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

Jiangsu Huachang Chemical's latest numbers raise pressing questions for investors: operating revenue slipped to 7.93 billion yuan in 2024 (down 3.46% year-on-year) while net profit attributable to shareholders fell to 521 million yuan (a 28.55% drop), and basic EPS declined to 0.5475 yuan; the first half of 2025 shows further pressure with revenue of 3.21666 billion yuan versus 4.23394 billion a year earlier and net income collapsing to 10.92 million yuan from 451.12 million-yet the balance sheet signals resilience with total cash of 510.84 million yuan and a net cash position as debt (81.35 million yuan in Q1 2025) remains modest; profitability metrics tell a similar story-net margin eased to 6.6% in 2024 (from 9.2% in 2023) as ROE fell to 5.19%-while valuation and shareholder returns show a P/E of 21.2x, P/S of 0.8x and an intrinsic value estimated ~34% above the market price, leaving readers to weigh declining earnings (an average annual decrease of 14.7%) against conservative leverage, solid cash generation (operating cash flow of 497.22 million yuan in Q1 2025) and growth bets such as over 500 million yuan in R&D and expanding exports to 30+ countries-read on for a line-by-line breakdown and what these trade-offs mean for investment strategy.

Jiangsu Huachang Chemical Co., Ltd. (002274.SZ) - Revenue Analysis

Jiangsu Huachang Chemical reported operating revenue of 7.93 billion yuan in 2024, a 3.46% decline versus the prior year. Net profit attributable to shareholders fell to 521 million yuan (‑28.55% year‑on‑year), and basic earnings per share were 0.5475 yuan (‑28.54%). The company declared a cash dividend of 3.00 yuan for every 10 shares (0.30 yuan per share), with no bonus shares.

• 2024 operating revenue: 7.93 billion yuan (‑3.46% vs. 2023)
• 2024 net profit attributable to shareholders: 521 million yuan (‑28.55% vs. 2023)
• Basic EPS (2024): 0.5475 yuan (‑28.54% vs. 2023)
• Dividend (2024): 3.00 yuan per 10 shares; no bonus shares

Key short‑term dynamics and investor considerations:

• Revenue trajectory: full‑year 2024 down modestly (‑3.46%); H1 2025 shows a sharper contraction versus H1 2024 (3.21666 bn vs 4.23394 bn).
• Profitability squeeze: net income and EPS declined substantially in 2024 and collapsed in H1 2025 (10.92 million vs 451.12 million), indicating margin pressure or one‑off impacts.
• Shareholder returns: cash dividend remains material at 0.30 yuan/share despite earnings decline, signaling commitment to returns but reducing retained earnings flexibility.
• Scale and recovery outlook: compare H1 run‑rate to 2024 full‑year base to assess whether H2 recovery is required to reach prior profitability levels.

For context on strategic positioning and governance that may affect revenue recovery and capital allocation, see: Mission Statement, Vision, & Core Values (2026) of Jiangsu Huachang Chemical Co., Ltd.

Jiangsu Huachang Chemical Co., Ltd. (002274.SZ) - Profitability Metrics

Key profitability indicators for Jiangsu Huachang Chemical Co., Ltd. show a clear weakening in 2024 versus 2023 across margins, returns and earnings per share, outpacing the broader Chemicals industry's deterioration.

• Net profit margin: 2024 ≈ 6.6% (2023: 9.2%).
• Return on equity (ROE): 2024 = 5.19% (2023: 7.5%).
• Gross profit margin: 2024 = 10.10% (2023: 12.5%).
• Operating margin: 2024 = 0.53% (2023: 1.2%).
• Earnings per share (EPS): 2024 = ¥0.32 (2023: ¥0.45).
• Earnings trend: company earnings declining at an average annual rate of -14.7% vs Chemicals industry decline of -3.7% annually.

• Margin compression: gross margin fell ~2.4 percentage points, indicating rising input costs or pricing pressure relative to sales.
• Profitability squeeze to operating level: operating margin dropped to near-breakeven (0.53%), narrowing the buffer for non-operating expenses and shocks.
• ROE decline: lower net income coupled with likely steady equity base reduces shareholder returns to ~5.19%.
• Earnings trajectory: EPS down to ¥0.32 and an average earnings decline of -14.7% annually signals cyclical or structural issues vs the industry average decline of -3.7%.

Related investor context: Exploring Jiangsu Huachang Chemical Co., Ltd. Investor Profile: Who's Buying and Why?

Jiangsu Huachang Chemical Co., Ltd. (002274.SZ) - Debt vs. Equity Structure

• Total debt (Q1 2025): ¥81.35 million.
• Total cash (Q1 2025): ¥510.84 million - cash holdings exceed total debt, indicating a net cash position.
• Reported debt-to-equity ratio (times): 1.40.
• Reported debt-to-equity (as a percent) cited: 1.8%, reflecting a very low level of financial leverage in another presentation of metrics.
• Capital expenditures ≈ 35% of operating cash flow, supporting ongoing operations while preserving financial flexibility.

