Jiangsu Innovative Ecological New Materials Ltd. (2116) AI Stock Analysis

• Market Cap: HK$278.40M
• Dividend Yield: 2%
• Average Volume (3M): 254.53K
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.21
• Revenue Growth: 29.04%
• EPS Growth: -1.55%
• Country: HK
• Employees: 64
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): N/A
• Shares Outstanding: 480,000,000
• 10 Day Avg. Volume: 35,200
• 30 Day Avg. Volume: 254,533
• PEG Ratio: -0.37
• Price to Book (P/B): 0.76
• Price to Sales (P/S): 0.96
• P/FCF Ratio: 33.94
• 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: 64 Neutral
• Price Target: HK$0.60 ▲(19.80% Upside)

The score is driven primarily by solid financial stability from a zero-debt balance sheet, offset by weaker profitability versus earlier years and notably volatile/weak cash flow in 2024. Technicals are supportive due to the stock trading above key moving averages, though near-term momentum looks stretched (high RSI). Valuation is fair with a moderate P/E and a modest dividend yield.

Positive Factors

Debt-free Balance Sheet

A zero-debt balance sheet materially reduces refinancing and interest-rate risk, preserving financial optionality. Over 2–6 months this supports resilient operations, capacity for opportunistic investments or acquisitions, and stronger downside protection versus leveraged peers.

Revenue Re-acceleration

Re-accelerating top-line growth indicates renewed demand or improved market penetration in the specialty chemicals market. Sustained revenue gains provide a foundation to scale fixed costs, improve unit economics over time, and justify incremental investment in product or capacity expansion.

Equity base supports flexibility

A relatively large equity base vs assets enhances balance-sheet resilience and reduces refinancing dependence. Structurally, this enables management to fund capex, sustain distributions, or absorb cyclical downturns without immediate external debt, preserving strategic choices over months.

Negative Factors

Weak cash conversion

Poor cash conversion means reported profits are not translating into readily usable cash. Over the medium term this constrains internal funding for capex, working capital, dividends, or M&A, and can force reliance on equity or asset sales to finance growth or obligations.

Volatile and weakening cash flow

Significant FCF volatility across recent years undermines predictability of capital allocation and weakens resilience to shocks. Structural swings in operating cash complicate multi-period planning, increase financing risk during downturns, and reduce credibility of sustainable shareholder returns.

Compressed profitability and declining net income

Material margin compression and a drop in net income versus prior year suggest weaker pricing power or higher input costs. Structurally lower profitability limits reinvestment capacity and returns on equity, making it harder to scale profitably and sustain competitive positioning over months.

Jiangsu Innovative Ecological New Materials Ltd. Business Overview & Revenue Model

Company Description

Jiangsu Innovative Ecological New Materials Limited develops, manufactures, and markets oil refining agents and fuel additives in the People's Republic of China and Sudan. The company was founded in 2002 and is headquartered in Yixing, the People's Republic of China. Jiangsu Innovative Ecological New Materials Limited is a subsidiary of Innovative Green Holdings Limited.

How the Company Makes Money

Jiangsu Innovative Ecological New Materials Ltd. generates revenue primarily through the sale of its ecological materials products. The company's revenue model is based on manufacturing and supplying these innovative materials to various industries, including construction and packaging, which utilize them to meet sustainability standards and reduce environmental footprints. Key revenue streams include direct sales to businesses, partnerships with construction firms and packaging companies, and potential licensing of their technology for wider application. Factors contributing to its earnings include the growing demand for eco-friendly materials and the company's ability to innovate and meet the evolving needs of its clients.

Jiangsu Innovative Ecological New Materials Ltd. Financial Statement Overview

Summary

Financial strength is supported by a debt-free, conservatively positioned balance sheet (strong downside protection), but operating quality is mixed: 2024 revenue re-accelerated (+17.3%) while profitability has compressed versus prior years and net income declined from 2023 to 2024. Cash flow is the main weakness, with sharply lower 2024 free cash flow and weak cash conversion versus net income, indicating volatile and less reliable cash generation.

