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Zhejiang Shibao Co. Ltd. Class H (HK:1057)
:1057

Zhejiang Shibao Co. Ltd. Class H (1057) AI Stock Analysis

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HK:1057

Zhejiang Shibao Co. Ltd. Class H

(1057)

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Neutral 65 (OpenAI - 5.2)
Rating:65Neutral
Price Target:
HK$6.00
â–²(22.95% Upside)
Action:ReiteratedDate:01/24/26
The score is primarily tempered by weak and negative TTM free cash flow despite improved profitability, while strong technical uptrend and positive momentum support the rating; valuation is neutral-to-slightly expensive with a modest dividend yield.
Positive Factors
Revenue growth and improving net margin
Sustained TTM revenue growth and a recovering net margin indicate the company is expanding sales while improving profitability. This strengthens the recurring earnings base from OEM and aftermarket channels, supporting longer-term reinvestment and stable operating performance.
Manageable leverage and improving ROE
A low debt-to-equity position and improving ROE provide balance-sheet resilience and financial flexibility. With limited leverage the company can better absorb automotive cyclicality, fund targeted R&D or capex for steering systems, and avoid heavy interest burdens during downturns.
Focused OEM and aftermarket product franchise
A concentrated product focus on steering systems builds technical know-how and certification barriers to entry, strengthening OEM relationships. Combined OEM volume plus aftermarket replacement demand yields recurring revenue streams and durable customer ties over vehicle model cycles.
Negative Factors
Weak cash conversion and negative free cash flow
Persistent negative free cash flow despite reported profitability suggests earnings are not converting to cash, likely from working-capital swings or elevated capex. Over months this limits internal funding for growth, increases reliance on external financing, and raises liquidity risk.
Gross margin compression
Material gross-margin decline points to sustained input-cost pressure or diminished pricing power. If margins remain depressed, it can erode operating leverage and require either higher pricing, cost restructuring, or product mix shifts to restore historical profitability levels over the next several quarters.
Recent step-up in debt reduces flexibility
An increase in debt amid volatile cash generation weakens the company’s buffer for cyclical downturns. Higher leverage raises interest and refinancing risk, constrains strategic investments, and can force tighter working-capital management if negative FCF persists over coming quarters.

Zhejiang Shibao Co. Ltd. Class H (1057) vs. iShares MSCI Hong Kong ETF (EWH)

Zhejiang Shibao Co. Ltd. Class H Business Overview & Revenue Model

Company DescriptionZhejiang Shibao Company Limited, together with its subsidiaries, researches, designs, develops, produces, and sells automotive steering systems and components in the People's Republic of China. The company offers automotive steering gears, and other components and parts of steering system. It also provides hydraulic power recirculating ball steering gears for use in commercial vehicles; and electric power steering, and intelligent steering systems for use in passenger cars and commercial vehicles. Zhejiang Shibao Company Limited supplies steering products to automakers. The company was founded in 1984 and is headquartered in Hangzhou, the People's Republic of China. Zhejiang Shibao Company Limited is a subsidiary of Zhejiang Shibao Holding Group Co., Ltd.
How the Company Makes MoneyZhejiang Shibao Co. Ltd. makes money through the manufacturing and sale of automotive steering systems and components, which are supplied to major automotive manufacturers and aftermarket suppliers. The company's revenue model is based on both direct sales to original equipment manufacturers (OEMs) and sales through distribution networks that cater to the automotive aftermarket. Key revenue streams include the sale of steering gears, power steering pumps, and other related components. The company also benefits from strategic partnerships and long-term contracts with major automotive brands, ensuring a steady demand for its products. Furthermore, Zhejiang Shibao Co. Ltd. invests in research and development to continuously improve its product offerings and maintain competitive advantages in the market.

