Zuoli Kechuang Micro-finance Co. Ltd. Class H (6866) AI Stock Analysis

• Market Cap: HK$330.40M
• Dividend Yield: 5%
• Average Volume (3M): 138.13K
• Price to Earnings (P/E): 7.8
• Beta (1Y): 0.19
• Revenue Growth: -21.32%
• EPS Growth: -63.98%
• Country: HK
• Employees: 77
• Sector: Financial
• Sector Strength: 81
• Industry: Financial - Credit Services
• EPS (TTM): 0.04
• Shares Outstanding: 300,000,000
• 10 Day Avg. Volume: 292,000
• 30 Day Avg. Volume: 138,133
• PEG Ratio: -0.17
• Price to Book (P/B): 0.16
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -56.84
• 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: 68 Neutral
• Price Target: ―

Zuoli Kechuang Micro-finance Co. Ltd. has a solid financial foundation due to its strong balance sheet and attractive valuation metrics. However, declining revenues, profitability concerns, and cash flow volatility pose significant risks. Technical indicators show mixed signals, suggesting cautious optimism in the short term.

Zuoli Kechuang Micro-finance Co. Ltd. Class H Business Overview & Revenue Model

Company Description

Zuoli Kechuang Micro-finance Company Limited operates as a microfinance company in the People's Republic of China. The company offers unsecured, guaranteed, collateralized, and pledged loans; enterprise loans, including agriculture loans and technology enterprises credit loans, as well as loans for other small and medium-sized enterprises and microenterprises; individual business, start-up, and other loans; and Internet micro-loans. The company was formerly known as Deqing Zuoli Kechuang Micro-finance Company Limited and changed its name to Zuoli Kechuang Micro-Finance Company Limited in April 2014. Zuoli Kechuang Micro-finance Company Limited was founded in 2011 and is headquartered in Huzhou, the People's Republic of China.

How the Company Makes Money

Zuoli Kechuang Micro-finance Co. Ltd. makes money by earning interest on the loans it provides to its clients, which include small and medium-sized enterprises and individual entrepreneurs. The company charges interest on both secured and unsecured loans, with interest rates determined by the risk profile of the borrower and prevailing market conditions. Additionally, the company may earn revenue from loan-related fees, such as origination fees, processing fees, and late payment penalties. Zuoli Kechuang Micro-finance may also benefit from partnerships with banks or financial institutions for funding and risk-sharing purposes, which can enhance its lending capacity and reduce operational risks.

Zuoli Kechuang Micro-finance Co. Ltd. Class H Financial Statement Overview

Summary

Zuoli Kechuang Micro-finance Co. Ltd. shows a robust balance sheet with low leverage and high equity ratio, indicative of financial stability. However, the declining revenue and profitability margins signal potential challenges in maintaining growth and profitability. Cash flow volatility further underscores the need for a cautious approach in financial management.

Income Statement

The company's revenue has been declining over the past years, with a revenue growth rate of -36.55% from 2022 to 2023 and -36.53% from 2023 to 2024. The gross profit margin remains strong at 100%, indicating good cost control. However, the net profit margin decreased from 47.48% in 2023 to 50.44% in 2024. The EBIT margin remains healthy, though it declined from 76.89% in 2022 to 68% in 2024.

Balance Sheet

The company maintains a strong equity position with an equity ratio of 76.93% in 2024, showcasing a solid balance sheet with low leverage. The debt-to-equity ratio improved to 0.23 in 2024 from 0.31 in 2023, indicating reduced financial risk. Return on equity decreased slightly to 3.15% in 2024, reflecting a drop in profitability.

Cash Flow

Operating cash flow has been volatile, with a significant decline from 2023 to 2024. Free cash flow also decreased by 43.53% from 2023 to 2024. The operating cash flow to net income ratio is strong at 2.58 in 2024, but the free cash flow to net income ratio has dropped to 2.58, indicating potential cash flow challenges.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	123.77M	195.08M	208.27M	251.94M	263.65M
Gross Profit	123.77M	195.08M	208.27M	251.94M	263.65M
EBITDA	0.00	0.00	0.00	0.00	0.00
Net Income	62.44M	92.65M	93.34M	116.49M	110.24M
Balance Sheet
Total Assets	2.58B	2.66B	2.79B	2.65B	2.60B
Cash, Cash Equivalents and Short-Term Investments	10.52M	17.48M	16.59M	42.68M	78.23M
Total Debt	463.26M	596.46M	761.88M	649.97M	663.06M
Total Liabilities	537.41M	654.60M	761.88M	649.97M	663.06M
Stockholders Equity	1.98B	1.94B	1.90B	1.86B	1.75B
Cash Flow
Free Cash Flow	160.85M	284.92M	-5.50M	69.12M	142.81M
Operating Cash Flow	160.85M	284.95M	-5.46M	70.28M	148.84M
Investing Cash Flow	58.00K	96.00K	-26.00K	118.00K	-7.04M
Financing Cash Flow	-167.85M	-284.04M	-19.51M	-104.22M	-118.83M

Zuoli Kechuang Micro-finance Co. Ltd. Class H Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.27
• 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:6866, the sentiment is Negative. The current price of 0.27 is below the 20-day moving average (MA) of 0.28, below the 50-day MA of 0.28, and below the 200-day MA of 0.28, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 32.83 is Neutral, neither overbought nor oversold. The STOCH value of 36.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:6866.

