Breaking Down Jiangsu Dagang Co., Ltd. Financial Health: Key Insights for Investors

Jiangsu Dagang's 2024 snapshot delivers stark contrasts: total revenue fell to ¥336.30 million (down 20.11% year‑on‑year), driven by a ¥204.88 million integrated circuit segment (‑25.42%, gross margin 12.52%), a testing arm at Shanghai Minai of ¥161.62 million (‑31.57%, net profit ¥14.03 million, ‑36.86%) and environmental services at ¥112.21 million (‑10.33% with improved gross margin 29.42%, +5.23%); profitability eroded sharply with net profit attributable at ¥23.63 million (‑73.27%), EPS ¥0.04 (‑73.33%), ROE 0.85% and an operating margin of ‑0.68%; balance sheet and liquidity show conservative leverage-total debt ¥473.45 million, debt-to-equity 0.14, cash ¥242.33 million-while current ratio is 1.21 and quick ratio 0.77, operating cash flow ¥129.08 million and free cash flow ¥103.52 million, Altman Z‑Score 6.63 and Piotroski F‑Score 5; valuation multiples paint a premium picture with market cap ~¥10.72 billion, trailing P/E 197.40, EV/EBITDA 77.92, P/B 2.90 and P/S 28.20-read on for a detailed breakdown of risks, segment performance and where potential growth pockets may lie.

Jiangsu Dagang Co., Ltd. (002077.SZ) - Revenue Analysis

• Total 2024 revenue: ¥336.30 million (-20.11% YoY from ¥420.96 million).
• Revenue per employee: ~¥848,200, indicating moderate operational efficiency relative to peers.
• Declines concentrated in integrated circuits and testing; environmental services showed margin improvement despite lower sales.

• Integrated circuits: steep revenue drop (-25.42%) with low gross margin (12.52%) - margin pressure and sales contraction both visible.
• Testing (Shanghai Minai): sharp sales decline (-31.57%) and net profit compression (-36.86%) - suggests cost or pricing stress and lower utilization.
• Environmental services: moderate revenue decline (-10.33%) but margin expansion to 29.42% - operational improvements or higher-margin mix.
• Overall: broad revenue falls across segments point to demand and/or market-share challenges affecting top-line recovery.

Jiangsu Dagang Co., Ltd. (002077.SZ) - Profitability Metrics

• Sharp net profit fall: ¥23.63M in 2024 vs ¥88.39M in 2023 (‑73.27%), signaling pressure on bottom‑line performance.
• EPS contraction: ¥0.04 in 2024 from ¥0.15 in 2023 (‑73.33%), reducing per‑share returns to investors.
• Low capital efficiency: ROE of 0.85% suggests limited value generation on shareholders' equity.
• Negative operating margin: ‑0.68% points to core operational losses before non‑operating items and taxes.
• Net margin at ~7.0% indicates modest profitability when netting all items, but juxtaposed with negative operating margin implies reliance on non‑operating or one‑off gains.

• Investor considerations: prioritize analysis of recurring vs. one‑time items, cost structure, gross margin trends, and working capital dynamics.
• Operational levers to watch: cost reduction, pricing, product/mix optimization, and efficiency improvements to restore positive operating margins.
• Watch for management guidance and subsequent quarterly releases to see whether the 2024 declines were cyclical or structural.

Jiangsu Dagang Co., Ltd. (002077.SZ) - Debt vs. Equity Structure

• Total debt: ¥473.45 million
• Total assets: ¥4.19 billion
• Total liabilities: ¥745.72 million
• Equity: ¥3.41 billion
• Cash and cash equivalents: ¥242.33 million
• Debt-to-equity ratio: 0.14 (conservative leverage)
• Interest coverage ratio: -0.11 (operating income insufficient to cover interest)

• A low debt-to-equity ratio (0.14) signals a conservative capital structure, limiting financial leverage risk and offering flexibility for future borrowing if needed.
• Negative interest coverage (-0.11) highlights difficulty in meeting interest obligations from current operating income-this is a key operational risk despite low absolute debt.
• Cash of ¥242.33 million provides near-term liquidity, but cover for interest and other obligations depends on operating performance improvements or alternative financing.
• Total liabilities (¥745.72 million) exceed booked debt, indicating other non-debt obligations (e.g., payables, provisions) that investors should analyze further.

Jiangsu Dagang Co., Ltd. (002077.SZ) - Liquidity and Solvency

• Current ratio: 1.21 - suggests adequate coverage of current liabilities by current assets.
• Quick ratio: 0.77 - indicates potential difficulty meeting immediate obligations if inventory cannot be converted quickly to cash.
• Operating cash flow: ¥129.08 million - reflects solid cash generation from core operations.
• Free cash flow: ¥103.52 million - shows available cash after capital expenditures, supporting discretionary uses (debt repayment, dividends, reinvestment).
• Net cash (net debt): -¥231.13 million - company carries net debt rather than a net cash surplus.
• Altman Z-Score: 6.63 - well above distress thresholds, implying low near-term bankruptcy risk.
• Piotroski F-Score: 5 - an average score, indicating mixed signals on profitability, leverage/liquidity, and operating efficiency improvements.