Zhejiang Shibao Co. Ltd. Class H Financial Statement Overview

Summary
Income statement and balance sheet are supportive (solid TTM revenue growth, improved net margin, manageable leverage and improving ROE), but cash-flow quality is a major drag with volatile operating cash flow and slightly negative TTM free cash flow, indicating profits are not consistently converting to cash.
Income Statement
72
Positive
TTM (Trailing-Twelve-Months) revenue growth is solid (~8%) and profitability has improved versus prior years, with net margin around ~5.6% (up materially from 2022–2023 levels). However, gross margin has compressed versus 2023–2024 (TTM ~17% vs ~20%+ previously), suggesting higher input costs or pricing pressure. Overall: good earnings momentum, but margin durability is a key watch item.
Balance Sheet
78
Positive
Leverage looks manageable with low debt relative to equity in TTM (~0.19), and equity has grown versus earlier years, supporting balance-sheet resilience. Returns on equity have also improved (TTM ~9%), indicating better capital productivity. The main concern is a noticeable step-up in debt versus 2024, which reduces flexibility if cash generation remains uneven.
Cash Flow
38
Negative
Cash conversion is the weak point. While operating cash flow improved in TTM, free cash flow remains slightly negative, and recent periods show volatile and often weak cash generation (including very low operating cash flow in 2023–2024 and consistently negative free cash flow). With TTM free cash flow negative relative to net income, profitability is not consistently translating into cash, likely reflecting working-capital swings and/or elevated investment needs.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.34B2.69B1.82B1.39B1.18B1.10B
Gross Profit643.60M563.98M375.18M269.00M253.37M259.94M
EBITDA194.45M249.34M182.47M106.85M115.10M128.54M
Net Income186.80M149.12M77.20M15.82M25.59M40.85M
Balance Sheet
Total Assets3.67B3.26B2.65B2.39B2.08B1.98B
Cash, Cash Equivalents and Short-Term Investments544.70M488.87M268.73M352.62M266.24M167.29M
Total Debt388.53M81.11M182.66M196.98M171.92M106.92M
Total Liabilities1.60B1.31B1.19B1.02B720.62M647.01M
Stockholders Equity2.04B1.94B1.47B1.39B1.38B1.34B
Cash Flow
Free Cash Flow-14.75M-100.12M-60.37M33.54M-38.43M1.94M
Operating Cash Flow194.46M1.17M3.20M110.87M39.63M95.70M
Investing Cash Flow-156.96M-102.79M-50.42M-117.14M-101.55M-18.16M
Financing Cash Flow9.82M194.77M11.16M19.49M60.50M-49.25M

Zhejiang Shibao Co. Ltd. Class H Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price4.88
Price Trends
50DMA
5.91
Positive
100DMA
5.18
Positive
200DMA
5.19
Positive
Market Momentum
MACD
0.09
Positive
RSI
51.20
Neutral
STOCH
39.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1057, the sentiment is Neutral. The current price of 4.88 is below the 20-day moving average (MA) of 6.23, below the 50-day MA of 5.91, and below the 200-day MA of 5.19, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 51.20 is Neutral, neither overbought nor oversold. The STOCH value of 39.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:1057.

Zhejiang Shibao Co. Ltd. Class H Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
HK$4.87B2.1815.64%8.39%2.85%-33.83%
76
Outperform
HK$4.09B7.2510.31%13.26%-3.80%-27.62%
68
Neutral
HK$15.49B7.265.45%1.02%4.73%492.16%
65
Neutral
HK$17.89B17.249.38%1.37%35.32%24.24%
65
Neutral
HK$3.69B6.1833.52%9.59%-0.88%50.26%
64
Neutral
HK$1.99B7.246.48%3.20%13.35%-38.32%
62
Neutral
$20.33B14.63-3.31%3.23%1.93%-12.26%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:1057
Zhejiang Shibao Co. Ltd. Class H
6.25
2.56
69.28%
HK:1316
Nexteer Automotive Group
6.17
0.75
13.88%
HK:2488
Launch Tech Co. Ltd. Class H
9.00
-1.83
-16.90%
HK:1571
Xin Point Holdings Limited
4.08
0.54
15.25%
HK:1760
Intron Technology Holdings Ltd.
1.83
0.14
8.28%
HK:1809
Prinx Chengshan Holdings Limited
7.63
-0.11
-1.42%

Zhejiang Shibao Co. Ltd. Class H Corporate Events

Zhejiang Shibao Shareholders Approve Adjustment to Fund-Raising Investment Projects
Dec 30, 2025

Zhejiang Shibao Company Limited, a PRC-based automotive components maker specializing in steering systems and listed in both A-share and H-share markets, held an extraordinary general meeting (EGM) on 30 December 2025 in Hangzhou. At the EGM, shareholders approved an ordinary resolution to adjust the investment amount of certain fund-raising investment projects, with 99.83% of votes cast in favour, indicating strong shareholder support for the company’s capital allocation plans. The resolution’s passage, with no shareholders required to abstain under Hong Kong Listing Rules, reinforces management’s flexibility to reallocate funds among approved projects, which could influence the progress and prioritization of its investment pipeline and may affect future operational and growth initiatives. Pan-China Certified Public Accountants LLP acted as the scrutineer of the poll, and all directors attended the meeting in person or electronically, underscoring the board’s engagement in the decision.

