| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 32.50 | -60 |
| Intrinsic value (DCF) | 13.08 | -84 |
| Graham-Dodd Method | 5.05 | -94 |
| Graham Formula | 11.38 | -86 |
Jiangsu Changling Hydraulic Co., Ltd is a specialized Chinese manufacturer of hydraulic components serving the construction machinery sector. Founded in 2006 and headquartered in Jiangyin, Jiangsu province, the company has established itself as a key domestic supplier in China's industrial hydraulic market. Changling Hydraulic's product portfolio includes essential components such as hydraulic turning joints, adjuster cylinders, springs, valves, pin bushing products, and application-specific field products. These components are critical for the operation of various construction equipment including excavators, loaders, and cranes. Operating within the industrials sector, the company plays a vital role in China's infrastructure development ecosystem, supplying components that enable the mechanical functionality of heavy machinery. With China's ongoing urbanization and infrastructure investments driving demand for construction equipment, Changling Hydraulic occupies a strategic position in the manufacturing supply chain. The company's focus on hydraulic specialization and domestic market penetration makes it an important player in China's industrial tools and accessories manufacturing landscape.
Jiangsu Changling Hydraulic presents a mixed investment profile with several notable characteristics. The company demonstrates financial stability with a conservative beta of 0.44, suggesting lower volatility compared to the broader market. Financially, it maintains a strong liquidity position with cash and equivalents of CNY 355 million against minimal total debt of CNY 15.3 million, indicating a robust balance sheet. The company generated CNY 883 million in revenue with net income of CNY 94.7 million, translating to a net margin of approximately 10.7%. However, the dividend payout of CNY 0.72 per share exceeds the diluted EPS of CNY 0.66, raising sustainability concerns. Operating cash flow of CNY 77.5 million supports operations, though capital expenditures of CNY 37.8 million indicate ongoing investment needs. The primary investment appeal lies in exposure to China's construction machinery sector, while risks include dividend sustainability and dependence on domestic market cyclicality.
Jiangsu Changling Hydraulic operates in a highly competitive hydraulic components market where it faces competition from both domestic Chinese manufacturers and international hydraulic specialists. The company's competitive positioning is primarily as a domestic specialist focused on specific hydraulic components for construction machinery. Its competitive advantages include deep understanding of local market requirements, cost competitiveness typical of Chinese manufacturers, and established relationships within China's construction equipment supply chain. The company's product specialization in turning joints, cylinders, and valves provides technical expertise in specific component categories. However, Changling faces significant competitive challenges from larger, more diversified hydraulic manufacturers with broader product portfolios and greater R&D capabilities. International competitors typically offer more technologically advanced solutions and global service networks, while domestic competitors may compete aggressively on price. The company's moderate scale (CNY 883 million revenue) limits its ability to compete with industry giants on research investment or global distribution. Its competitive strategy appears focused on serving specific niches within the Chinese construction machinery market rather than competing across the full hydraulic component spectrum. The company's beta of 0.44 suggests the market perceives it as less volatile than broader industrials, possibly reflecting its specialized niche and domestic focus. Success will depend on maintaining cost advantages while potentially moving up the value chain through technical improvements.