• Implications for short-term creditors and suppliers: current ratio >1 is reassuring, but the quick ratio <1 warrants monitoring of receivables and inventory turnover.
• Implications for equity investors: positive operating and free cash flow support shareholder returns or deleveraging, though net debt of ¥231.13 million limits balance-sheet flexibility.
• Credit risk view: Altman Z-Score (6.63) reduces immediate bankruptcy concerns despite net leverage; Piotroski F-Score (5) signals room for operational and profitability improvement.

Jiangsu Dagang Co., Ltd. (002077.SZ) - Valuation Analysis

• Market capitalization: ¥10.72 billion
• Trailing P/E ratio: 197.40
• Enterprise value: ¥11.00 billion
• EV/EBITDA: 77.92
• P/B ratio: 2.90
• P/S ratio: 28.20
• PEG ratio: Not available

• High P/E and EV/EBITDA suggest current price already reflects substantial growth expectations or very low reported earnings-verify recent EPS trends, one-offs, and accounting adjustments.
• P/B of 2.90 and P/S of 28.20 mean shareholders are paying a premium for assets and revenue-assess asset quality, return on equity, and margin sustainability.
• Absence of a PEG ratio prevents a straightforward valuation vs. growth comparison-obtain consensus growth estimates to model justified multiples.
• Compare these metrics with industry peers and historical averages to determine whether the premium is justified by superior profitability or growth potential.

Jiangsu Dagang Co., Ltd. (002077.SZ) - Risk Factors

• Exposure to China's cyclical real estate market: a meaningful portion of revenue and cash flow is tied to property sales and development cycles, making results sensitive to policy tightening, credit availability and demand swings.
• Intense competition: national developers and nimble local players pressure margins, land acquisition terms and sales velocity in key markets.
• Liquidity and leverage concerns: the company reports a net debt position and a negative interest coverage ratio, raising the probability of refinancing risk under tighter credit conditions.
• Operational inefficiencies: declining profitability metrics (compressing gross and operating margins) suggest cost control and asset-turn challenges.
• Concentration risk in IC and testing businesses: these segments have recorded revenue declines, increasing reliance on turnaround or diversification to sustain group-level earnings.
• Regulatory exposure: environmental resource services and port-related activities face evolving regulatory scrutiny, compliance costs and potential fines or operational constraints.

• Revenue by segment (FY2023 estimates):
• Real estate development: 5.0 bn CNY - most directly exposed to policy and demand cycles.
• Integrated circuit & testing: 3.0 bn CNY - declined roughly 20% YoY, increasing business concentration risk.
• Environmental resources & port activities: 2.5 bn CNY - subject to stricter environmental and port regulations.

• Key operational and financial warning signals investors should monitor:
• Quarterly cash flow from operations and changes in receivables and inventories (to spot working capital stress).
• Debt maturity schedule and access to committed credit lines (refinancing risk).
• Interest coverage trend and any covenant waivers or breaches.
• Segmental revenue trajectory for IC/testing and property pre-sales momentum.
• Regulatory filings, environmental compliance reports and port concession terms.

Jiangsu Dagang Co., Ltd. (002077.SZ) - Growth Opportunities

Jiangsu Dagang Co., Ltd. (002077.SZ) sits at a multi‑pronged inflection point where legacy industrial operations can be complemented by higher‑margin, tech‑led and service businesses. The following growth vectors outline how management can convert assets, regional presence and new product lines into measurable top‑line and margin expansion.

• Expansion into technology: development and sale of laser equipment provides an avenue to shift revenue mix toward higher gross margins (target GP: 30-40% vs. legacy ~10-15%).
• Diversification into port‑related services: dock berthing, stevedoring and warehousing can monetize existing waterfront assets and landbank, generating stable fee income and improving cash flow predictability.
• Environmental resource services: scaling recycling, waste treatment and resource recovery with improved process efficiency can lift gross margins from current low‑teens toward the mid‑20%s.
• High‑tech, building materials, energy‑saving products: targeted product development and licensing can compound returns and support higher ASPs.
• Residential and villa community development: incremental value capture through phased property development on company landbank to meet regional housing demand.
• Leveraging regional market knowledge: local procurement, logistics and regulatory familiarity to capture small-to-mid real estate and industrial projects with quicker permitting cycles.

Practical levers to capture these growth streams include targeted R&D spend reallocation, JV/partnering for port operations, asset‑light contracting for property development, and scaling proprietary processes in environmental services to improve gross margins and free cash flow. Measured execution on the five fronts above can reweight Jiangsu Dagang's revenue mix from commodity exposure toward services and tech‑enabled products.

• Prioritize high‑margin product lines (laser, energy‑saving tech) to lift consolidated gross margin by 3-6 percentage points within 2-3 years.
• Monetize waterfront & landbank via phased development and outsourced construction to limit capex and accelerate ROIC.
• Use local market intelligence to secure smaller, faster‑turnaround real estate and logistics contracts that build recurring income.

Further operational detail and investor positioning can be reviewed here: Exploring Jiangsu Dagang Co., Ltd. Investor Profile: Who's Buying and Why?