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

Curious how Jiangsu Zhengdan Chemical (300641.SZ) stacks up for investors? In the first half of 2025 the company posted revenue of CNY 1.43 billion (up 3.37% YoY) while full-year 2024 revenue surged to CNY 3.48 billion - a remarkable 126.31% jump from 2023; profitability has followed suit with 2024 net income of CNY 1.19 billion and a net profit margin near 34%, alongside a trailing ROE of 35.82% and an operating margin of 52.73%; market metrics show a market cap of CNY 9.54 billion, P/S and P/B multiples suggesting relative valuation, a trailing EPS of CNY 1.96 and a low trailing P/E in the ~9s, while the balance sheet is unusually liquid with total cash of CNY 1.86 billion, trivial reported debt (CNY 2.18 million) yielding a cash-to-debt ratio of 460.93, an outsized current ratio of 35.77 and an interest coverage ratio above 117,000, and operational cash flow of CNY 892 million TTM - yet investors should weigh these strengths alongside industry risks (regulation, commodity price swings, competition, FX and supply-chain exposure) and growth levers like eco-friendly product focus, international expansion, R&D and M&A as you dive into the full financial breakdown.

Jiangsu Zhengdan Chemical Industry Co., Ltd. (300641.SZ) - Revenue Analysis

• H1 2025 revenue: CNY 1.43 billion, up 3.37% year-on-year.
• TTM revenue (as of 2025-09-30): CNY 2.78 billion.
• Full-year 2024 revenue: CNY 3.48 billion, a 126.31% increase from 2023's CNY 1.54 billion.
• Revenue per employee: approx. CNY 6.27 million, indicating high productivity per staff member.
• Market capitalization (2025-12-10): CNY 9.54 billion; Price-to-Sales (P/S): 3.25.

• Implication of P/S 3.25: market values each yuan of sales at ~3.25 yuan of equity value-useful for peer comparisons and acquisition scenarios.
• Revenue per employee (CNY 6.27M): suggests capital- or margin-intensive operations with relatively high output per staff head.
• Large FY 2024 jump (126.31%) may reflect one-time factors, capacity additions, pricing changes or consolidation-important to reconcile with segment disclosures.

Jiangsu Zhengdan Chemical Industry Co., Ltd. (300641.SZ) - Profitability Metrics

• Net income (2024): CNY 1.19 billion (vs. CNY 9.88 million in 2023)
• Net profit margin (2024): ~34%
• Operating margin (TTM): 52.73%
• Return on equity (TTM): 35.82%
• Earnings per share (TTM): CNY 1.96
• Trailing P/E ratio: 9.30

• High operating margin (52.73%) indicates strong cost control and pricing power in core operations.
• ROE of 35.82% signals efficient use of shareholders' equity to generate profits.
• EPS of CNY 1.96 combined with a trailing P/E of 9.30 may suggest market undervaluation relative to earnings.
• Sharp net income increase year-over-year reflects either improved margins, higher volumes, one-off gains, or a combination-investors should review income statement detail and notes for drivers.

Jiangsu Zhengdan Chemical Industry Co., Ltd. (300641.SZ) - Debt vs. Equity Structure

• Total debt: CNY 2.18 million
• Total cash: CNY 1.86 billion
• Debt-to-equity ratio: 0.00 (near-zero leverage)
• Cash-to-debt ratio: 460.93 (ample coverage of debt)
• Book value per share: CNY 6.07

• Valuation context: EV/Revenue of 2.72 and EV/EBITDA of 5.68 suggest a moderate valuation relative to peers in chemicals, with EV/EBITDA indicating a potentially attractive earnings multiple given low leverage.
• Liquidity and solvency: A cash-to-debt ratio of 460.93 and CNY 1.86 billion in cash imply strong short-term solvency and capacity to fund operations, capex, dividends, or M&A without needing external debt.
• Balance sheet strength: Book value per share of CNY 6.07 provides a tangible net-asset baseline that investors can compare to market price when assessing downside protection.

Jiangsu Zhengdan Chemical Industry Co., Ltd. (300641.SZ) - Liquidity and Solvency

Key liquidity and solvency metrics for Jiangsu Zhengdan Chemical Industry Co., Ltd. (300641.SZ) indicate robust short-term coverage, exceptional interest-servicing capacity, and a strong net cash position that supports both operations and strategic flexibility.

• Current ratio: 35.77 - ample cushion to cover short-term liabilities with current assets.
• Quick ratio: 32.47 - indicates near-immediate liquidity even when inventories are excluded.
• Interest coverage ratio: 117,098.32 - effectively zero risk of interest-payment distress under current earnings.
• Operating cash flow (TTM): CNY 892 million - strong cash generation from core operations.
• Net cash position: CNY 1.86 billion - company holds more cash and equivalents than total debt.
• Effective tax rate: 14.50% - reflects the tax burden on pre-tax earnings.

Implications for stakeholders:

• Short-term creditors: extremely low default risk given current and quick ratios far above typical safety thresholds.
• Bondholders/lenders: minimal interest-risk due to exceptionally high interest coverage; debt service is well-supported by earnings.
• Shareholders: significant operating cash flow and a net cash position create capacity for reinvestment, dividends, or opportunistic M&A.
• Tax considerations: an effective tax rate of 14.50% should be monitored relative to jurisdictional and policy changes that could affect net margins.

