Dongguang Chemical Ltd. (1702) AI Stock Analysis

• Market Cap: HK$1.18B
• Dividend Yield: 2.2%
• Average Volume (3M): 3.73K
• Price to Earnings (P/E): 16.4
• Beta (1Y): 0.01
• Revenue Growth: -8.51%
• EPS Growth: -68.34%
• Country: HK
• Employees: 1,252
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 0.13
• Shares Outstanding: 620,944,000
• 10 Day Avg. Volume: 2,800
• 30 Day Avg. Volume: 3,733
• PEG Ratio: -0.25
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.45
• P/FCF Ratio: -16.78
• 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$2.00 ▲(6.38% Upside)

The overall stock score of 59 reflects a mixed outlook for Dongguang Chemical Ltd. The company's strong balance sheet is offset by challenges in revenue growth and cash flow management. Technical indicators suggest potential bearish trends, while the valuation indicates fair pricing. The absence of earnings call data and corporate events limits further insights.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage enhances financial stability, providing resilience against economic downturns and flexibility for strategic investments.

Operational Efficiency

Positive EBIT and EBITDA margins indicate operational efficiency, allowing the company to sustain profitability despite revenue challenges.

Effective Cash Generation

Effective cash generation relative to net income supports ongoing operations and potential reinvestment in growth opportunities, despite free cash flow challenges.

Negative Factors

Declining Revenue

Declining revenue indicates potential market share loss or demand issues, which could impact long-term growth and profitability if not addressed.

Low Gross Profit Margin

Low gross profit margins suggest limited pricing power or high production costs, which can constrain profitability and competitiveness in the market.

Cash Flow Management Challenges

Negative free cash flow highlights difficulties in converting profits into cash, potentially limiting the company's ability to invest in growth or manage debt effectively.

Dongguang Chemical Ltd. Business Overview & Revenue Model

Company Description

Dongguang Chemical Limited, an investment holding company, manufactures and sells urea in the People's Republic of China. It offers coal-based urea for use as a source of nitrogen in fertilizers and industrial applications, such as production of adhesives, coatings, plastics, and cosmetics; and urea by-products, including methanol, liquid carbon dioxide, and liquefied natural gas. The company was formerly known as Sino-coal Chemical Limited and changed its name to Dongguang Chemical Limited in June 2015. Dongguang Chemical Limited was founded in 1970 and is headquartered in Cangzhou, the People's Republic of China.

How the Company Makes Money

Dongguang Chemical Ltd. generates revenue primarily through the sale of its chemical products to various industries. Its revenue model is built on direct sales to manufacturers and distributors, as well as long-term supply agreements with key clients in sectors such as agriculture and construction. The company also benefits from economies of scale in production, allowing it to offer competitive pricing. Significant partnerships with key players in different industries enhance its market reach and provide stability through consistent orders. Additionally, Dongguang invests in research and development to create new products, opening up additional revenue streams as it expands its product line and enters new markets.

Dongguang Chemical Ltd. Financial Statement Overview

Summary

Dongguang Chemical Ltd. shows a mixed financial performance. The balance sheet is strong with low leverage, but the income statement indicates challenges in revenue growth and profitability. Cash flow management needs improvement, with declining free cash flow. The company should focus on enhancing revenue growth and cash flow efficiency.

Income Statement

Dongguang Chemical Ltd. has faced declining revenues over the past year, with a revenue decrease from the previous period. The Gross Profit Margin is relatively low, indicating tight margins in operations. However, the company maintains positive EBIT and EBITDA margins, reflecting some operational efficiency. The Net Profit Margin has also decreased, showing challenges in maintaining profitability.

Balance Sheet

The company's balance sheet is stable with a low Debt-to-Equity Ratio, indicating conservative leverage. Stockholders' Equity is strong relative to total assets, enhancing financial stability. The Return on Equity is moderate, suggesting adequate but not exceptional returns on shareholders' funds. Overall, the balance sheet reflects a solid financial position with manageable debt levels.

Cash Flow

Dongguang Chemical Ltd. experienced a decline in free cash flow, indicating potential cash management challenges. The Operating Cash Flow to Net Income Ratio is positive, suggesting effective cash generation relative to net income. However, the Free Cash Flow to Net Income Ratio is negative, highlighting issues in converting profits into free cash flow. The company should focus on improving cash flow efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.42B	2.58B	2.92B	3.13B	2.88B	1.96B
Gross Profit	130.43M	172.05M	332.96M	329.61M	458.81M	234.65M
EBITDA	214.15M	260.67M	406.97M	412.42M	564.65M	351.78M
Net Income	66.80M	84.61M	190.08M	194.38M	266.08M	125.28M
Balance Sheet
Total Assets	2.15B	2.02B	2.10B	1.87B	1.84B	1.76B
Cash, Cash Equivalents and Short-Term Investments	752.79M	702.10M	797.81M	535.47M	425.06M	367.10M
Total Debt	41.73M	28.14M	28.04M	28.36M	124.29M	319.40M
Total Liabilities	293.92M	211.98M	334.04M	248.69M	361.52M	524.98M
Stockholders Equity	1.85B	1.80B	1.76B	1.61B	1.47B	1.23B
Cash Flow
Free Cash Flow	13.66M	-68.89M	302.42M	261.12M	271.56M	134.97M
Operating Cash Flow	266.98M	119.76M	372.77M	306.18M	350.37M	312.88M
Investing Cash Flow	-247.93M	-171.00M	-62.89M	-36.38M	-48.25M	-169.90M
Financing Cash Flow	-22.46M	-50.99M	-53.16M	-159.45M	-238.97M	-203.52M

Dongguang Chemical Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.88
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1702, the sentiment is Positive. The current price of 1.88 is above the 20-day moving average (MA) of 1.67, above the 50-day MA of 1.76, and above the 200-day MA of 1.62, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 73.42 is Negative, neither overbought nor oversold. The STOCH value of 83.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1702.

Dongguang Chemical Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
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%
9933	47 Neutral	HK$1.72B	96.59	2.59%	―	11.08%	147.89%
0827	46 Neutral	HK$224.90M	-0.32	-112.79%	―	-22.72%	-212.73%