| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 12.95 | 53 |
| Intrinsic value (DCF) | 3.43 | -59 |
| Graham-Dodd Method | n/a | |
| Graham Formula | n/a |
Nanjing Chervon Auto Precision Technology Co., Ltd. is a specialized automotive components manufacturer headquartered in Nanjing, China, serving the global automotive industry with precision-engineered products for middle and high-end vehicles. Founded in 2012, Chervon has established itself as a key supplier across multiple automotive systems, including engine components (sprockets, throttle bodies, turbo housings), transmission products (transfer case housings, ring gears, valve bodies), and emerging e-mobility solutions (motor shafts, inverter housings, gear box assemblies). The company also produces steering and brake components, heat exchange products, and even diversifies into washing machine parts. Operating in the Consumer Cyclical sector's Auto Parts industry, Chervon leverages China's manufacturing expertise while competing internationally, positioning itself at the intersection of traditional internal combustion engine technology and the accelerating transition to electric vehicles. With comprehensive R&D capabilities and production expertise, the company addresses the evolving needs of automotive OEMs seeking reliable, precision components for both conventional and electric powertrains.
Nanjing Chervon presents a high-risk investment proposition characterized by significant financial challenges amid strategic positioning in automotive technology transitions. The company reported a substantial net loss of -517 million CNY for FY2024, with negative EPS of -1.97 CNY, indicating serious operational or market headwinds. While maintaining positive operating cash flow of 138 million CNY, Chervon faces a heavy debt burden of 2.59 billion CNY against cash reserves of 548 million CNY, creating liquidity concerns. The zero dividend policy reflects capital preservation priorities. However, the company's diverse product portfolio spanning traditional ICE components and e-mobility solutions provides exposure to automotive industry evolution. The below-market beta of 0.659 suggests lower volatility than the broader market, but investors must weigh the company's technological capabilities against its financial distress and intense competitive pressures in the Chinese auto parts sector.
Nanjing Chervon operates in the highly competitive Chinese automotive components sector, where it faces pressure from both domestic specialists and international giants. The company's competitive positioning is defined by its dual focus on traditional internal combustion engine components and emerging e-mobility products, attempting to bridge the technology transition. Chervon's strengths include its comprehensive product range across engine, transmission, steering, and EV systems, providing one-stop-shop potential for automotive OEMs. The company's precision manufacturing capabilities for middle and high-end vehicles differentiate it from lower-tier Chinese suppliers. However, Chervon faces significant competitive disadvantages compared to larger peers. Its scale is modest relative to industry leaders, limiting R&D investment capacity and pricing power. The company's financial distress, evidenced by substantial losses and high debt, impairs its ability to invest in next-generation technologies or compete on cost. International competitors bring superior technology and global OEM relationships, while larger domestic players benefit from economies of scale. Chervon's niche appears to be as a specialized supplier for specific precision components, but it lacks the vertical integration or technological dominance of market leaders. The company's diversification into non-automotive products like washing machine parts suggests efforts to mitigate automotive cyclicality, but this may dilute strategic focus. Success likely depends on securing anchor positions in Chinese EV supply chains while managing financial restructuring.