China Lesso Group Holdings (2128) AI Stock Analysis

• Market Cap: HK$13.92B
• Dividend Yield: 4.6%
• Average Volume (3M): 6.40M
• Price to Earnings (P/E): 7.6
• Beta (1Y): 1.31
• Revenue Growth: -14.13%
• EPS Growth: -30.69%
• Country: HK
• Employees: 20,400
• Sector: Industrials
• Sector Strength: 90
• Industry: Construction
• EPS (TTM): 0.23
• Shares Outstanding: 3,102,418,500
• 10 Day Avg. Volume: 7,835,293
• 30 Day Avg. Volume: 6,403,414
• PEG Ratio: -0.67
• Price to Book (P/B): 0.53
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -64.98
• 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

• Rating: 80 Outperform
• Price Target: HK$4.50 ▲(3.45%Upside)

The stock scores highly due to its attractive valuation with a low P/E ratio and a high dividend yield, which are the most significant factors. Technical indicators also support a bullish outlook. However, financial performance shows some weaknesses, notably declining revenue and margins and a lack of cash flow data, which could impact future sustainability and investor confidence.

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 Holdings generates revenue through the manufacturing and sale of a diverse array of building materials and home improvement products. The company's primary revenue streams include plastic piping systems, where it is a market leader in China, as well as other construction-related products like sanitary ware, kitchen cabinets, and decorative boards. China Lesso benefits from its extensive distribution network and strategic partnerships, which enhance its market reach both domestically and internationally. Additionally, the company leverages economies of scale and advanced manufacturing technologies to maintain competitive pricing and quality, securing its position as a preferred supplier in the construction and infrastructure sectors.

China Lesso Group Holdings Financial Statement Overview

Summary

The company has strong profitability margins and a solid balance sheet with moderate leverage. However, declining revenue and profitability margins, along 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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	27.03B	30.87B	30.77B	32.06B	28.07B
Gross Profit	7.19B	8.12B	8.35B	8.12B	8.37B
EBITDA	5.44B	5.61B	5.79B	5.72B	6.20B
Net Income	1.68B	2.37B	2.52B	3.04B	3.75B
Balance Sheet
Total Assets	58.33B	60.03B	58.95B	54.48B	46.53B
Cash, Cash Equivalents and Short-Term Investments	6.64B	5.17B	6.65B	7.15B	6.57B
Total Debt	19.65B	20.70B	20.61B	18.28B	16.24B
Total Liabilities	33.91B	35.72B	36.36B	32.68B	26.17B
Stockholders Equity	23.84B	23.50B	21.79B	20.77B	19.84B
Cash Flow
Free Cash Flow	2.00B	2.49B	1.26B	1.91B	747.67M
Operating Cash Flow	3.75B	6.70B	4.57B	5.17B	2.84B
Investing Cash Flow	-1.71B	-4.25B	-4.55B	-5.49B	-4.26B
Financing Cash Flow	-1.95B	-3.04B	-504.40M	87.18M	1.56B

China Lesso Group Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.35
• 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:2128, the sentiment is Positive. The current price of 4.35 is above the 20-day moving average (MA) of 4.23, above the 50-day MA of 3.99, and above the 200-day MA of 3.60, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 54.93 is Neutral, neither overbought nor oversold. The STOCH value of 68.52 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	80 Outperform	HK$13.92B	7.62	7.12%	4.60%	-14.13%	-30.69%
Sector *	65 Neutral	$10.86B	15.57	5.28%	1.92%	3.13%	-27.76%
FGSGF	―	$4.84B	51.69	1.56%	3.63%	―	―
LUG	―	€677.57M	―	-17.32%	―	―	―
WHWRF	―	$49.95M	―	-25.09%	―	―	―
1796	58 Neutral	HK$1.64B	―	-34.74%	―	16.56%	-1.34%
8349	46 Neutral	HK$864.00M	―	-7.31%	―	-44.43%	51.24%

China Lesso Group Holdings Corporate Events

China Lesso Group Announces AGM Results and Director Changes

China Lesso Group Holdings Limited announced the successful passage of all proposed resolutions at its annual general meeting held on May 20, 2025. Key decisions included the appointment of Mr. Huang Zhanxiong as an executive director and the re-election of several directors, alongside the declaration of a final dividend of HK20 cents per share. These developments reflect the company’s stable governance and commitment to shareholder returns, potentially strengthening its position in the industry.

China Lesso Group Announces Board Composition and Committee Roles

China Lesso Group Holdings Limited has announced the composition of its board of directors, highlighting the roles and functions of each member. The board has established four committees: Audit, Nomination, Remuneration, and Sustainable Development, which are crucial for the company’s governance and strategic direction. This announcement underscores the company’s commitment to structured governance and sustainable development, potentially impacting its operational efficiency and stakeholder confidence.

China Lesso Group Announces AGM and Key Resolutions for 2025

China Lesso Group Holdings Limited has announced its annual general meeting scheduled for May 20, 2025, where shareholders will consider several resolutions, including the approval of audited financial statements, the declaration of a final dividend of HK20 cents per share, and the appointment and re-election of directors. Additionally, the company seeks authorization to allot and issue shares, with a cap of 20% of the existing shares, excluding treasury shares. This meeting and the proposed resolutions are crucial for the company’s governance and strategic direction, impacting its financial management and shareholder relations.