China Weaving Materials Holdings Ltd. (3778) AI Stock Analysis

• Market Cap: HK$369.44M
• Dividend Yield: 4.55%
• Average Volume (3M): 987.30K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.37
• Revenue Growth: -1.24%
• EPS Growth: 5.98%
• Country: HK
• Employees: 2,410
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): -0.09
• Shares Outstanding: 125,234,990
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 987,301
• PEG Ratio: 0.83
• Price to Book (P/B): 0.80
• Price to Sales (P/S): 0.42
• P/FCF Ratio: 7.10
• 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: 51 Neutral
• Price Target: HK$3.00 ▼(-6.25% Downside)

The score is driven primarily by improving cash generation and a relatively stable balance sheet, but is held back by ongoing losses and weak trend signals (below major moving averages with slightly negative MACD). A high dividend yield provides some support, though the negative P/E underscores profitability risk.

Positive Factors

Improved Cash Generation

A sustainable switch to positive operating and free cash flow strengthens the firm's ability to fund operations, service obligations, and reinvest without needing frequent external financing. Over 2-6 months this improves liquidity resilience and strategic flexibility amid textile cyclicality.

Manageable Leverage

Moderate leverage limits financial strain during sales volatility and leaves room to access additional debt if needed. This capital structure supports operational continuity and potential targeted investment over the medium term without excessive interest burden.

Recent Revenue and Margin Recovery

A meaningful revenue uptick combined with recovering operating margins suggests improving demand and operational fixes. If sustained, this trend can translate into higher cash conversion and set a foundation for returning to profitability over coming quarters.

Negative Factors

Persistent Net Losses

Continued net losses and negative ROE indicate the company still fails to generate shareholder returns from core operations. Over months this constrains ability to rebuild equity, limits investment capacity, and keeps dependence on cash generation or financing for growth.

Very Low Gross Margins

Sub-5% gross margins signal structural cost pressure or weak pricing power in core product lines. Unless cost structure or product mix improves, margin compression will restrain sustainable profitability and limit the benefit of revenue growth over the medium term.

Pressure on Equity Base

A declining equity ratio reflects erosion of the capital buffer and raises vulnerability to asset shocks or further losses. Over a 2-6 month horizon this can reduce financial flexibility and increase reliance on external funding if operational performance slips.

China Weaving Materials Holdings Ltd. Business Overview & Revenue Model

Company Description

China Weaving Materials Holdings Limited, an investment holding company, engages in the manufacturing and trading of yarn products and staple fibers in the People's Republic of China. It operates through two segments, Yarns and Staple Fibres. The company offers cotton, polyester, polyester-cotton and viscose-cotton blended, viscose, and mélange and mélange-cotton blended yarns, as well as polyester staple fibers. China Weaving Materials Holdings Limited was incorporated in 2011 and is headquartered in Yichun, the People's Republic of China.

How the Company Makes Money

China Weaving Materials Holdings Ltd. generates revenue primarily through the sale of its weaving materials, including yarns and fabrics. The company maintains multiple revenue streams by engaging in both wholesale distribution and direct sales to manufacturers and retailers. Additionally, it may benefit from strategic partnerships with textile manufacturers and brands, enhancing its market presence and enabling bulk orders. The company's focus on high-quality production and sustainable practices also attracts clients looking for eco-friendly options, further contributing to its earnings.

China Weaving Materials Holdings Ltd. Financial Statement Overview

Summary

Cash flow has improved meaningfully with a swing to positive operating and free cash flow in 2024, but profitability remains weak with negative net margins and negative ROE despite some recovery in EBIT/EBITDA metrics.

Income Statement

The company has experienced volatile revenue changes with recent growth of 15.83% from 2023 to 2024. Gross profit margins have been low, with a slight improvement to 3.29% in 2024 from 1.02% in 2023, indicating ongoing challenges in cost management. The net profit margin remains negative, reflecting persistent losses, though there is a narrowing of losses. EBIT and EBITDA margins have seen some recovery, which suggests some operational improvements, but overall profitability remains weak.

Balance Sheet

The company maintains a moderate Debt-to-Equity ratio of 0.61 in 2024, indicating manageable leverage levels. However, the equity ratio has slightly decreased to 48.42%, showing pressure on equity relative to total assets. Return on Equity remains negative due to net losses, reflecting profitability challenges. The balance sheet indicates some stability, but profitability issues persist.

