| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 24.92 | 141 |
| Intrinsic value (DCF) | 41.30 | 299 |
| Graham-Dodd Method | 3.49 | -66 |
| Graham Formula | 11.66 | 13 |
Changzhou Tenglong AutoParts Co., Ltd. is a prominent Chinese automotive components manufacturer specializing in thermal management systems and precision auto parts. Founded in 1997 and headquartered in Changzhou, China, the company has established itself as a key supplier in the automotive supply chain with a comprehensive product portfolio including air-conditioning pipelines, heat exchange connecting tubes, auto sensors, EGR cooling parts, and precision aluminum tubes. Operating in the Consumer Cyclical sector's Auto-Parts industry, Tenglong serves both domestic Chinese automakers and international markets through exports to North America, South America, Europe, Japan, and South Asia. The company's vertically integrated manufacturing capabilities and R&D focus on thermal management solutions position it strategically within the evolving automotive landscape, particularly as vehicle electrification drives demand for sophisticated cooling and thermal control systems. With nearly three decades of industry experience, Tenglong leverages its technical expertise to maintain competitive positioning in the rapidly growing Asian automotive market while expanding its global footprint through quality-driven export relationships.
Changzhou Tenglong AutoParts presents a mixed investment profile with several positive indicators offset by notable concerns. The company demonstrates reasonable profitability with net income of CNY 249.8 million on revenue of CNY 3.81 billion, translating to a 6.5% net margin. The low beta of 0.368 suggests defensive characteristics relative to market volatility, potentially appealing to risk-averse investors. However, concerning aspects include weak cash flow generation with operating cash flow of CNY 224.2 million barely covering capital expenditures of CNY 214.3 million, indicating limited financial flexibility. The debt position of CNY 959.4 million against cash reserves of CNY 385.8 million raises liquidity concerns, while the modest dividend yield reflects conservative capital allocation. The company's exposure to the competitive Chinese auto parts market and dependence on automotive industry cycles present additional risk factors that require careful monitoring.
Changzhou Tenglong AutoParts operates in the highly competitive Chinese automotive components sector, where its competitive positioning is defined by specialized expertise in thermal management systems rather than broad-based auto parts manufacturing. The company's primary competitive advantage lies in its focused product portfolio centered on air-conditioning pipelines, heat exchange components, and precision tubes – areas requiring specialized manufacturing capabilities and technical knowledge. This specialization allows Tenglong to develop deep customer relationships with automakers seeking reliable thermal management solutions. However, the company faces significant scale disadvantages compared to larger Chinese auto parts conglomerates that benefit from economies of scale and broader product offerings. Tenglong's export business to international markets provides diversification benefits but exposes it to global competition and trade dynamics. The company's moderate market capitalization of CNY 5.43 billion positions it as a mid-tier player in the fragmented Chinese auto parts industry. Its competitive sustainability depends on maintaining technological relevance, particularly as vehicle electrification transforms thermal management requirements. While Tenglong's nearly 30-year industry presence provides established customer relationships and manufacturing experience, it must continuously innovate to compete against both domestic specialists and international component suppliers expanding in the Chinese market. The company's focus on quality and specialization represents its key differentiation strategy in a market dominated by both large diversified suppliers and smaller niche players.