Shanghai Dazhong Public Utilities (Group) Co., Ltd. Class H (1635) AI Stock Analysis

• Market Cap: HK$19.12B
• Dividend Yield: 1.17%
• Average Volume (3M): 89.49M
• Price to Earnings (P/E): 19.6
• Beta (1Y): 1.15
• Revenue Growth: -6.02%
• EPS Growth: N/A
• Country: HK
• Employees: 2,803
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): N/A
• Shares Outstanding: 533,643,000
• 10 Day Avg. Volume: 84,469,429
• 30 Day Avg. Volume: 89,486,813
• PEG Ratio: 2.65
• Price to Book (P/B): 0.70
• Price to Sales (P/S): 0.95
• P/FCF Ratio: -74.90
• 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: 59 Neutral
• Price Target: HK$3.50 ▲(0.57% Upside)

Shanghai Dazhong Public Utilities exhibits stable financial performance with consistent revenue and operational margins. However, moderate profitability and a high P/E ratio suggest potential overvaluation. Technical indicators show mixed signals, with some positive trends but short-term weaknesses. The lack of earnings call and corporate events data limits further insights.

Positive Factors

Regulated utility business model

Operating as a regulated city gas distributor provides steady, contract- and tariff-driven cash flows and predictable demand from residential, commercial, and industrial customers. This structural revenue stability supports long-term planning and lowers earnings volatility versus cyclical sectors.

Strong cash conversion

An OCF-to-net-income ratio of 1.74 indicates efficient conversion of accounting profits into cash, underpinning the company’s ability to fund maintenance capex, service debt, and support distributions. Durable cash generation enhances financial flexibility over multiple years.

Manageable leverage

A moderate debt-to-equity ratio around 0.69 and a 37% equity ratio signal conservative financial structure for a capital-intensive utility. This balance limits refinancing risk and preserves capacity to fund network investments while maintaining credit resilience through business cycles.

Negative Factors

Low return on equity

ROE of roughly 2.7% reflects limited profitability relative to capital employed, suggesting the business generates weak returns on shareholder equity. Persistently low ROE can constrain reinvestment, reduce shareholder returns, and imply structural challenges in improving asset productivity.

Thin net profit margins

A net margin near 3.7% indicates limited buffer to absorb rising procurement, operating, or regulatory cost pressures. In a gas distribution model where upstream costs and regulated pricing matter, skinny margins increase earnings sensitivity and limit capacity to invest or expand without external funding.

Revenue contraction trend

Reported revenue decline of about 6% signals demand or pricing pressures that could erode scale benefits and network utilization. Sustained revenue contraction would pressure margins and cash flow, making it harder to support capex, service debt, and maintain long-term growth initiatives.

Shanghai Dazhong Public Utilities (Group) Co., Ltd. Class H Business Overview & Revenue Model

Company Description

Shanghai Dazhong Public Utilities (Group) Co., Ltd., an investment holding company, engages in the piped gas supply and wastewater treatment activities in the People's Republic of China. The company operates four segments: Piped Gas Supply; Wastewater Treatment; Public Infrastructure Projects; and Transportation Services. It sells, distributes, and supplies piped natural gas; constructs and installs gas pipelines; treats wastewater and handles urban wastewater; rents cars, taxies, and tourist cars; and offers freight transport, relocation, liquefied petroleum gas delivery, and tourism services, as well as operates Dazhong Chuxing platform. The company also offers infrastructure investment, construction, operation maintenance, and protection services; public infrastructure project services; and transportation, storage and, postal services, as well as sells gas related products. In addition, it provides financial services, including financial leasing and pre-paid cards; and scientific research and technological services, as well as invests in venture capital enterprises. Further, the company engages in the municipal road operation; agriculture development; payment; assets management; and financial consultancy activities. It owns approximately 6,867 kilometers of natural gas pipeline; and 1,000 operating vehicles. The company was formerly known as Shanghai Pudong Dazhong Taxi Co., Ltd. and changed its name to Shanghai Dazhong Public Utilities (Group) Co., Ltd. in May 2003. Shanghai Dazhong Public Utilities (Group) Co., Ltd. was founded in 1991 and is based in Shanghai, the People's Republic of China.

How the Company Makes Money

Shanghai Dazhong Public Utilities generates revenue through multiple key streams. Primarily, the company earns income from the sale of water, natural gas, and sewage treatment services to residential, commercial, and industrial customers. Additionally, revenue is derived from infrastructure construction and maintenance projects related to its utility services. The company may also engage in joint ventures and partnerships with local governments or private entities to expand its service offerings and infrastructure. Regulatory frameworks and tariffs set by government authorities play a significant role in determining pricing, which directly impacts Dazhong's earnings. Furthermore, investments in technological advancements and efficiency improvements help reduce operational costs, contributing positively to its profit margins.

Shanghai Dazhong Public Utilities (Group) Co., Ltd. Class H Financial Statement Overview

Summary

Shanghai Dazhong Public Utilities maintains a stable financial profile with consistent revenue and operational margins. Debt levels are manageable, but profitability metrics suggest moderate returns on equity. Cash flow generation is robust, though the lack of free cash flow data limits full assessment of financial flexibility.

Income Statement

Shanghai Dazhong Public Utilities shows stable gross and EBIT margins with gross profit margin at 15.21% and EBIT margin at 6.77% for 2024. Net profit margin is relatively low at 3.68%, indicating potential cost pressures. Revenue has seen minimal fluctuation, with a slight contraction of 1.08% from 2023, reflecting a stable demand in the regulated utilities sector. However, the EBITDA margin maintains robustness at 16.93%, suggesting effective cost management at the operational level.

