Lee & Man Chemical Co. Ltd. (0746) AI Stock Analysis

• Market Cap: HK$4.47B
• Dividend Yield: 6.7%
• Average Volume (3M): 224.82K
• Price to Earnings (P/E): 7.9
• Beta (1Y): 0.50
• Revenue Growth: -3.73%
• EPS Growth: 6.09%
• Country: HK
• Employees: 1,930
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 0.40
• Shares Outstanding: 825,000,000
• 10 Day Avg. Volume: 198,462
• 30 Day Avg. Volume: 224,820
• PEG Ratio: 0.35
• Price to Book (P/B): 0.52
• Price to Sales (P/S): 0.78
• P/FCF Ratio: 10.91
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: HK$6.00 ▲(14.72% Upside)

Lee & Man Chemical Co. Ltd. scores well due to its strong valuation metrics, including a low P/E ratio and high dividend yield, which suggest it is undervalued and offers attractive returns. The company's financial performance is solid, with strong operational efficiency and a robust balance sheet, though revenue inconsistencies need addressing. Technical indicators show a bullish trend, but overbought signals could lead to short-term volatility.

Positive Factors

Operational Efficiency

Strong gross profit margins suggest the company effectively manages production costs, enhancing its ability to maintain profitability despite revenue fluctuations.

Balance Sheet Strength

A robust balance sheet with low leverage risk provides financial stability, ensuring the company can weather economic downturns and invest in growth opportunities.

Cash Generation

Strong operating cash flow indicates the company's core operations are generating sufficient cash, supporting ongoing investments and financial flexibility.

Negative Factors

Revenue Decline

A declining revenue trend can hinder growth prospects and limit the company's ability to expand its market presence, necessitating strategic adjustments.

Free Cash Flow Variability

Variability in free cash flow may restrict the company's ability to consistently fund new projects or respond to market changes, affecting long-term growth.

Inconsistent Income Trends

Inconsistent income trends can create uncertainty in financial planning and investor confidence, potentially impacting the company's valuation and strategic initiatives.

Lee & Man Chemical Co. Ltd. Business Overview & Revenue Model

Company Description

Lee & Man Chemical Company Limited, an investment holding company, manufactures and sells chemical products in the People's Republic of China. It operates through two segments, Chemical and Property. The company offers caustic soda, chloromethane products, polymers, hydrogen peroxide, fluorochemical products, polytetrafluoroethylene, liquified chlorine, and other products, as well as provides styrene acrylic latex surface sizing agent and lithium-ion battery additives. In addition, it is involved in the development, sale, and rental of properties. The company was formerly known as Lee & Man Holding Limited and changed its name to Lee & Man Chemical Company Limited in June 2011. Lee & Man Chemical Company Limited was founded in 1976 and is headquartered in Kwun Tong, Hong Kong.

How the Company Makes Money

Lee & Man Chemical Co. Ltd. generates revenue through the production and sale of its chemical products, which are utilized in various industrial applications. The company's revenue model is primarily based on direct sales to clients in different sectors, including manufacturing and construction. Key revenue streams include the sale of industrial chemicals, adhesives, and specialized chemical formulations. Additionally, the company may engage in long-term contracts with major clients, ensuring consistent demand and stable revenue. Strategic partnerships with suppliers and distributors enhance their market reach, while investments in research and development enable Lee & Man to innovate and expand its product offerings, further contributing to its earnings.

Lee & Man Chemical Co. Ltd. Financial Statement Overview

Summary

Lee & Man Chemical Co. Ltd. demonstrates a balanced financial profile with robust operational efficiency and solid balance sheet strength. While income and revenue trends have been inconsistent, the company maintains strong profit margins and cash generation capabilities. Future growth may require addressing revenue challenges and optimizing free cash flow.

Income Statement

Lee & Man Chemical Co. Ltd. has shown a mixed performance in recent years. The gross profit margin has remained relatively strong, indicating effective cost management. However, there has been a decline in both revenue and net income in recent periods, with a notable revenue drop from 2022 to 2023. Despite this, the company maintains a healthy EBIT and EBITDA margin, suggesting operational efficiency.

