| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 26.73 | 238 |
| Intrinsic value (DCF) | 3.64 | -54 |
| Graham-Dodd Method | 5.46 | -31 |
| Graham Formula | 4.74 | -40 |
Jiangsu SOPO Chemical Co. Ltd. is a prominent Chinese chemical manufacturer specializing in acetic acid derivatives and organic chemical raw materials. Founded in 1996 and headquartered in Zhenjiang, the company produces a diverse portfolio including acetic acid, ethyl acetate, methyl alcohol, ADC foaming agents, sulfuric acid products, chlorinated benzene, fatty alcohol, and chloroacetic acid. These products serve critical applications across dyes, printing, pharmaceuticals, pesticides, paints, adhesives, plastics, and synthetic fibers. Operating in China's massive chemical sector, SOPO Chemical leverages its integrated production capabilities to serve both domestic and international markets. As a key player in China's basic materials industry, the company benefits from the country's manufacturing ecosystem while facing evolving environmental regulations and global competition. Its strategic positioning in specialty chemicals provides resilience against commodity price fluctuations while serving essential industrial supply chains.
Jiangsu SOPO Chemical presents a mixed investment profile with moderate appeal. The company demonstrates reasonable financial stability with CNY 856.8 million market capitalization, positive net income of CNY 212.7 million, and strong operating cash flow of CNY 979 million. The low beta of 0.874 suggests defensive characteristics relative to the broader market. However, thin profit margins (3.3% net margin) and modest EPS of CNY 0.18 indicate operational efficiency challenges in a competitive chemical market. The company maintains a conservative capital structure with low debt (CNY 249 million) relative to cash reserves (CNY 1.1 billion), providing financial flexibility. The CNY 0.05 dividend offers a modest yield. Key risks include exposure to chemical commodity cycles, environmental regulatory pressures in China, and intense domestic competition. The investment case hinges on operational improvements and potential market share gains in specialty chemical segments.
Jiangsu SOPO Chemical operates in China's highly fragmented and competitive chemical industry, where scale, technological capability, and cost efficiency determine market positioning. The company's competitive advantage lies in its diversified product portfolio spanning acetic acid derivatives, solvents, and specialty chemicals, which provides some insulation from price volatility in any single product category. Its integrated production capabilities for multiple chemical intermediates offer cost synergies and supply chain stability. However, SOPO faces intense competition from both state-owned chemical giants and numerous smaller private manufacturers. The company's moderate scale (CNY 6.4 billion revenue) positions it as a mid-tier player without the economies of scale enjoyed by industry leaders. Its technological capabilities in specialty chemicals like ADC foaming agents and chlorinated benzene provide some differentiation, but these segments also face innovation pressure from more R&D-intensive competitors. Geographic concentration in China exposes the company to domestic economic cycles and environmental regulations, though international operations provide some diversification. The competitive landscape requires continuous operational efficiency improvements and potential consolidation to maintain relevance against larger, more integrated chemical conglomerates.