China Lesso Group Holdings (2128) AI Stock Analysis

• Market Cap: HK$13.55B
• Dividend Yield: 4.32%
• Average Volume (3M): 6.95M
• Price to Earnings (P/E): 7.5
• Beta (1Y): 1.29
• Revenue Growth: -11.15%
• EPS Growth: -12.35%
• Country: HK
• Employees: 20,400
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 0.37
• Shares Outstanding: 3,102,418,500
• 10 Day Avg. Volume: 6,820,219
• 30 Day Avg. Volume: 6,954,954
• PEG Ratio: -0.21
• Price to Book (P/B): 0.42
• Price to Sales (P/S): 0.37
• P/FCF Ratio: 5.01
• 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$5.90
• Price Target Upside: 27.43% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: HK$5.00 ▲(7.99% Upside)

The overall stock score is primarily influenced by financial performance and valuation. While the company maintains strong profitability margins and a solid balance sheet, concerns about declining revenue and lack of cash flow data weigh on the score. The stock's valuation appears attractive with a low P/E ratio and high dividend yield, but technical indicators suggest bearish momentum, limiting the overall score.

Positive Factors

Strong Profitability Margins

The company's strong gross profitability margins indicate efficient cost management and product pricing strategies, supporting long-term financial health.

Solid Balance Sheet

A solid balance sheet with moderate leverage and a healthy equity ratio enhances financial stability and supports future growth initiatives.

Diverse Revenue Streams

Diverse revenue streams from multiple channels and markets reduce dependency on any single source, providing resilience against market fluctuations.

Negative Factors

Declining Revenue

A significant decline in revenue suggests challenges in maintaining sales growth, potentially impacting long-term market position and profitability.

Zero Cash Flow

The absence of cash flow data raises concerns about cash generation efficiency, limiting financial flexibility and ability to invest in growth.

Declining Profit Margins

Declining profit margins indicate reduced efficiency in converting revenue into profit, which could affect long-term profitability and shareholder returns.

China Lesso Group Holdings Business Overview & Revenue Model

Company Description

China Lesso Group Holdings Limited, an investment holding company, manufactures and sells piping and building materials in China and internationally. The company offers piping systems for civil buildings, municipal engineering, home decoration, and agriculture applications; sanitary ware products, doors and windows, kitchen cabinets, integrated wardrobes, and water purifiers; and quartz stones, sealants, fire protection products, and valves. It also provides water environment treatment, waste gas treatment, solid waste disposal, dangerous waste disposal, soil remediation, engineering consultancy, environmental monitoring, environmental facility protection, ocean protection, environmental investment, and basic scientific research services. The company offers its products primarily to independent distributors, civil contractors, property developers, utility companies, and municipalities. The company was founded in 1986 and is headquartered in Foshan, China. China Lesso Group Holdings Limited operates as a subsidiary of New Fortune Star Limited.

How the Company Makes Money

China Lesso Group generates revenue through the sale of a diverse array of products, primarily focusing on plastic pipes and related fittings, which are essential in construction and plumbing applications. The company has established multiple revenue streams, including direct sales to construction firms, distribution through retail channels, and exports to international markets. Key partnerships with construction companies and governmental bodies in various regions significantly contribute to its earnings. Additionally, Lesso invests in research and development to innovate and expand its product offerings, ensuring alignment with market demands and regulatory standards, which enhances its competitive edge and revenue potential.

China Lesso Group Holdings Financial Statement Overview

Summary

China Lesso Group Holdings shows strong profitability margins and a solid balance sheet with moderate leverage and a healthy equity ratio. However, declining revenue and profitability margins, coupled with a lack of cash flow data, raise concerns about future sustainability and financial flexibility.

Income Statement

The income statement shows a mixed performance. The Gross Profit Margin for 2024 is approximately 26.6%, indicating good profitability. However, the Net Profit Margin declined to 6.2% from 7.7% in 2023, showing a decrease in net income efficiency. Revenue decreased by 12.4% from 2023 to 2024, suggesting challenges in maintaining sales growth. EBIT Margin also saw a decline to 9.2% from 16.5% in the previous year, while EBITDA Margin remained relatively stable at 20.1%. Overall, while profitability remains decent, declining revenue and margins signal potential areas of concern.

Balance Sheet

The balance sheet reflects a stable financial position with a Debt-to-Equity Ratio of 0.82, indicating moderate leverage. The Return on Equity (ROE) stands at 7.1%, a decrease from 10.1% in 2023, reflecting reduced profitability relative to equity. The Equity Ratio is 40.9%, showing a healthy proportion of equity in the company’s asset base. Overall, the balance sheet is strong, but reducing leverage and improving ROE would enhance financial health further.

