China Lesso Group Holdings (2128) AI Stock Analysis

• Market Cap: HK$13.95B
• Dividend Yield: 4.42%
• Average Volume (3M): 6.95M
• Price to Earnings (P/E): 7.7
• Beta (1Y): 1.30
• 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$5.30
• Price Target Upside: 17.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: HK$5.00 ▲(10.38% 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 (2128) is a leading manufacturer and distributor of building materials and home improvement products in China. The company operates primarily in the plastic pipe and fittings sector, as well as in other segments such as home improvement materials, sanitary ware, and thermal insulation products. With a robust network of production facilities and a strong emphasis on innovation and quality, China Lesso aims to cater to both domestic and international markets, providing a comprehensive range of solutions for construction and infrastructure projects.

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: Negative
• Last Price: 4.53
• 50DMA: Negative
• 100DMA: Negative
• 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:2128, the sentiment is Negative. The current price of 4.53 is below the 20-day moving average (MA) of 4.56, below the 50-day MA of 4.55, and above the 200-day MA of 4.31, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 48.11 is Neutral, neither overbought nor oversold. The STOCH value of 23.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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$13.95B	7.67	7.03%	4.42%	-11.15%	-12.35%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1108	55 Neutral	HK$5.25B	-2.42	-24.93%	―	-35.74%	-1755.61%
6865	54 Neutral	HK$36.53B	60.70	1.54%	5.67%	-18.50%	-83.76%
8349	41 Neutral	HK$568.00M	-80.23	-11.50%	―	-38.08%	32.95%
0713	40 Neutral	HK$328.73M	-1.32	-21.28%	―	-23.38%	-35.88%
1796	38 Underperform	HK$1.46B	-57.36	-29.77%	―	-38.13%	-74.92%

China Lesso Group Holdings Corporate Events

China Lesso Group Announces Board Composition and Roles

China Lesso Group Holdings Limited has announced the composition of its board of directors, highlighting the roles and functions of each member. This announcement underscores the company’s commitment to strong governance and strategic oversight, potentially impacting its operational efficiency and stakeholder confidence.