Zhejiang Changan Renheng Technology Co., Ltd. Class H (8139) AI Stock Analysis

• Market Cap: HK$99.84M
• Dividend Yield: N/A
• Average Volume (3M): 6.15K
• Price to Earnings (P/E): 41.9
• Beta (1Y): 0.21
• Revenue Growth: 13.37%
• EPS Growth: -516.34%
• Country: HK
• Employees: 229
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): -0.08
• Shares Outstanding: 38,400,000
• 10 Day Avg. Volume: 8,150
• 30 Day Avg. Volume: 6,150
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$1.50
• Price Target Upside: -6.25% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 56 Neutral
• Price Target: HK$1.50 ▼(-6.25% Downside)

The overall stock score is primarily influenced by the company's solid revenue growth and strong gross profit margin. However, weak net profitability and significant cash flow challenges weigh heavily on the score. Technical indicators suggest a lack of strong momentum, and the negative P/E ratio highlights valuation concerns.

Zhejiang Changan Renheng Technology Co., Ltd. Class H Business Overview & Revenue Model

Company Description

Zhejiang Chang'an Renheng Technology Co., Ltd., together with its subsidiaries, develops, manufactures, and sells bentonite fine chemicals in the People's Republic of China. It offers papermaking chemicals; inorganic gels; bentonite products for metallurgy pellets; quality calcium-bentonite products; organic bentonite products; and other chemicals, such as flocculating agents that are primarily used in the coating preparation industry. The company is also involved in the mining and processing of clay; and wholesale and retail of chemicals and equipment. The company was formerly known as Changxing Renheng Fine Bentonite Co., Ltd. and changed its name to Zhejiang Chang'an Renheng Technology Co., Ltd. in December 2008. Zhejiang Chang'an Renheng Technology Co., Ltd. was founded in 2000 and is headquartered in Changxing, the People's Republic of China.

How the Company Makes Money

Zhejiang Changan Renheng Technology Co., Ltd. generates revenue primarily through the sale of its bentonite products. The company supplies these products to various industries, including papermaking, metallurgy, and chemicals, where bentonite is used for its absorbent and binding properties. Revenue streams are mainly derived from long-term contracts and direct sales to industrial clients. The company may also engage in strategic partnerships and collaborations to enhance its product offerings and expand its market reach, although specific partnerships are not listed. The demand for bentonite in industrial applications contributes significantly to the company's earnings.

Zhejiang Changan Renheng Technology Co., Ltd. Class H Financial Statement Overview

Summary

The company has demonstrated solid revenue growth and maintains a strong gross profit margin. However, profitability at the net income level is weak, and cash flow issues are apparent with negative free cash flow in 2024. The balance sheet shows moderate leverage, indicating some financial stability but also potential risks if debt levels increase.

Income Statement

The company has shown consistent revenue growth over the past few years, with a revenue increase of approximately 20.1% from 2023 to 2024. Gross profit margin is strong at around 41% for 2024, indicating effective cost management. However, net profit margin is low at approximately 0.65%, suggesting challenges in controlling expenses beyond costs of goods sold. EBIT and EBITDA margins are moderate, which reflects some operational efficiency but leaves room for profit improvement.

Balance Sheet

The company's debt-to-equity ratio is approximately 1.47 in 2024, indicating a reliance on debt but within a manageable range. The equity ratio is around 35%, suggesting moderate financial stability. Return on Equity (ROE) is low at approximately 1.07%, reflecting limited shareholder returns and potential inefficiencies in using equity to generate income.

Cash Flow

Operating cash flow has declined significantly, and free cash flow turned negative in 2024, indicating potential liquidity issues. The free cash flow to net income ratio is negative, further highlighting cash flow challenges. However, the operating cash flow to net income ratio is strong at approximately 6.18, indicating effective cash operations despite low profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	177.57M	194.86M	162.28M	150.82M	144.40M	112.72M
Gross Profit	72.37M	80.10M	65.36M	55.29M	60.04M	46.84M
EBITDA	14.38M	24.86M	24.02M	17.72M	25.88M	16.35M
Net Income	1.08M	1.27M	2.30M	1.42M	7.43M	1.18M
Balance Sheet
Total Assets	308.90M	337.98M	292.85M	278.15M	248.60M	230.28M
Cash, Cash Equivalents and Short-Term Investments	27.32M	32.09M	15.36M	23.27M	21.63M	22.75M
Total Debt	140.36M	174.73M	111.50M	120.38M	93.56M	87.70M
Total Liabilities	188.67M	219.29M	175.42M	163.03M	134.89M	124.01M
Stockholders Equity	120.23M	118.69M	117.43M	115.13M	113.71M	106.27M
Cash Flow
Free Cash Flow	-2.61M	-25.81M	7.54M	-8.83M	-1.56M	162.08K
Operating Cash Flow	11.43M	7.85M	35.08M	14.81M	12.83M	11.01M
Investing Cash Flow	-4.00M	-41.18M	-23.90M	-23.52M	-14.25M	-10.71M
Financing Cash Flow	5.10M	34.68M	-15.71M	19.82M	-115.04K	-2.31M

Zhejiang Changan Renheng Technology Co., Ltd. Class H Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:8139, the sentiment is Positive. The current price of 1.6 is above the 20-day moving average (MA) of 1.54, above the 50-day MA of 1.50, and above the 200-day MA of 1.40, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 55.90 is Neutral, neither overbought nor oversold. The STOCH value of 84.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:8139.

Zhejiang Changan Renheng Technology Co., Ltd. Class H Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1702	57 Neutral	763.76M	10.65	4.69%	2.93%	-8.51%	-68.34%
8139	56 Neutral	HK$99.84M	41.90	-3.82%	―	13.37%	-516.34%
0609	54 Neutral	1.25B	19.35	0.00%	3.52%	-5.29%	-32.47%
0954	46 Neutral	174.80M	-2.15	-11.70%	―	-17.15%	30.94%
0827	45 Neutral	180.84M	-0.30	-125.34%	―	-22.72%	-212.73%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%