Breaking Down Keshun Waterproof Technology Co.,Ltd. Financial Health: Key Insights for Investors

Facing a real-estate-driven slowdown, Keshun Waterproof Technology Co., Ltd. reported revenue of CNY 4.70 billion in the nine months to Sept 30, 2025 (down 8.4% YoY) and a trailing twelve-month revenue of CNY 6.40 billion (a 6.49% YoY decline), while 2024 full-year sales fell to CNY 6.83 billion (down 14.04%); profitability shows a mixed picture with a gross profit margin of 21.77% (down 4.67% YoY) and a sharply improved EBITDA of CNY 435.16 million (EBITDA margin 6.37%, up 1,175.05% YoY), yet net income slid to CNY 20.09 million for the nine months and the TTM net loss reached CNY 62.05 million (EPS -CNY 0.06), liquidity metrics like a current ratio of 1.39 and quick ratio of 1.26 sit alongside a debt-to-equity ratio of 1.34, enterprise-value multiples such as EV/EBITDA of 23.42 and EV/FCF of 9.23 imply a premium valuation against earnings, market cap is about CNY 5.78 billion (Dec 12, 2025), revenue per employee stands at CNY 1.71 million across 3,748 staff, and strategic moves - CNY 8 million investment in a 16,100-ton coatings line, expansion into high-value coatings, smart manufacturing, and state-owned enterprise partnerships - outline the growth levers investors will want to scrutinize further.

Keshun Waterproof Technology Co.,Ltd. (300737.SZ) - Revenue Analysis

• Primary driver of decline: weakness in the real estate sector reducing demand for waterproofing materials and related services.
• Operational scale: workforce of 3,748 employees with revenue per employee of CNY 1.71 million.
• Market valuation: market capitalization approximately CNY 5.78 billion as of December 12, 2025.

Keshun Waterproof Technology Co.,Ltd. (300737.SZ) - Profitability Metrics

• Gross profit margin (9M 2025): 21.77% (-4.67 pp YoY)
• EBITDA (9M 2025): CNY 435.16 million; EBITDA margin: 6.37% (YoY change: +1,175.05%)
• Operating income (9M 2025): CNY 34.12 million; operating margin: 0.50% (YoY change: +109.13%)
• Net income (9M 2025): CNY 20.09 million (down from CNY 126.21 million in 9M 2024)
• TTM net result: net loss of CNY 62.05 million; TTM EPS: -CNY 0.06

Keshun Waterproof Technology Co.,Ltd. (300737.SZ) - Debt vs. Equity Structure

• Debt-to-Equity Ratio: 1.34 - indicates higher reliance on debt financing; for every CNY 1 of equity, the company carries about CNY 1.34 of debt.
• Current Ratio: 1.39 - short-term assets cover short-term liabilities by 39% beyond the break-even point.
• Quick Ratio: 1.26 - excluding inventories, liquid assets still exceed current liabilities by 26%, reflecting conservative liquidity management.
• Interest Coverage Ratio: 1.74 - operating income covers interest expense 1.74 times, signaling limited cushion against earnings volatility.

• Enterprise Value to EBITDA (23.42): suggests investors are pricing growth or scarcity premium into the equity; higher than typical manufacturing peers, which often trade in mid-single-digit to low-teens EV/EBITDA ranges.
• Enterprise Value to Free Cash Flow (9.23): signals a less aggressive premium vs. EBITDA but still implies a notable multiple on cash generation, useful when assessing sustainability of debt service.

• With debt-to-equity at 1.34 and interest coverage at 1.74, Keshun's earnings would need to remain stable or grow to avoid tightening cash flow pressures from interest obligations.
• Current and quick ratios above 1.0 provide a buffer for short-term obligations, but reliance on inventory or receivables turnover can affect these ratios quickly.
• High EV/EBITDA requires either delivery on growth expectations or margin improvement to justify the premium; otherwise valuation risk rises.