Zuoli Kechuang Micro-finance Co. Ltd. Class H Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3311	79 Outperform	HK$61.70B	6.29	14.62%	4.88%	1.21%	2.15%
1818	70 Outperform	HK$70.07B	42.27	11.20%	0.26%	35.04%	102.30%
6866	68 Neutral	HK$330.40M	7.82	1.97%	5.00%	-21.32%	-63.98%
Sector *	67 Neutral	$16.89B	11.79	9.73%	3.75%	11.97%	-8.33%
1528	46 Neutral	HK$13.04B	―	-6.64%	2.39%	-35.35%	-14.20%
2012	40 Underperform	$163.62M	―	-155.60%	―	-46.94%	-89.98%
1813	40 Underperform	HK$1.06B	―	-95.62%	―	-31.29%	57.76%

Zuoli Kechuang Micro-finance Co. Ltd. Class H Corporate Events

Zuoli Kechuang Enhances Governance with New Nomination Committee

Zuoli Kechuang Micro-finance Co. Ltd. has established a Nomination Committee under its Board of Directors to regulate the appointment of management officers and optimize the board’s composition. This move aims to improve corporate governance by ensuring diversity and balance in the board’s talent and expertise, thereby potentially enhancing the company’s strategic development and operational efficiency.

Zuoli Kechuang Micro-finance Reports Decline in Q1 2025 Profits

Zuoli Kechuang Micro-finance Co. Ltd. announced its unaudited consolidated results for the first quarter of 2025, showing a decrease in net interest income and profit compared to the same period in 2024. The company’s profit before tax dropped significantly from RMB 53,830,000 to RMB 20,858,000, indicating challenges in maintaining profitability amid rising administrative expenses and lower other net income.

Zuoli Kechuang Micro-finance Announces 2024 AGM with Strategic Financial Resolutions

Zuoli Kechuang Micro-finance Co. Ltd. has announced its 2024 Annual General Meeting (AGM) scheduled for June 13, 2025, where key resolutions will be discussed and potentially approved. These include the approval of the company’s annual reports, financial statements, profit distribution plan, and external auditor’s fees. Additionally, the company seeks approval for a bank credit line up to RMB300 million and external guarantees up to RMB800 million. A special resolution will address the issuance of debt financing instruments up to RMB1 billion to supplement working capital, reflecting the company’s strategic financial planning and potential growth initiatives.

Zuoli Kechuang Updates Cash Dividend Details for 2024

Zuoli Kechuang Micro-finance Co. Ltd. has announced an update regarding its cash dividend for the financial year ending December 31, 2024. The final ordinary dividend declared is RMB 0.0127 per share, with key dates including an ex-dividend date of June 27, 2025, and a payment date of August 29, 2025. This announcement reflects the company’s commitment to returning value to its shareholders and maintaining transparency in its financial operations.

Zuoli Kechuang Announces New Share Charge Arrangement

Zuoli Kechuang Micro-finance Company Limited announced the release of a previous share charge and the establishment of a new share charge involving 322,540,960 domestic shares, representing 27.33% of the company’s total issued share capital. This new share charge, held by substantial shareholder Deqing Puhua Energy Company Limited in favor of Zhegu (Hangzhou) Corporate Management Company Limited, is not intended to secure the company’s debts or obligations, indicating a strategic financial maneuver that may impact stakeholder interests and the company’s market positioning.

Zuoli Kechuang Proposes Amendments to Enhance Governance

Zuoli Kechuang Micro-finance Co. Ltd. has announced proposed amendments to its Articles of Association in response to changes in the Company Law and other regulatory guidelines in China. These amendments aim to enhance corporate governance and require approval from shareholders at the upcoming annual general meeting, as well as necessary approvals from relevant authorities.

Zuoli Kechuang Schedules Board Meeting to Review Q1 Results

Zuoli Kechuang Micro-finance Co. Ltd. has announced a board meeting scheduled for April 25, 2025, to review and approve the unaudited consolidated first quarterly results for the period ending March 31, 2025. This meeting is crucial for the company as it will provide insights into its financial performance and strategic direction, potentially impacting its market positioning and stakeholder confidence.

Zuoli Kechuang Micro-finance Updates Dividend Payment Date

Zuoli Kechuang Micro-finance Co. Ltd. has announced an update to its cash dividend declaration for the financial year ending December 31, 2024. The company declared a final ordinary dividend of RMB 0.0127 per share, with the payment date set for August 29, 2025. This announcement may impact the company’s financial planning and investor relations as it reflects the company’s commitment to returning value to shareholders.

Zuoli Kechuang Announces 2024 Final Dividend

Zuoli Kechuang Micro-finance Co. Ltd. has announced a final ordinary cash dividend of RMB 0.0127 per share for the financial year ending December 31, 2024. This announcement reflects the company’s financial performance and commitment to returning value to its shareholders, potentially impacting its market positioning and stakeholder relations.

Zuoli Kechuang Micro-finance Reports 2024 Annual Results with Decreased Profit

Zuoli Kechuang Micro-finance Co. Ltd. announced its audited annual results for the year ending December 31, 2024, showing a decrease in net interest income and profit compared to the previous year. The company’s total assets slightly decreased, while net assets increased, indicating a stronger equity position. The results reflect challenges in maintaining interest income and managing expenses, impacting overall profitability.