Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd. (1938) AI Stock Analysis

• Market Cap: HK$434.79M
• Dividend Yield: N/A
• Average Volume (3M): 1.69M
• Price to Earnings (P/E): 1.5
• Beta (1Y): 0.35
• Revenue Growth: -13.26%
• EPS Growth: 63.38%
• Country: HK
• Employees: 858
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 0.18
• Shares Outstanding: 1,011,142,000
• 10 Day Avg. Volume: 363,400
• 30 Day Avg. Volume: 1,689,418
• PEG Ratio: 0.05
• Price to Book (P/B): 0.13
• Price to Sales (P/S): 0.05
• P/FCF Ratio: 0.78
• 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: HK$0.50
• Price Target Upside: 19.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: HK$0.50 ▲(19.05% Upside)

The stock's strong technical indicators and attractive valuation are the primary drivers of its high score. Despite financial performance concerns related to leverage and operational efficiency, the company's robust cash flow generation and upward price momentum support a positive outlook.

Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd. Business Overview & Revenue Model

Company Description

Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited, an investment holding company, manufactures, sells, and exports longitudinal welded steel pipes in the People's Republic of China and internationally. It operates in two segments, Steel Pipes, and Property Development and Investment. The company offers longitudinal and spiral submerged arc-welded steel pipes. It also trades in steel pipes; manufactures and sells petrol fittings, oil country tubular goods, steel pipe and metallurgy equipment, and screw-thread steels; and provides steel pipe casing and lining, and port services. In addition, the company is involved in the property investment, development, and management activities; provision of manufacturing services for processing raw materials into steel pipes; trading of steel plates; and sale of steel fittings and scrap materials. Its steel pipes are primarily used for energy transmission, including oil and gas transmission pipelines, deep sea pipelines, city gas networks, and petrochemicals, as well as mining, infrastructure construction, offshore engineering, steel structure, and water utilities industries. The company was founded in 1993 and is headquartered in Kowloon Bay, Hong Kong. Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited is a subsidiary of Bournam Profits Limited.

How the Company Makes Money

Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd. generates revenue primarily through the manufacture and sale of welded steel pipes. These pipes are essential components in the transportation of oil and natural gas, as well as in various construction projects. The company leverages its manufacturing capabilities to produce high-quality, durable products that meet international standards, thus catering to a global clientele. Key revenue streams include direct sales to energy companies, construction firms, and government infrastructure projects. Additionally, the company may engage in strategic partnerships or joint ventures to expand its market reach and enhance its production capacity, contributing to its earnings.

Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd. Financial Statement Overview

Summary

The company has shown consistent revenue growth and improved net profit margin, but faces challenges with high leverage and low operational efficiency. Strong cash flow generation is a positive indicator of financial health.

Income Statement

The company has shown a consistent revenue growth rate, with an increase from 2022 to 2024. However, gross profit margin has slightly decreased, indicating rising costs. The net profit margin improved significantly in 2024, reflecting better overall profitability. The EBIT and EBITDA margins are relatively low, suggesting challenges in operational efficiency.

Balance Sheet

The company has a high debt-to-equity ratio, which could pose financial risks if not managed properly. Return on Equity (ROE) has improved over the years, indicating better utilization of shareholders' equity. The equity ratio is low, suggesting high leverage and potential financial vulnerability.

Cash Flow

The free cash flow has been positive and showed growth in recent years, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy, indicating efficient cash conversion. The company has managed its capital expenditures well, maintaining positive free cash flow despite industry challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.69B	2.94B	2.65B	2.36B	1.81B	1.14B
Gross Profit	465.53M	517.41M	554.21M	470.62M	195.52M	206.69M
EBITDA	129.04M	146.35M	175.16M	282.97M	-114.28M	-251.17M
Net Income	254.90M	212.67M	183.78M	163.03M	-94.35M	622.91M
Balance Sheet
Total Assets	6.29B	6.51B	6.42B	6.55B	7.92B	8.54B
Cash, Cash Equivalents and Short-Term Investments	44.60M	53.32M	260.71M	16.13M	638.46M	19.47M
Total Debt	1.72B	1.87B	1.83B	1.78B	1.81B	3.70B
Total Liabilities	4.84B	5.27B	5.35B	5.62B	7.10B	7.68B
Stockholders Equity	1.45B	1.24B	1.08B	930.94M	825.52M	856.70M
Cash Flow
Free Cash Flow	267.99M	205.87M	334.81M	140.76M	-973.59M	42.75M
Operating Cash Flow	245.04M	205.87M	431.07M	154.07M	-904.63M	71.36M
Investing Cash Flow	-32.96M	-55.82M	-8.68M	38.17M	2.56B	1.66B
Financing Cash Flow	-250.81M	-78.47M	-366.03M	-149.10M	-1.71B	-1.79B

Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.42
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1938, the sentiment is Neutral. The current price of 0.42 is below the 20-day moving average (MA) of 0.43, above the 50-day MA of 0.41, and above the 200-day MA of 0.26, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 48.14 is Neutral, neither overbought nor oversold. The STOCH value of 37.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:1938.

Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1938	74 Outperform	HK$434.79M	1.55	19.13%	―	-13.26%	63.38%
1203	71 Outperform	€816.83M	5.13	6.32%	5.62%	16.92%	146.69%
0103	67 Neutral	€2.14B	101.27	1.06%	2.16%	-8.90%	-78.99%
0217	64 Neutral	HK$815.55M	37.03	0.80%	1.54%	-37.08%	-60.64%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
1090	53 Neutral	€1.14B	―	-15.58%	―	-8.38%	-86.16%
1231	53 Neutral	HK$2.12B	131.58	-7.12%	―	-49.95%	-310.53%

Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd. Corporate Events

Chu Kong Petroleum Proposes Share Premium Reduction to Offset Losses

Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd. has announced a proposed share premium reduction to offset its accumulated losses, amounting to approximately RMB 767,097,000. This financial maneuver aims to improve the company’s financial position and provide a clearer picture of its business operations to shareholders and investors. The reduction does not affect the company’s share capital or trading arrangements and is contingent upon shareholder approval and compliance with legal requirements.

Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd. AGM Resolutions Unanimously Passed

Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd. announced that all resolutions proposed at its Annual General Meeting held on June 20, 2025, were unanimously passed by shareholders. The resolutions included re-electing directors, authorizing the board to fix remuneration, re-appointing auditors, and granting mandates for share issuance and repurchase, indicating strong shareholder support and strategic flexibility for the company.