For broader context on company background and how these financial strengths relate to business model and ownership, see: Jiangsu Zhengdan Chemical Industry Co., Ltd.: History, Ownership, Mission, How It Works & Makes Money

Jiangsu Zhengdan Chemical Industry Co., Ltd. (300641.SZ) Valuation Analysis

Key valuation metrics for Jiangsu Zhengdan Chemical Industry Co., Ltd. as a snapshot for investors provide a mix of earnings, sales, book-value and cash-flow perspectives. These figures can help assess relative attractiveness versus peers and historical ranges.

• Trailing P/E: 9.82 - implies the stock is trading at under 10 times last 12 months' earnings.
• P/S: 3.63 - the market values each yuan of sales at 3.63 yuan of equity value.
• P/B: 3.19 - equity market value is ~3.19 times book value.
• EV/EBITDA: 6.61 - enterprise-level valuation relative to operating cash earnings.
• EV/FCF: 5.73 - enterprise value divided by free cash flow.
• Market capitalization (as of 2025-12-10): CNY 9.54 billion.

• Relative perspective: A P/E under 10 combined with EV/EBITDA ~6.6 and EV/FCF ~5.7 typically signals value-oriented pricing, but must be weighed against sector cyclicality, commodity pricing exposure, and balance sheet quality.
• Cross-checks investors should run:
  • Peer multiples in specialty/commodity chemicals
  • Historical multiples for 300641.SZ over 1-5 years
  • Cash flow trend and working capital seasonality

For ownership, institutional activity, and deeper investor signals see: Exploring Jiangsu Zhengdan Chemical Industry Co., Ltd. Investor Profile: Who's Buying and Why?

Jiangsu Zhengdan Chemical Industry Co., Ltd. (300641.SZ) - Risk Factors

Jiangsu Zhengdan Chemical Industry Co., Ltd. operates in a high‑risk, capital‑intensive segment of the chemicals sector. Below are the principal risk categories investors should weigh, with numerical context and scenario framing to show potential magnitude of impact.

• Regulatory and environmental compliance risk: chemical producers face stringent local and national emissions, wastewater and hazardous‑waste controls. In China, tighter environmental inspections since 2017 have led to temporary production curbs affecting up to 5-15% of regional capacity during peak enforcement periods.
• Raw material price volatility: feedstock costs typically represent a large portion of cost of goods sold for basic chemical producers - industry norms are often in the 40-60% range of COGS. Key feedstock price swings (for example, naphtha, caustic soda, or methanol) have historically moved ±20-60% over 12‑month cycles, materially compressing margins.
• Competitive pressure: the company competes with domestic peers and commodity producers abroad. Global low‑cost capacity additions (e.g., in the Middle East and Southeast Asia) can suppress realizations; spot price differentials of 10-30% versus domestic contract prices are common in oversupplied cycles.
• Demand cyclicality and macroeconomic sensitivity: demand for industrial chemicals is closely tied to manufacturing, construction, and exports. In economic downturns, volume declines of 10-30% year‑over‑year have occurred across chemical subsectors in severe recessions.
• Currency exposure: if exports or imported feedstocks are significant, RMB fluctuations against USD or other currencies can affect margins. A 5-10% movement in the exchange rate can change reported profitability materially when export share or imported cost is sizable.
• Supply‑chain disruptions: single‑source suppliers, logistics constraints, or port congestion can interrupt feedstock supply. Recent global events have caused lead‑time increases of 20-100% for certain bulk chemical deliveries in stressed periods.

To help investors quantify downside risk under plausible scenarios, consider the illustrative sensitivity table below (applies to a generic basic‑chemicals cost structure; adjust to company disclosures for precision):

• Balance‑sheet and liquidity risk: chemical firms often carry working‑capital intensity due to inventories and receivables. Industry working capital days commonly range 40-90 days; higher days can stress cash flow if margins compress.
• Counterparty and concentration risk: reliance on a small number of large customers or a limited supplier base increases exposure. If top 5 customers account for >30-50% of revenue, loss or renegotiation of contracts can cause outsized revenue swings.
• Operational risk: plants producing hazardous materials face shutdown, safety incident, or maintenance risk. A single major plant outage can reduce company output by 10-40% depending on asset footprint.

Investors should cross‑check these risk vectors against the company's latest disclosures (annual report, interim results, environmental and safety statements) and monitor macro indicators such as feedstock price trends, RMB exchange rates, and regional regulatory activity. For additional investor‑focused context, see: Exploring Jiangsu Zhengdan Chemical Industry Co., Ltd. Investor Profile: Who's Buying and Why?

Jiangsu Zhengdan Chemical Industry Co., Ltd. (300641.SZ) - Growth Opportunities

• Alignment with sustainability: demand for low-VOC, biodegradable and low-emission chemical inputs is rising across coatings, adhesives, and agrochemical intermediates.
• Product development: launching higher-margin specialty intermediates and formulation additives can capture customers moving away from commodity suppliers.
• Geographic expansion: targeted entry into Southeast Asia, Europe, and North America can increase revenue diversification and improve pricing power.
• Strategic M&A and partnerships: bolt-on acquisitions or JV partnerships for distribution and technology access can accelerate scale.
• Operational improvement: process optimization, energy efficiency and feedstock sourcing improvements will enhance margins and cash flow.

• Increase R&D intensity: target R&D-to-revenue of 3-4% within three years to accelerate specialty pipeline.
• Focus on green product certifications (REACH, EPA equivalents, ISO 14001) to unlock institutional buyers in Europe and North America.
• Build selective overseas distribution hubs to reduce logistics cost and lead time for export customers.
• Pursue small-to-mid cap acquisitions that provide either tech IP or immediate access to regional customers.
• Invest in process electrification and waste-minimization to lower operating costs and improve ESG ratings.