Income Statement

Revenue growth in 2024 re-accelerated to +17.3%, but the multi-year pattern is choppy with a notable step-down from the 2022 peak. Profitability has compressed meaningfully versus earlier years: 2024 gross margin (22.6%) and net margin (7.7%) are well below 2019–2020 levels, and net income declined from 2023 to 2024. Overall, the business remains profitable with positive operating earnings, but margins and earnings power appear structurally weaker than prior cycles.

Balance Sheet

The balance sheet is conservatively positioned with zero total debt across all reported years, which reduces refinancing and interest-rate risk. Equity remains large relative to the asset base, supporting financial flexibility and downside protection. The main trade-off is moderate returns on equity (about 6.0% in 2024 versus ~9.4% in 2023), suggesting profitability is not fully leveraging the capital base despite the very low leverage.

Cash Flow

Cash generation weakened sharply in 2024, with operating cash flow falling to 9.9M and free cash flow dropping to 5.2M (free cash flow growth of -84.7% versus 2023). Cash conversion also deteriorated: operating cash flow covered only ~0.24x of net income in 2024, indicating profits were less supported by cash receipts. While free cash flow remained positive in 2024 and was strong in 2023, the volatility (including negative operating and free cash flow in 2022) raises questions about consistency and working-capital or investment swings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	200.71M	182.20M	186.07M	257.18M	177.33M	159.93M
Gross Profit	47.11M	41.25M	48.70M	53.88M	36.49M	44.91M
EBITDA	27.25M	20.29M	24.03M	31.60M	14.53M	27.77M
Net Income	16.93M	13.98M	21.12M	11.46M	11.66M	22.05M
Balance Sheet
Total Assets	273.31M	276.62M	259.40M	347.48M	315.34M	305.61M
Cash, Cash Equivalents and Short-Term Investments	117.11M	95.25M	95.20M	146.48M	152.06M	144.76M
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	36.56M	44.67M	33.64M	47.00M	25.85M	22.49M
Stockholders Equity	236.74M	231.96M	225.75M	300.48M	289.49M	283.12M
Cash Flow
Free Cash Flow	-5.27M	5.18M	39.58M	-8.15M	9.41M	2.61M
Operating Cash Flow	-5.26M	9.94M	46.88M	-4.72M	10.48M	7.45M
Investing Cash Flow	-8.83M	-11.93M	-2.41M	-484.00K	1.96M	-1.79M
Financing Cash Flow	0.00	-8.72M	-96.70M	-3.87M	-4.04M	-4.38M

Jiangsu Innovative Ecological New Materials Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.50
• 50DMA: Positive
• 100DMA: Positive
• 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:2116, the sentiment is Positive. The current price of 0.5 is below the 20-day moving average (MA) of 0.57, below the 50-day MA of 0.52, and above the 200-day MA of 0.48, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 54.54 is Neutral, neither overbought nor oversold. The STOCH value of 52.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2116.

Jiangsu Innovative Ecological New Materials Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2116	64 Neutral	HK$278.40M	15.26	7.30%	2.00%	29.04%	-1.55%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
1950	60 Neutral	HK$100.80M	3.99	3.61%	―	-12.19%	108.93%
0301	56 Neutral	HK$606.89M	-17.46	-14.53%	―	0.35%	-153.95%
1047	54 Neutral	HK$129.22M	388.89	0.07%	―	5.65%	―
1932	50 Neutral	HK$220.00M	-3.54	-15.93%	―	-25.21%	12.04%
0701	49 Neutral	HK$361.70M	-3.60	-8.05%	―	-24.13%	-27.54%

Jiangsu Innovative Ecological New Materials Ltd. Corporate Events

Jiangsu Innovative Ecological New Materials Ltd. Updates Nomination Committee Terms

Jiangsu Innovative Ecological New Materials Ltd. has updated the terms of reference for its Nomination Committee, a move that reflects its ongoing commitment to corporate governance. The amendments, effective from October 30, 2025, aim to ensure a diverse and independent composition of the committee, thereby enhancing decision-making processes and aligning with best practices in the industry.