Cash Flow

The cash flow statement highlights concerns with zero reported Operating and Free Cash Flows in 2024, compared to previous positive figures. This absence of cash flow data complicates the assessment of cash generation efficiency and financial flexibility. The Free Cash Flow to Net Income Ratio cannot be calculated for 2024, but it was positive in prior years. This lack of visibility in cash flow metrics presents a significant risk to financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	25.94B	27.03B	30.87B	30.77B	32.06B	28.07B
Gross Profit	6.97B	7.19B	8.12B	8.35B	8.12B	8.37B
EBITDA	5.22B	5.44B	5.61B	5.79B	5.72B	6.20B
Net Income	1.69B	1.68B	2.37B	2.52B	3.04B	3.75B
Balance Sheet
Total Assets	56.90B	58.33B	60.03B	58.95B	54.48B	46.53B
Cash, Cash Equivalents and Short-Term Investments	4.94B	6.64B	5.17B	6.40B	7.00B	6.57B
Total Debt	19.05B	19.65B	20.70B	20.61B	18.28B	16.24B
Total Liabilities	32.11B	33.91B	35.72B	36.36B	32.68B	26.17B
Stockholders Equity	24.32B	23.84B	23.50B	21.79B	20.77B	19.84B
Cash Flow
Free Cash Flow	2.29B	2.00B	2.49B	1.26B	1.91B	747.67M
Operating Cash Flow	3.13B	3.75B	6.70B	4.57B	5.17B	2.84B
Investing Cash Flow	-200.58M	-1.71B	-4.25B	-4.55B	-5.49B	-4.26B
Financing Cash Flow	-2.72B	-1.95B	-3.04B	-504.40M	87.18M	1.56B

China Lesso Group Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.63
• 50DMA: Positive
• 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:2128, the sentiment is Positive. The current price of 4.63 is above the 20-day moving average (MA) of 4.48, above the 50-day MA of 4.62, and above the 200-day MA of 4.21, indicating a bullish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 55.78 is Neutral, neither overbought nor oversold. The STOCH value of 61.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2128.

China Lesso Group Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2128	65 Neutral	HK$13.55B	7.45	7.03%	4.32%	-11.15%	-12.35%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1108	55 Neutral	€5.85B	-2.62	-24.93%	―	-35.74%	-1755.61%
6865	54 Neutral	$43.66B	74.40	1.54%	5.34%	-18.50%	-83.76%
8349	47 Neutral	HK$716.00M	-101.13	-11.50%	―	-38.08%	32.95%
0713	40 Neutral	$356.45M	-1.43	-21.28%	―	-23.38%	-35.88%
1796	40 Underperform	HK$1.49B	-46.42	-29.77%	―	-38.13%	-74.92%

China Lesso Group Holdings Corporate Events

China Lesso Group to Terminate Share Award Scheme

China Lesso Group Holdings Limited has announced the termination of its share award scheme, which was initially adopted in 2018. The decision to terminate the scheme, effective from August 31, 2025, is due to no shares being awarded and aims to reduce administrative costs. The termination is not expected to impact any existing rights of participants, as there have been no selected participants, and is considered beneficial for the company and its shareholders.

The most recent analyst rating on (HK:2128) stock is a Buy with a HK$5.00 price target. To see the full list of analyst forecasts on China Lesso Group Holdings stock, see the HK:2128 Stock Forecast page.

China Lesso Group Strengthens Governance with New Nomination Committee

China Lesso Group Holdings Limited has established a Nomination Committee to enhance its corporate governance structure. The committee, formed by a board resolution, is responsible for reviewing service contracts, recommending changes, and ensuring the proper discharge of duties by directors and senior management. This move is expected to strengthen the company’s management oversight and align with best practices in corporate governance.

The most recent analyst rating on (HK:2128) stock is a Buy with a HK$5.00 price target. To see the full list of analyst forecasts on China Lesso Group Holdings stock, see the HK:2128 Stock Forecast page.

China Lesso Reports 8% Revenue Decline in H1 2025

China Lesso Group Holdings Limited reported a decrease in financial performance for the first half of 2025, with revenue dropping by 8% to RMB12,475 million and profit falling by 8% to RMB935 million compared to the same period in 2024. Despite the decline in earnings, the company maintained its basic earnings per share at RMB0.34 and decided not to declare an interim dividend, reflecting a cautious approach in response to the challenging market conditions.

The most recent analyst rating on (HK:2128) stock is a Buy with a HK$5.00 price target. To see the full list of analyst forecasts on China Lesso Group Holdings stock, see the HK:2128 Stock Forecast page.

China Lesso Group to Discuss Dividend and Interim Results

China Lesso Group Holdings Limited has announced that its board of directors will convene on August 29, 2025, to discuss the potential declaration of a dividend and approve the unaudited interim results for the first half of 2025. This meeting is significant as it will determine the company’s financial performance and shareholder returns, potentially impacting its market positioning and stakeholder interests.