Balance Sheet

The company exhibits a moderate debt-to-equity ratio of 0.69 in 2024, indicating a balanced approach to leverage. Return on equity is modest at 2.73%, reflecting limited profitability on shareholder equity. Equity ratio stands at 37.19%, suggesting a stable financial foundation, though there is room for improvement in equity utilization.

Cash Flow

Operating cash flow to net income ratio is strong at 1.74 in 2024, showing efficient cash conversion from income. However, free cash flow growth is not calculable due to missing data, and this limits the assessment of cash flow health. The cash flow profile indicates stable operational cash generation but lacks visibility in cash reinvestment and financing activities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.12B	6.34B	6.40B	5.85B	5.54B	4.91B
Gross Profit	1.01B	963.91M	1.01B	838.79M	935.95M	894.65M
EBITDA	851.04M	1.07B	1.05B	378.08M	1.18B	1.47B
Net Income	444.01M	233.15M	212.54M	―	303.36M	515.23M
Balance Sheet
Total Assets	23.03B	22.99B	22.83B	23.58B	24.07B	23.62B
Cash, Cash Equivalents and Short-Term Investments	3.74B	3.52B	3.33B	3.21B	2.53B	2.77B
Total Debt	5.19B	5.93B	8.19B	9.00B	8.72B	7.02B
Total Liabilities	12.57B	12.95B	13.10B	14.01B	14.06B	13.75B
Stockholders Equity	8.90B	8.55B	8.32B	8.24B	8.72B	8.64B
Cash Flow
Free Cash Flow	265.54M	-80.34M	336.44M	132.13M	27.99M	-419.31M
Operating Cash Flow	760.64M	405.52M	689.83M	417.43M	674.26M	229.07M
Investing Cash Flow	-9.11M	113.09M	397.22M	311.03M	-493.93M	-1.22B
Financing Cash Flow	-643.91M	-327.44M	-866.52M	136.41M	-261.42M	215.14M

Shanghai Dazhong Public Utilities (Group) Co., Ltd. Class H Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1635, the sentiment is Negative. The current price of 3.48 is above the 20-day moving average (MA) of 3.35, below the 50-day MA of 3.62, and above the 200-day MA of 2.91, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 36.64 is Neutral, neither overbought nor oversold. The STOCH value of 21.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1635.

Shanghai Dazhong Public Utilities (Group) Co., Ltd. Class H Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2886	67 Neutral	HK$1.56B	7.61	8.96%	6.91%	-16.94%	-22.17%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
1083	61 Neutral	HK$13.48B	7.86	6.98%	6.38%	3.86%	30.34%
1635	59 Neutral	HK$19.12B	19.64	5.32%	1.17%	-6.02%	―
1600	59 Neutral	HK$2.88B	9.09	4.88%	4.94%	7.55%	-32.06%
3633	48 Neutral	HK$7.83B	51.35	2.04%	0.71%	-7.82%	-38.06%
1265	45 Neutral	HK$323.72M	-5.68	-3.93%	―	-11.42%	65.17%

Shanghai Dazhong Public Utilities (Group) Co., Ltd. Class H Corporate Events

Shanghai Dazhong Public Utilities Forecasts Sharp 2025 Profit Rise on Financial Asset Income

Shanghai Dazhong Public Utilities (Group) Co., Ltd., a Hong Kong-listed Chinese public utilities group, derives most of its revenue from stable public utility operations while also generating income from financial assets held via associated companies. The company has issued a positive profit alert for 2025, estimating unaudited net profit attributable to shareholders at RMB350 million to RMB500 million, a year-on-year increase of about 50% to 114%, driven largely by higher income from financial assets in associated companies, while underlying profit excluding non-recurring items is expected to range from a slight decline to moderate growth; the figures remain preliminary and unaudited, and investors are cautioned as final results will be released by end-March 2026.

The most recent analyst rating on (HK:1635) stock is a Hold with a HK$3.50 price target. To see the full list of analyst forecasts on Shanghai Dazhong Public Utilities (Group) Co., Ltd. Class H stock, see the HK:1635 Stock Forecast page.

Shanghai Dazhong Expands LPG Distribution Services via New Connected Transactions in Shanghai

Shanghai Dazhong Public Utilities, through its subsidiary Dazhong Logistics Delivery, has entered into two new service contracts with associates of Shanghai Gas to expand its role in the liquefied petroleum gas (LPG) distribution chain in Shanghai. Under the Cylinder LPG Uniform Delivery and Safety Service Contract with Shanghai Gas Chongming and the LPG Cylinder Users Entrusted Delivery Service Contract with Shanghai Oriental Energy, Dazhong Logistics Delivery will provide unified transportation, installation and safety inspection services for LPG cylinders across Chongming District and wider Shanghai, receiving service fees in return. As these are continuing connected transactions with associates of a substantial shareholder, they fall under Hong Kong Listing Rules disclosure and annual review requirements, but the relatively small size of the deals exempts the company from needing a shareholder circular or independent shareholders’ approval, indicating incremental but regulated expansion of its service revenue without triggering major governance hurdles for investors.

The most recent analyst rating on (HK:1635) stock is a Hold with a HK$4.00 price target. To see the full list of analyst forecasts on Shanghai Dazhong Public Utilities (Group) Co., Ltd. Class H stock, see the HK:1635 Stock Forecast page.