| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 8.51 | -65 |
| Graham Formula | 1.91 | -92 |
Zhejiang Dragon Technology Co., Ltd. is a specialized fine chemical manufacturer established in 1989 and headquartered in Hangzhou, China. Operating as a subsidiary of Zhejiang Dinglong New Materials Co., Ltd, the company focuses on the research, development, production, and sale of high-value chemical products serving multiple industrial sectors. Dragon Technology's core business segments include cosmetics raw materials, special engineering materials, and various functional chemicals that cater to the growing demand for specialized chemical solutions in China's industrial landscape. As part of the Basic Materials sector, the company plays a crucial role in China's chemical industry supply chain, providing essential inputs for cosmetics manufacturing and industrial applications. With over three decades of industry experience, Zhejiang Dragon Technology has established itself as a reliable supplier in the competitive Chinese chemical market, leveraging its technical expertise and production capabilities to serve domestic industrial needs. The company's strategic positioning in Hangzhou, a major economic hub, provides access to key manufacturing clusters and transportation networks, supporting its market presence across China's rapidly evolving chemical sector.
Zhejiang Dragon Technology presents a mixed investment profile with several notable strengths and risks. The company demonstrates solid profitability with net income of CNY 163.4 million on revenue of CNY 700.2 million, translating to a healthy net margin of approximately 23.3%. The company maintains a strong balance sheet with substantial cash reserves of CNY 645 million against minimal total debt of CNY 18.4 million, providing financial flexibility and stability. However, the high beta of 1.60 indicates significant volatility relative to the market, suggesting higher risk exposure. The dividend yield appears reasonable with a payout of CNY 0.21 per share, though the diluted EPS of CNY 0.69 suggests room for improved shareholder returns. Operating cash flow of CNY 201.8 million comfortably covers capital expenditures, indicating sustainable operations. Investors should weigh the company's strong financial position against its exposure to China's cyclical chemical industry and regulatory environment.
Zhejiang Dragon Technology operates in China's highly competitive fine chemicals market, where it faces competition from both domestic specialists and larger diversified chemical companies. The company's competitive positioning is defined by its niche focus on cosmetics raw materials and special engineering materials, which allows for specialized expertise but also limits scale compared to broader chemical producers. Dragon Technology's competitive advantages include its long-standing industry presence since 1989, technical expertise in specific chemical formulations, and strong financial position with minimal debt. However, the company faces significant challenges from larger competitors with greater R&D budgets, broader product portfolios, and stronger distribution networks. The Chinese chemical industry is characterized by intense price competition, regulatory pressures, and evolving environmental standards, which may disadvantage smaller players like Dragon Technology. The company's subsidiary relationship with Zhejiang Dinglong New Materials provides potential synergies but also creates dependency risks. Market positioning is further complicated by the need to compete with international chemical companies that offer advanced technologies and global quality standards. Dragon Technology's regional focus in China provides deep local market knowledge but limits geographic diversification, making it vulnerable to domestic economic cycles and policy changes affecting the chemical sector.