Zhengye International Holdings Co., Ltd. (3363) AI Stock Analysis

• Market Cap: HK$185.00M
• Dividend Yield: 5.95%
• Average Volume (3M): 12.07K
• Price to Earnings (P/E): 7.2
• Beta (1Y): 0.15
• Revenue Growth: 0.80%
• EPS Growth: 81.27%
• Country: HK
• Employees: 2,705
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): <0.01
• Shares Outstanding: 500,000,000
• 10 Day Avg. Volume: 7,000
• 30 Day Avg. Volume: 12,066
• PEG Ratio: -0.02
• Price to Book (P/B): 0.16
• Price to Sales (P/S): 0.07
• P/FCF Ratio: -0.28
• 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: 58 Neutral
• Price Target: ―

The overall score of 57.9 reflects Zhengye International Holdings Co., Ltd.'s struggles with revenue growth and operational efficiency, impacting financial performance. While the technical analysis suggests limited immediate upward momentum, the stock's low valuation and reasonable dividend yield provide a cushion, making it somewhat appealing for value-focused investors. However, the volatility in cash flows and operational challenges remain significant risks.

Zhengye International Holdings Co., Ltd. Business Overview & Revenue Model

Company Description

Zhengye International Holdings Company Limited, an investment holding company, manufactures and sells paper, paperboard, and paper-based packaging products in the People's Republic of China. It operates through two segments, Paper-Based Packaging and Corrugated Medium Paper. The company offers paper-based packaging products, including craft cartons, color printing cartons, honeycomb paper-based products, and corrugated medium paper, as well as watermark cartons and box boards. It is also involved in the printing of decorative packaging products; and provision of design, printing, logistics, and other services with integrated packaging solutions. In addition, the company engages in transportation activities. It serves manufacturers of home appliances, fast-moving consumer goods, and electronic products. Zhengye International Holdings Company Limited was founded in 1999 and is headquartered in Zhongshan, the People's Republic China.

How the Company Makes Money

Zhengye International Holdings generates revenue primarily through the sale of its packaging products to clients in various industries, notably food and beverage. The company’s revenue model relies on both direct sales and long-term contracts with significant clients, ensuring a steady income stream. Key revenue streams include the sale of customized packaging solutions, bulk orders, and ongoing supply agreements. Additionally, partnerships with major food and beverage manufacturers contribute to revenue stability and growth, as Zhengye often acts as a preferred supplier due to its focus on quality and customer service. The company may also benefit from expanding its market presence and investing in new technologies to enhance production efficiency and product offerings.

Zhengye International Holdings Co., Ltd. Financial Statement Overview

Summary

Zhengye International Holdings Co., Ltd. faces challenges in maintaining revenue growth and operational profitability. Despite a stable balance sheet with moderate leverage, the volatility in cash flows underscores potential issues in liquidity management. The company must address operational inefficiencies and enhance cash flow generation to improve its financial stability.

Income Statement

The company experienced a decline in revenue from 2021 to 2024, with a revenue drop of approximately 31.6% since 2021. Gross profit margins have decreased over time, from a high of 19% in 2019 to 12% in 2024. Net profit margin in 2024 showed improvement with a positive 1.5%, up from a negative margin in 2023. However, EBIT margins have been negative since 2023, indicating struggles in operational efficiency.

Balance Sheet

The debt-to-equity ratio is relatively stable, around 0.95 in 2024, indicating moderate leverage. The equity ratio is reasonably healthy at 39%, providing a cushion against liabilities. However, the consistent reduction in stockholders' equity from 2019 to 2024 suggests potential challenges in maintaining asset growth relative to liabilities.

Cash Flow

The cash flow statement reveals volatility, with operating cash flow dropping to zero in 2024 from positive figures in previous years. Free cash flow has been inconsistent, with a significant decline in 2024. The lack of positive free cash flow growth and operating cash flow to net income ratio raises concerns about the company's cash generation capabilities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.41B	2.44B	2.39B	3.01B	3.56B	2.49B
Gross Profit	233.70M	293.88M	270.00M	341.73M	676.97M	390.87M
EBITDA	51.68M	92.34M	156.94M	263.18M	416.39M	225.89M
Net Income	23.69M	36.39M	-17.55M	47.17M	160.84M	54.77M
Balance Sheet
Total Assets	3.00B	2.88B	2.99B	2.98B	3.03B	2.68B
Cash, Cash Equivalents and Short-Term Investments	198.23M	187.38M	253.91M	279.84M	229.58M	185.37M
Total Debt	1.21B	1.06B	1.05B	1.09B	1.24B	1.16B
Total Liabilities	1.59B	1.47B	1.62B	1.58B	1.65B	1.49B
Stockholders Equity	1.12B	1.12B	1.09B	1.11B	1.11B	965.68M
Cash Flow
Free Cash Flow	-349.56M	-648.55M	-249.50M	-36.21M	-431.27M	-366.57M
Operating Cash Flow	-116.02M	-417.90M	-120.77M	148.76M	-194.98M	-202.17M
Investing Cash Flow	-280.72M	-267.94M	-150.04M	-233.72M	-197.43M	-139.04M
Financing Cash Flow	370.71M	619.31M	244.89M	135.22M	436.63M	295.49M

