| Intrinsic value (DCF) | 10.31 | -77 |
| Graham-Dodd Method | 5.29 | -88 |
| Graham Formula | 7.53 | -83 |
Wolong Electric Group Co., Ltd. is a leading Chinese industrial motor and electrical equipment manufacturer founded in 1984 and headquartered in Shaoxing, China. The company specializes in designing, manufacturing, and distributing a comprehensive portfolio of motors, control devices, power transmission equipment, and power batteries for global industrial markets. Wolong's diverse product range includes low voltage IEC/NEMA motors, medium/high voltage motors, home appliance motors, variable speed drives, generators, and industrial automation products including servo motors and robotics. The company serves critical infrastructure sectors including automotive, chemical processing, HVAC, power generation, marine, mining, oil and gas, and water treatment industries. As a key player in China's industrial electrification and automation ecosystem, Wolong leverages its extensive manufacturing capabilities and technical expertise to support the country's industrial modernization and global export initiatives in the electrical equipment sector.
Wolong Electric presents a mixed investment profile with moderate growth potential tempered by margin pressures. The company's 2024 financials show revenue of CNY 16.25 billion with net income of CNY 793 million, representing a net margin of approximately 4.9%, indicating competitive pressures in the industrial motor space. With a market capitalization of CNY 71.9 billion and a beta of 0.75, the stock demonstrates lower volatility than the broader market but faces headwinds from intense competition in the Chinese industrial equipment sector. Positive operating cash flow of CNY 1.54 billion supports ongoing operations, though substantial capital expenditures of CNY 1.2 billion suggest significant ongoing investment requirements. The company maintains a reasonable debt level with total debt of CNY 4.72 billion against cash reserves of CNY 3.19 billion, while the dividend yield appears modest at CNY 0.15 per share. Investors should monitor the company's ability to maintain market share against both domestic and international competitors while improving operational efficiency.
Wolong Electric operates in the highly competitive global industrial motors and electrical equipment market, where it maintains a solid position as a mid-tier Chinese manufacturer with extensive domestic market penetration. The company's competitive advantage stems from its comprehensive product portfolio covering both low and high voltage applications, strong relationships with Chinese industrial customers, and cost-effective manufacturing capabilities. However, Wolong faces intense competition from both larger international conglomerates and numerous smaller domestic manufacturers. The company's technology positioning appears intermediate—more advanced than basic domestic producers but trailing leading international competitors in high-efficiency and premium automation segments. Wolong's diverse end-market exposure across automotive, HVAC, industrial automation, and infrastructure provides some diversification benefits but also exposes it to cyclical demand patterns across multiple industrial sectors. The company's expansion into electric vehicle motors and industrial automation represents strategic moves to capture higher-growth segments, though these areas are particularly competitive. Wolong's scale provides purchasing and manufacturing advantages, but margin pressures suggest limited pricing power in standardized product categories. The company's future competitiveness will depend on its ability to advance technological capabilities, improve operational efficiency, and potentially consolidate smaller players in the fragmented Chinese market.