Balance Sheet

The company's balance sheet reflects strong equity levels and a conservative debt-to-equity ratio, suggesting financial stability and lower leverage risk. The equity ratio is robust, indicating a solid capital structure with significant asset backing. Overall, Lee & Man Chemical Co. Ltd. appears financially sound in terms of its balance sheet metrics.

Cash Flow

The cash flow statement highlights a strong operating cash flow, which is a positive indicator of the company's ability to generate cash from its core operations. However, free cash flow has shown variability, which could impact investment flexibility. The operating cash flow to net income ratio is favorable, but attention to free cash flow growth is needed to sustain long-term financial health.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.93B	3.95B	4.05B	5.87B	5.19B	3.10B
Gross Profit	939.52M	1.16B	1.06B	2.12B	2.34B	1.13B
EBITDA	444.92M	693.50M	597.02M	1.51B	1.72B	743.82M
Net Income	405.51M	482.28M	400.67M	1.16B	1.29B	502.63M
Balance Sheet
Total Assets	7.32B	7.20B	7.03B	7.08B	7.62B	6.78B
Cash, Cash Equivalents and Short-Term Investments	282.75M	290.66M	263.67M	421.70M	324.88M	422.68M
Total Debt	487.74M	653.06M	678.91M	746.46M	1.04B	1.54B
Total Liabilities	1.08B	1.26B	1.23B	1.44B	2.04B	2.34B
Stockholders Equity	6.23B	5.94B	5.80B	5.63B	5.57B	4.44B
Cash Flow
Free Cash Flow	293.95M	282.02M	142.21M	955.86M	762.12M	348.55M
Operating Cash Flow	741.42M	1.06B	756.45M	1.57B	1.43B	827.06M
Investing Cash Flow	-760.78M	-826.47M	-613.69M	-610.62M	-636.18M	-476.20M
Financing Cash Flow	-242.78M	-265.43M	-298.37M	-840.28M	-919.87M	-253.94M

Lee & Man Chemical Co. Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.23
• 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:0746, the sentiment is Positive. The current price of 5.23 is below the 20-day moving average (MA) of 5.29, below the 50-day MA of 5.35, and above the 200-day MA of 4.47, indicating a bullish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 54.21 is Neutral, neither overbought nor oversold. The STOCH value of 87.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0746.

Lee & Man Chemical Co. Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0746	73 Outperform	HK$4.47B	7.86	9.36%	6.70%	-3.73%	6.09%
0189	62 Neutral	HK$18.81B	13.61	10.43%	0.98%	-1.43%	113.67%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
0609	61 Neutral	HK$1.30B	20.16	2.46%	3.52%	-5.29%	-32.47%
1702	59 Neutral	HK$1.18B	16.45	3.61%	2.20%	-8.51%	-68.34%
2198	56 Neutral	HK$4.20B	5.57	13.87%	―	9.20%	213.87%
1907	54 Neutral	HK$10.11B	-142.77	-0.52%	1.16%	-15.17%	-125.24%

Lee & Man Chemical Co. Ltd. Corporate Events

Lee & Man Chemical Secures Long-Term Vietnam Land Sublease in Discloseable Deal

Lee & Man Chemical’s subsidiary LMC Vietnam has entered into long-term sublease contracts for roughly 285,000 square metres of land and 21,635 square metres of adjacent water surface area in Ho Chi Minh City, Vietnam, running from 25 December 2025 to 21 December 2077. The deal, carrying an infrastructure fee of about VND1.54 trillion (approximately HK$455.7 million) paid in instalments, is classified under Hong Kong listing rules as a discloseable transaction, triggering reporting and announcement obligations but exempting the company from circular and shareholder approval requirements, signalling a sizable but not transformational capital commitment to its Vietnam footprint.

The most recent analyst rating on (HK:0746) stock is a Buy with a HK$6.00 price target. To see the full list of analyst forecasts on Lee & Man Chemical Co. Ltd. stock, see the HK:0746 Stock Forecast page.