Zhejiang Shibao Proposes Adjustments to Fund-Raising Projects
Dec 5, 2025

Zhejiang Shibao Co. Ltd. has announced a proposed adjustment and extension of certain fund-raising investment projects, subject to shareholder approval. The company has issued 32,987,747 RMB-denominated ordinary shares, raising net proceeds of RMB344,087,745.02, which is lower than initially intended. As a result, the company has revised the allocation of proceeds across its investment projects, including the development of automotive intelligent steering systems and related technologies.

Zhejiang Shibao Completes Share Reduction Plan
Nov 11, 2025

Zhejiang Shibao Co. Ltd. has announced the completion of a share reduction plan by its controlling shareholder, Zhejiang Shibao Holding Group Co., Ltd. The plan involved reducing the shareholder’s stake by 16,452,647 A shares, representing 2% of the company’s total share capital, through block trading. This strategic move, completed between September and November 2025, leaves Shibao Holding with a 32.90% ownership in the company, potentially impacting the company’s market dynamics and shareholder structure.

Zhejiang Shibao Strengthens Audit Committee Governance
Nov 9, 2025

Zhejiang Shibao Co. Ltd. has outlined the terms of reference for its audit committee, which is composed of at least three directors, primarily independent non-executive directors. The committee is tasked with overseeing the company’s financial reporting, risk management, and internal control systems, and it plays a crucial role in managing the company’s relationship with its external auditors. This announcement highlights the company’s commitment to maintaining robust governance practices and ensuring the independence and effectiveness of its audit processes, which are vital for stakeholder confidence.

Zhejiang Shibao Establishes Remuneration Committee Guidelines
Nov 9, 2025

Zhejiang Shibao Company Limited has outlined the terms of reference for its Remuneration Committee, which will be composed of at least three directors, with a majority being independent non-executive directors. The Committee is tasked with advising the Board on remuneration policies for directors and senior management, ensuring transparency and fairness in compensation, and aligning with corporate goals. This move is expected to enhance governance and ensure competitive and fair remuneration practices, potentially impacting the company’s operational efficiency and stakeholder confidence.

Zhejiang Shibao Co. Ltd. Strengthens Governance with New Nomination Committee Procedures
Nov 9, 2025

Zhejiang Shibao Co. Ltd. has outlined the rules of procedure for its Nomination Committee, emphasizing the importance of board diversity and the selection of qualified individuals for directorships. The committee is tasked with reviewing the board’s structure and composition, assessing the independence of directors, and ensuring alignment with the company’s corporate strategy. This move is expected to strengthen the company’s governance framework and enhance its strategic positioning in the industry.

Zhejiang Shibao Co. Ltd. Announces Successful EGM Outcomes
Nov 7, 2025

Zhejiang Shibao Co. Ltd. announced the results of its Extraordinary General Meeting held on November 7, 2025, where all proposed resolutions were passed. Key resolutions included amendments to the Articles of Association and Management Rules of Proceeds, as well as the appointment of Mr. Li Xing Jian as an independent non-executive director. These changes are expected to streamline governance and enhance operational efficiency, potentially impacting the company’s strategic direction and stakeholder engagement.

Zhejiang Shibao Co. Ltd. Announces Board Composition and Committee Roles
Nov 7, 2025

Zhejiang Shibao Co. Ltd. has announced the composition of its board of directors, which includes executive, non-executive, employee, and independent non-executive directors. The announcement also details the membership of various board committees, highlighting the roles and functions of each director. This structured governance is likely to enhance the company’s strategic decision-making and oversight, potentially impacting its operational efficiency and stakeholder confidence.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jan 24, 2026