| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 21.09 | 557 |
| Intrinsic value (DCF) | 1.22 | -62 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 3.15 | -2 |
Yangmei Chemical Co., Ltd. is a prominent Chinese chemical manufacturer headquartered in Taiyuan, specializing in the research, development, production, and sale of diverse chemical products. Operating within China's massive basic materials sector, the company produces essential industrial chemicals including urea for fertilizers, propylene and polyvinyl chloride for plastics manufacturing, caustic soda for various industrial processes, methanol for fuel and chemical feedstocks, hydrogen peroxide for bleaching and disinfection, and phosphorus trichloride for chemical synthesis. Beyond traditional chemicals, Yangmei has expanded into the emerging hydrogen energy industry and maintains chemical machinery manufacturing capabilities. Founded in 1982 and formerly known as Dongxin Electrical Carbon Co Ltd, the company rebranded in 2013 to reflect its chemical focus. As a key player in China's industrial chemical landscape, Yangmei serves critical sectors including agriculture, manufacturing, energy, and materials production, positioning itself at the intersection of traditional chemical manufacturing and emerging clean energy technologies.
Yangmei Chemical presents a high-risk investment profile characterized by significant financial challenges. The company reported a substantial net loss of -681 million CNY for the period, negative operating cash flow of -111 million CNY, and a diluted EPS of -0.29, indicating serious operational difficulties. While the company maintains a substantial cash position of 5.4 billion CNY, this is overshadowed by high total debt of 9.2 billion CNY, creating concerning leverage ratios. The absence of dividend payments further reduces income appeal for investors. The beta of 0.805 suggests moderate volatility relative to the market, but the combination of negative profitability metrics, cash flow challenges, and high debt levels creates a concerning financial picture. Investment attractiveness would depend heavily on a credible turnaround strategy, potential restructuring, or sector recovery in China's chemical industry.
Yangmei Chemical operates in China's highly competitive chemical industry, which is characterized by scale-driven economics, regulatory complexity, and cyclical demand patterns. The company's competitive positioning appears challenged, as evidenced by its negative financial performance during the reporting period. While Yangmei maintains a diversified product portfolio spanning fertilizers, basic chemicals, and emerging energy applications, this breadth may be diluting operational focus and efficiency. The company's entry into hydrogen energy represents a strategic pivot toward growth sectors but requires significant capital investment amid current financial constraints. Yangmei's scale, with approximately 10.9 billion CNY in revenue, positions it as a mid-tier player in China's fragmented chemical market, lacking the economies of scale enjoyed by industry giants. The negative operating cash flow suggests potential operational inefficiencies or pricing pressures in its core chemical businesses. The company's high debt burden relative to its market capitalization of 7.4 billion CNY further constrains its competitive flexibility, limiting its ability to invest in modernization, expansion, or technological advancement compared to better-capitalized competitors. Geographic concentration in China provides domestic market knowledge but also exposes the company to regional economic cycles and regulatory changes.