| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 24.85 | -8 |
| Intrinsic value (DCF) | 11.81 | -56 |
| Graham-Dodd Method | 15.04 | -44 |
| Graham Formula | 9.95 | -63 |
Yuanli Chemical Group Co., Ltd. is a prominent Chinese fine chemicals manufacturer specializing in the research, development, production, and sale of high-value chemical products. Founded in 2003 and headquartered in Weifang, China, the company has established itself as a key player in the basic materials sector, focusing on green solvents, dibasic alcohol products, special plasticizers, and coalescing agents. Yuanli Chemical serves a diverse global clientele across 50 countries, catering to critical industries including coatings, polymers, plastic additives, pigments, pharmaceuticals, and specialty chemicals. The company's strategic positioning in China's chemical manufacturing hub provides significant advantages in supply chain efficiency and production scalability. With its rebranding from Shandong Yuanli Science and Technology Co., Ltd., the company has strengthened its market presence and technological capabilities. Yuanli Chemical's commitment to green chemistry and sustainable solutions positions it well in the evolving global chemicals landscape, where environmental regulations and demand for eco-friendly products are driving market transformation. The company's extensive product portfolio and international reach make it an important contributor to China's chemical export economy and a significant player in the global fine chemicals market.
Yuanli Chemical presents a mixed investment profile with several notable strengths and concerns. The company demonstrates solid profitability with net income of CNY 207 million on revenue of CNY 2.22 billion, translating to a healthy net margin of approximately 9.3%. The diluted EPS of CNY 1.01 and dividend per share of CNY 0.35 indicate shareholder-friendly capital allocation. Financially, the company maintains a strong liquidity position with CNY 1.84 billion in cash against CNY 610 million in total debt, providing financial flexibility. However, concerning signals include weak operating cash flow of only CNY 46.8 million relative to net income, suggesting potential working capital challenges or aggressive revenue recognition. The negative capital expenditures of CNY -98.2 million may indicate underinvestment in growth capacity. The low beta of 0.281 suggests defensive characteristics but limited growth correlation. Investors should weigh the company's solid profitability and clean balance sheet against potential operational efficiency issues and constrained growth investment.
Yuanli Chemical operates in the highly competitive fine chemicals sector, where its competitive positioning is defined by several key factors. The company's primary advantage lies in its specialized product portfolio focused on green solvents and specialty chemicals, which differentiates it from commodity chemical producers. Its location in Weifang, within China's major chemical manufacturing region, provides significant cost advantages through proximity to raw materials and established supply chains. The global reach spanning 50 countries demonstrates Yuanli's ability to compete internationally, though it faces intense competition from both domestic Chinese producers and multinational chemical giants. The company's scale, with approximately CNY 2.2 billion in revenue, positions it as a mid-sized player capable of serving diverse industrial customers while maintaining flexibility. However, Yuanli faces challenges in competing with larger competitors who benefit from greater R&D budgets and broader product portfolios. The company's focus on green chemistry aligns with global sustainability trends, potentially providing a competitive edge in environmentally conscious markets. Its financial strength with minimal debt relative to cash reserves offers stability but may also indicate conservative growth strategies compared to more aggressive competitors. The competitive landscape requires continuous innovation and cost management to maintain market position against both low-cost producers and technology-driven multinationals.