Cash Flow

The company has shown significant improvement in cash flow, with a positive swing in operating and free cash flow in 2024, indicating better cash generation capability. The Operating Cash Flow to Net Income ratio is strong, suggesting effective cash management despite net losses. The Free Cash Flow to Net Income ratio also supports the improvement in cash flows, highlighting a better cash position relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.22B	1.28B	1.11B	1.32B	1.64B	1.42B
Gross Profit	49.24M	42.20M	11.26M	58.10M	303.18M	143.16M
EBITDA	89.29M	79.75M	54.45M	43.01M	311.21M	170.05M
Net Income	-18.79M	-11.74M	-26.52M	-12.56M	202.54M	62.75M
Balance Sheet
Total Assets	1.38B	1.40B	1.50B	1.60B	1.69B	1.51B
Cash, Cash Equivalents and Short-Term Investments	195.14M	213.71M	190.07M	263.40M	283.03M	184.61M
Total Debt	372.56M	412.73M	476.16M	515.16M	553.24M	508.93M
Total Liabilities	713.03M	721.18M	811.51M	880.25M	908.37M	879.32M
Stockholders Equity	666.70M	676.79M	688.53M	715.06M	781.19M	631.90M
Cash Flow
Free Cash Flow	122.08M	76.21M	-96.71M	114.14M	66.75M	82.23M
Operating Cash Flow	126.38M	80.47M	-80.11M	202.63M	121.26M	96.05M
Investing Cash Flow	-17.85M	1.99M	45.71M	-129.43M	-15.00M	-69.57M
Financing Cash Flow	-92.48M	-63.43M	-38.93M	-92.84M	-7.83M	22.54M

China Weaving Materials Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3778, the sentiment is Negative. The current price of 3.2 is above the 20-day moving average (MA) of 3.09, above the 50-day MA of 3.15, and below the 200-day MA of 3.30, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 41.19 is Neutral, neither overbought nor oversold. The STOCH value of 48.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:3778.

China Weaving Materials Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0608	63 Neutral	HK$455.37M	5.68	2.55%	2.33%	-4.07%	-26.53%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3778	51 Neutral	HK$369.44M	-18.22	-2.76%	4.55%	-1.24%	5.98%
3322	50 Neutral	HK$318.53M	-10.04	-2.35%	―	24.99%	89.24%
1906	46 Neutral	HK$838.54M	-32.58	-6.24%	―	5.88%	16.82%

China Weaving Materials Holdings Ltd. Corporate Events

China Weaving Materials Details Valuation Behind Disposal of Fengxin Industrial Land and Property

China Weaving Materials Holdings Limited has provided additional details on the disposal of eight parcels of land and related premises in the Fengxin Industrial Zone, explaining that the consideration was set after arm’s length negotiations and based principally on an independent valuation commissioned by the purchaser in December 2025. The land was valued at about RMB13.3 million using a market approach adjusted for the remaining land-use period of approximately 36.5 years, while the premises were valued at about RMB31.7 million using a cost approach, bringing the total appraised value to roughly RMB45.0 million, compared with an estimated net book value of around RMB41.0 million as of December 2025. The board views the valuation and terms as fair and reasonable and sees the transaction as an opportunity to realise the value of these assets in a location where transfers are constrained by the need for consent from the Fengxin Industrial Zone Management Committee, which limits the market for such properties and underscores the strategic nature of the disposal for the group and its shareholders.

The most recent analyst rating on (HK:3778) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on China Weaving Materials Holdings Ltd. stock, see the HK:3778 Stock Forecast page.

China Weaving Materials Enhances Production with New Equipment Purchase

China Weaving Materials Holdings Ltd. has announced a discloseable transaction involving the purchase of 12 Murata Vortex Spinning Machines for approximately USD 4.74 million. This acquisition aims to upgrade the company’s production facilities with advanced spindle-less spinning technology, which promises higher speed, better yarn quality, and reduced costs, thereby improving production efficiency and energy savings.

The most recent analyst rating on (HK:3778) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on China Weaving Materials Holdings Ltd. stock, see the HK:3778 Stock Forecast page.

China Weaving Materials Announces Share Consolidation and Board Lot Size Change

China Weaving Materials Holdings Limited announced the effective date for its share consolidation and change in board lot size, following approval from the Stock Exchange and shareholders. The share consolidation will take effect on November 11, 2025, reducing the board lot size from 4,000 existing shares to 2,000 consolidated shares, which may impact trading dynamics and shareholder value.

The most recent analyst rating on (HK:3778) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on China Weaving Materials Holdings Ltd. stock, see the HK:3778 Stock Forecast page.

China Weaving Materials Approves Share Consolidation at EGM

China Weaving Materials Holdings Ltd. announced the successful passage of a resolution at its extraordinary general meeting held on November 7, 2025. The resolution, which was approved unanimously by shareholders, involves a share consolidation, aimed at optimizing the company’s capital structure. This decision reflects the company’s strategic efforts to enhance its market positioning and operational efficiency.

The most recent analyst rating on (HK:3778) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on China Weaving Materials Holdings Ltd. stock, see the HK:3778 Stock Forecast page.