Zhengye International Holdings Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.37
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3363, the sentiment is Neutral. The current price of 0.37 is above the 20-day moving average (MA) of 0.37, below the 50-day MA of 0.38, and below the 200-day MA of 0.39, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 43.13 is Neutral, neither overbought nor oversold. The STOCH value of 63.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:3363.

Zhengye International Holdings Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2002	64 Neutral	HK$1.78B	9.49	3.56%	2.96%	-5.66%	-56.96%
2314	62 Neutral	$11.64B	8.54	4.88%	3.99%	1.95%	-9.10%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
2689	59 Neutral	$25.24B	13.26	3.81%	―	6.14%	134.18%
3363	58 Neutral	HK$185.00M	7.21	2.13%	5.95%	0.80%	81.27%
0731	50 Neutral	HK$297.07M	17.21	11.34%	―	-9.44%	―
1812	47 Neutral	HK$4.64B	―	―	―	-76.55%	-966.54%

Zhengye International Holdings Co., Ltd. Corporate Events

Zhengye International Forms Nomination Committee to Boost Governance

Zhengye International Holdings Company Limited has announced the establishment of a Nomination Committee within its Board of Directors. This committee, formed as per a resolution passed on March 4, 2011, is tasked with overseeing the appointment and removal of its members, who are selected from the Board and must include at least one member of a different gender, with a majority being independent non-executive directors. The formation of this committee is a strategic move to enhance corporate governance and ensure diverse and independent oversight within the company’s leadership structure.

Zhengye International Announces Property Sale for RMB16.9 Million

Zhengye International Holdings Co., Ltd. announced a discloseable transaction involving the sale of a property by its wholly-owned subsidiary, Zhongshan Yongfa Zhizao Company Limited, to Zhongshan Wanshunda Electronics Co., Ltd. for RMB16,888,893. The transaction is classified as a discloseable transaction under the Hong Kong Stock Exchange Listing Rules, requiring notification and announcement. The sale is expected to generate a gross profit of approximately RMB2,121,000 for the company, reflecting a strategic move to optimize its asset portfolio.

Zhengye International Holdings Enhances Nomination Committee

Zhengye International Holdings Co., Ltd. has announced a change in the composition of its Nomination Committee, effective from September 5, 2025, with the appointment of Ms. Chen Wei as a member. This change aligns with recent amendments to the Listing Rules and Corporate Governance Code, aiming to enhance the board’s effectiveness and diversity, thereby strengthening corporate governance practices.

Zhengye International Holdings Announces Board Composition and Roles

Zhengye International Holdings Co., Ltd. has announced the composition of its board of directors and the roles each member plays within the company’s various committees. The board includes executive directors, non-executive directors, and independent non-executive directors, each contributing to committees such as Audit, Nomination, Remuneration, Risk Management, and Budget Management. This announcement provides clarity on the governance structure of the company, which could impact its strategic decision-making and operational efficiency.

Zhengye International Reports Decline in Interim Results for 2025

Zhengye International Holdings Co., Ltd. reported its unaudited consolidated interim results for the six months ending June 30, 2025, showing a decline in revenue and profitability compared to the same period in 2024. The company’s revenue decreased slightly to RMB 1,137,332,000, and its gross profit margin fell from 14.08% to 9.09%. Profit attributable to the owners of the company dropped significantly to RMB 2,325,000 from RMB 15,026,000, indicating challenges in maintaining profitability amid rising costs and expenses.

Zhengye International Issues Profit Warning Amid Industry Challenges

Zhengye International Holdings Co., Ltd. has issued a profit warning, anticipating a significant decline in profit for the first half of 2025 compared to the same period in 2024. The decrease is attributed to challenges such as uncertain trading policies, weak domestic consumption, and intensified competition due to overcapacity in the industry. Despite a 10% increase in sales volume for its paper manufacturing segment, the company faced a drop in unit selling prices and an increase in raw material costs, leading to a reduced gross profit margin. The company has responded by optimizing management and controlling costs, resulting in a slight decline in expenditures.

Zhengye International Schedules Board Meeting for Interim Results and Dividend Decision

Zhengye International Holdings Co., Ltd. has announced a board meeting scheduled for August 22, 2025, to review and approve the unaudited interim results for the first half of 2025. The meeting will also consider the possibility of declaring an interim dividend, which could impact shareholder returns and reflect the company’s financial health.