Zhejiang Changan Renheng Technology Co., Ltd. Class H (8139) AI Stock Analysis

• Market Cap: HK$87.36M
• Dividend Yield: N/A
• Average Volume (3M): 9.08K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.25
• Revenue Growth: 13.37%
• EPS Growth: -516.34%
• Country: HK
• Employees: 229
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): N/A
• Shares Outstanding: 38,400,000
• 10 Day Avg. Volume: 7,050
• 30 Day Avg. Volume: 9,083
• PEG Ratio: -0.93
• Price to Book (P/B): 0.45
• Price to Sales (P/S): 0.27
• P/FCF Ratio: -2.07
• 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: 56 Neutral
• Price Target: HK$1.50 ▼(-5.66% Downside)

The overall stock score is primarily influenced by the company's solid revenue growth and strong gross profit margin. However, weak profitability, cash flow issues, and negative valuation metrics significantly impact the score. Technical indicators suggest a mixed outlook, with short-term upward trends but potential bearish momentum.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion and stability.

Gross Profit Margin

A strong gross profit margin reflects efficient production and cost control, which can sustain profitability even in competitive markets.

Market Position

Long-term contracts with major brands secure revenue streams and enhance market position, providing a competitive edge in the automotive sector.

Negative Factors

Net Profit Margin

A low net profit margin indicates difficulties in managing operational expenses, which can limit profitability and affect long-term financial health.

Cash Flow Issues

Negative free cash flow suggests liquidity challenges, potentially hindering the company's ability to invest in growth and manage debt.

Debt Levels

While manageable, high debt levels can strain financial flexibility, impacting the company's ability to navigate economic downturns or invest in new opportunities.

Zhejiang Changan Renheng Technology Co., Ltd. Class H Business Overview & Revenue Model

Company Description

Zhejiang Changan Renheng Technology Co., Ltd. is a technology-driven enterprise based in Zhejiang, China, specializing in the research, development, and manufacturing of advanced automotive components and systems. The company operates primarily in the automotive sector, focusing on the production of high-performance parts, including electronic control systems, automotive sensors, and integrated vehicle solutions. With a commitment to innovation and quality, Zhejiang Changan Renheng Technology aims to support the rapidly evolving needs of the automotive industry, particularly in smart and electric vehicle technologies.

How the Company Makes Money

Zhejiang Changan Renheng Technology Co., Ltd. generates revenue through multiple channels, primarily by manufacturing and selling automotive components to original equipment manufacturers (OEMs) and tier-one suppliers in the automotive industry. The company benefits from long-term contracts with prominent automotive brands, ensuring a steady flow of orders. Additionally, revenue is supplemented through the development of proprietary technologies and systems that can be licensed or sold to other companies in the industry. Strategic partnerships with automotive manufacturers and technology firms also enhance the company's market presence and create opportunities for joint ventures, further contributing to its earnings.

Zhejiang Changan Renheng Technology Co., Ltd. Class H Financial Statement Overview

Summary

The company has shown solid revenue growth and maintains a strong gross profit margin. However, profitability at the net income level is weak, and cash flow issues are apparent with negative free cash flow in 2024. The balance sheet shows moderate leverage, indicating some financial stability but also potential risks if debt levels increase.

Income Statement

The company has shown consistent revenue growth over the past few years, with a revenue increase of approximately 20.1% from 2023 to 2024. Gross profit margin is strong at around 41% for 2024, indicating effective cost management. However, net profit margin is low at approximately 0.65%, suggesting challenges in controlling expenses beyond costs of goods sold. EBIT and EBITDA margins are moderate, which reflects some operational efficiency but leaves room for profit improvement.

Balance Sheet

The company's debt-to-equity ratio is approximately 1.47 in 2024, indicating a reliance on debt but within a manageable range. The equity ratio is around 35%, suggesting moderate financial stability. Return on Equity (ROE) is low at approximately 1.07%, reflecting limited shareholder returns and potential inefficiencies in using equity to generate income.

Cash Flow

Operating cash flow has declined significantly, and free cash flow turned negative in 2024, indicating potential liquidity issues. The free cash flow to net income ratio is negative, further highlighting cash flow challenges. However, the operating cash flow to net income ratio is strong at approximately 6.18, indicating effective cash operations despite low profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	201.76M	194.86M	162.28M	150.82M	144.40M	112.72M
Gross Profit	79.42M	80.10M	65.36M	55.29M	60.04M	46.84M
EBITDA	20.90M	24.86M	24.02M	17.72M	25.88M	16.35M
Net Income	-4.54M	1.27M	2.30M	1.42M	7.43M	1.18M
Balance Sheet
Total Assets	345.34M	337.98M	292.85M	278.15M	248.60M	230.28M
Cash, Cash Equivalents and Short-Term Investments	27.77M	32.09M	19.95M	19.69M	21.63M	22.75M
Total Debt	186.06M	174.73M	111.50M	120.38M	93.56M	87.70M
Total Liabilities	229.65M	219.29M	175.42M	163.03M	134.89M	124.01M
Stockholders Equity	115.68M	118.69M	117.43M	115.13M	113.71M	106.27M
Cash Flow
Free Cash Flow	-16.76M	-25.81M	7.54M	-8.83M	-1.56M	162.08K
Operating Cash Flow	-3.92M	7.85M	35.08M	14.81M	12.83M	11.01M
Investing Cash Flow	-40.95M	-41.18M	-23.90M	-23.52M	-14.25M	-10.71M
Financing Cash Flow	37.17M	34.68M	-15.71M	19.82M	-115.04K	-2.31M

Zhejiang Changan Renheng Technology Co., Ltd. Class H Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.59
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:8139, the sentiment is Negative. The current price of 1.59 is above the 20-day moving average (MA) of 1.46, above the 50-day MA of 1.50, and above the 200-day MA of 1.45, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 41.55 is Neutral, neither overbought nor oversold. The STOCH value of 10.71 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:8139.

Zhejiang Changan Renheng Technology Co., Ltd. Class H Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
1702	59 Neutral	HK$906.58M	12.64	3.61%	2.47%	-8.51%	-68.34%
8139	56 Neutral	HK$87.36M	-10.99	-3.82%	―	13.37%	-516.34%
0609	54 Neutral	HK$1.26B	19.62	2.46%	3.47%	-5.29%	-32.47%
0827	46 Neutral	HK$203.81M	-0.29	-112.79%	―	-22.72%	-212.73%
0954	44 Neutral	HK$148.32M	-1.82	-13.04%	―	-17.15%	30.94%