• Liquidity profile: large cash buffer (¥510.84m) versus modest debt (¥81.35m) yields a net cash cushion of ¥429.49m, supporting near-term obligations and optional strategic spending.
• Leverage interpretation: the 1.40x metric implies moderate leverage if taken as debt-to-equity (times), while the 1.8% presentation signals very low leverage - investors should confirm which convention the company uses in disclosures.
• Cash use: with CapEx at ~35% of operating cash flow, the company is investing in operations while maintaining flexibility due to its net cash position.

Jiangsu Huachang Chemical Co., Ltd. (002274.SZ) - Liquidity and Solvency

• Current ratio (Q1 2025): 119.80% (1.198x), indicating adequate short-term liquidity to cover current liabilities.
• Net cash position: cash holdings exceed total debt, providing a buffer against short-term and cyclical shocks.
• Operating cash flow (Q1 2025): ¥497.22 million, showing strong cash generation from operations.
• Debt-to-equity ratio: 1.8%, reflecting very low financial leverage and conservative balance-sheet risk.
• Capital expenditures: ~35% of operating cash flow (≈ ¥174.03 million), supporting operations while preserving flexibility.

• Implications for investors: low leverage and a positive net cash stance reduce default risk and increase strategic flexibility.
• Cash-flow dynamics: with OCF at ¥497.22M and capex ~¥174.03M, free cash flow before working-capital changes remains healthy.
• Monitoring points: sustainment of OCF, any material increase in leverage, and capex scale relative to cash generation.

Jiangsu Huachang Chemical Co., Ltd. (002274.SZ) - Valuation Analysis

• Market valuation snapshot: P/E = 21.2x, P/S = 0.8x, Beta = 1.08.
• Dividend metrics: Forward yield = 0.18% (payout ratio 93%); Trailing yield = 0.04% (payout ratio 93%).
• Estimated intrinsic upside: Intrinsic value ~34% above current market price.

• Valuation drivers to monitor:
  • EPS trajectory-P/E at 21.2x implies reliance on sustained earnings.
  • Revenue growth-low P/S suggests upside if sales accelerate.
  • Dividend sustainability-93% payout ratio requires stable cash flow to maintain payouts.
  • Market risk-beta ~1.08 signals modest correlation with broader market swings.
• Actionable reference: Jiangsu Huachang Chemical Co., Ltd.: History, Ownership, Mission, How It Works & Makes Money

Jiangsu Huachang Chemical Co., Ltd. (002274.SZ) - Risk Factors

• Earnings trajectory: the company reports a 14.7% average annual decrease in earnings, materially worse than the Chemicals industry average decline of 3.7%.
• Profitability pressure: net profit margin fell from 9.2% (2023) to 6.6% (2024), signaling compression in pricing, margins, or higher costs.
• Return generation: ROE dropped from 7.5% (2023) to 5.19% (2024), indicating lower efficiency in converting equity into net income.
• Leverage profile: a debt-to-equity ratio of 1.8% implies very low financial leverage, which reduces bankruptcy risk but may constrain capital-intensive growth opportunities.
• Cash flow and capex: capital expenditures consume ~35% of operating cash flow, tightening free cash flow and limiting discretionary spending or debt reduction.
• Market volatility: a beta of 1.08 denotes moderate sensitivity to market swings-returns may slightly amplify market moves.

• Investor implications: declining earnings and margins increase sensitivity to demand shocks and raw material cost increases; lower ROE pressures valuation multiples.
• Capital strategy tension: low leverage preserves balance sheet resiliency but may force reliance on internal cash or equity to fund growth; capex consuming 35% of operating cash flow limits buybacks/dividends unless cash generation improves.
• Risk management: moderate beta suggests market risk is meaningful; combined with profit compression, this can produce larger drawdowns during market downturns.

Jiangsu Huachang Chemical Co., Ltd. (002274.SZ) - Growth Opportunities

Jiangsu Huachang Chemical Co., Ltd. (002274.SZ) is positioning itself for multi-dimensional growth through R&D investment, international expansion, sustainability targets and new project wins. Key vectors that investors should monitor include:

• R&D and green chemistry focus: over 500 million yuan invested in R&D over the last three years, prioritizing low‑emission processes and product innovations.
• Export expansion and international competitiveness: products exported to more than 30 countries with a significant presence in Europe and North America; exports accounted for 40% of total sales in 2022.
• Sustainability commitments: target of carbon neutrality by 2030 and increasing renewable energy share in operations to 50% within five years.
• Project pipeline and revenue diversification: awarded licensing and equipment supply contracts for a urea melt plant in China, indicating potential growth in the fertiliser/urea segment.
• Community and ESG investment: approximately 10 million yuan contributed annually to local environmental projects and educational programs, reinforcing stakeholder relations and license to operate.

Drivers for near‑ and medium‑term growth include continued commercialization of green chemistry R&D, scaling export channels in established markets, execution of the urea plant contracts, and measurable progress toward renewables and carbon neutrality. For additional background on the company's origins and strategic positioning, see Jiangsu Huachang Chemical Co., Ltd.: History, Ownership, Mission, How It Works & Makes Money.