| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 26.79 | 49 |
| Intrinsic value (DCF) | 4.05 | -77 |
| Graham-Dodd Method | 5.37 | -70 |
| Graham Formula | 5.64 | -69 |
Lily Group Co., Ltd. is a prominent Chinese specialty chemicals manufacturer specializing in organic pigments, with a strong market position in the People's Republic of China. Founded in 1989 and headquartered in Hangzhou, the company operates as a subsidiary of Lily Holding Co., Ltd., focusing on the production and distribution of high-quality pigments for diverse industrial applications. Lily Group's product portfolio serves critical sectors including inks, coatings, pearlescent materials, and plastics, providing essential coloring solutions that enhance product aesthetics and functionality across multiple industries. The company's comprehensive offering includes specialized pigment color cards for coatings and plastics, enabling precise color matching and customization for clients. Operating within the Basic Materials sector and Specialty Chemicals industry, Lily Group leverages China's robust manufacturing ecosystem to deliver consistent quality while maintaining competitive production costs. With nearly three decades of industry experience, the company has established reliable supply chains and technical expertise that position it as a trusted partner for domestic and international customers seeking innovative pigment solutions. Lily Group's strategic location in Hangzhou, a major industrial hub, provides logistical advantages for serving both domestic markets and export opportunities in the global specialty chemicals landscape.
Lily Group presents a mixed investment profile with several notable strengths and challenges. The company demonstrates solid financial stability with a market capitalization of approximately CN¥5.71 billion and maintains a conservative capital structure, evidenced by manageable total debt of CN¥86.4 million against cash reserves of CN¥651.8 million. The low beta of 0.591 suggests relative stability compared to broader market volatility, potentially appealing to risk-averse investors. However, profitability metrics raise concerns, with net income of CN¥176.1 million representing a modest 7.3% net margin on revenues of CN¥2.4 billion, indicating potential efficiency challenges or competitive pricing pressures. The diluted EPS of CN¥0.43 and dividend per share of CN¥0.15 provide income generation, but the company's operating cash flow of CN¥328.9 million, while positive, warrants monitoring given the capital-intensive nature of chemical manufacturing. Investors should consider Lily Group's established market position against the cyclical nature of the specialty chemicals industry and potential exposure to environmental regulations affecting pigment manufacturing in China.
Lily Group competes in the highly fragmented organic pigments market, where competitive advantage is derived from technical expertise, production scale, and customer relationships. The company's primary competitive positioning rests on its deep-rooted presence in China's manufacturing ecosystem, providing cost advantages and supply chain integration that international competitors may struggle to match. As a subsidiary of Lily Holding Co., Ltd., the company benefits from organizational stability and potential access to group resources for research and development initiatives. However, Lily Group faces intense competition from both domestic Chinese producers and multinational chemical giants operating in the region. The company's focus on organic pigments for specific applications (inks, coatings, plastics) represents a targeted market approach, but this specialization also limits diversification compared to broader chemical companies. Lily Group's competitive challenges include maintaining technological parity with global leaders who invest heavily in R&D for environmentally friendly and high-performance pigments. The company's moderate scale (CN¥2.4 billion revenue) positions it as a mid-tier player rather than a market leader, potentially limiting bargaining power with suppliers and customers. Competitive advantages appear to be regional rather than technological, with the company leveraging China's manufacturing infrastructure and proximity to growing Asian markets. The evolving regulatory environment for chemical production in China represents both a risk and potential advantage, as stricter regulations could disadvantage smaller competitors while potentially creating barriers to entry that protect established players like Lily Group. The company's ability to navigate environmental compliance while maintaining cost competitiveness will be crucial for its long-term positioning against both domestic rivals and international competitors with advanced environmental technologies.