Keshun Waterproof Technology Co.,Ltd. (300737.SZ) - Liquidity and Solvency

• Current ratio: 1.39 - indicates adequate short-term liquidity to cover current liabilities.
• Quick ratio: 1.26 - suggests sufficient immediate liquidity when excluding inventory.
• Interest coverage ratio: 1.74 - operating income covers interest expense by ~1.74×, a modest buffer.
• Debt-to-equity ratio: 1.34 - higher reliance on debt financing, implying elevated financial risk.
• EV/EBITDA: 23.42 - market values the company at a significant premium to operating earnings.
• EV/FCF: 9.23 - valuation relative to free cash flow is elevated but more moderate than EV/EBITDA.

• Operationally, maintaining a quick ratio >1.2 is positive for working capital resilience.
• Debt load (D/E 1.34) suggests sensitivity to interest rate moves and potential refinancing risk.
• Interest coverage near 1.7x highlights need to monitor EBITDA stability and interest expense trends.
• High EV/EBITDA (23.42) signals market expectations for future growth or lower risk premium; compare to sector peers for context.

Keshun Waterproof Technology Co.,Ltd. (300737.SZ) Valuation Analysis

• Market capitalization (12-Dec-2025): CNY 5.78 billion.
• Price-to-Sales (P/S): 0.90 - the stock trades below one times annual sales, implying market pricing at a discount to revenue.
• Price-to-Earnings (P/E): Not applicable due to a reported net loss.
• Forward P/E: 22.98 - based on projected positive earnings, reflecting investor expectations of profitability recovery.
• Enterprise Value / EBITDA (EV/EBITDA): 23.42 - suggests a premium relative to current operating earnings.
• Enterprise Value / Free Cash Flow (EV/FCF): 9.23 - valuation relative to free cash flow appears more attractive than EV/EBITDA.

• Implications for investors:
  • The P/S of 0.90 can attract value-seeking investors focused on revenue stability.
  • Negative trailing earnings make historical profitability a non-factor; forward P/E of 22.98 prices in recovery expectations.
  • High EV/EBITDA (23.42) signals limited margin for error on operating performance; EV/FCF (9.23) provides a counterbalance indicating stronger cash-generation valuation.

Keshun Waterproof Technology Co.,Ltd. (300737.SZ) - Risk Factors

• Demand sensitivity to real estate: a sustained slowdown in China's property market has driven lower orders for waterproofing materials, contributing to declining top-line figures.
• High leverage: debt-to-equity ratio of 1.34 increases refinancing, interest cost and covenant risk in a tighter credit environment.
• Profitability pressure: negative trailing‑twelve‑month (TTM) net income and EPS signal ongoing earnings weakness and limited buffer against shocks.
• Operating margin erosion: operating profit has trended downward from 2020 through 2023, reflecting margin compression and operational challenges.
• Valuation premium: an enterprise value to EBITDA (EV/EBITDA) of 23.42 implies market expectations for recovery - at risk if earnings do not rebound.
• Cash generation vs. valuation: enterprise value to free cash flow (EV/FCF) of 9.23 indicates the market prices the company at multiple of its available free cash flow; any further cash conversion decline would pressure valuation.

• Operational risks: raw material cost volatility and production underutilization can widen losses if demand remains weak.
• Liquidity and refinancing: with elevated leverage, a prolonged revenue decline may force asset sales, equity dilution or costly refinancing.
• Market sentiment risk: high EV/EBITDA means investor expectations are elevated; negative surprises in earnings or cash flow could trigger sharp multiple contraction.
• Counterparty and receivables risk: exposure to property developers with stretched balance sheets increases credit risk and potential collection delays.

Keshun Waterproof Technology Co.,Ltd. (300737.SZ) Growth Opportunities

• CapEx & capacity: CNY 8 million invested to establish an annual coatings production line with 16,100 tonnes capacity focused on high-value formulations.
• Product mix shift: Targeting polyurethane grouting materials, polyurea waterproof coatings, epoxy floor coatings and anticorrosive coatings to move up the value chain and improve gross margins.
• R&D & sustainability: Building R&D capabilities via an academician workstation and green, low-carbon formulation development to meet tighter environmental and client specifications.
• Smart manufacturing: Planning smart manufacturing bases to improve yield, reduce lead times and enable more coordinated supply-chain logistics.
• Channel and end-market expansion: Deepening channel networks and targeting industrial plants, data centers and new energy projects as high-growth end markets.
• Strategic partnerships: Strengthening relationships with state-owned enterprises for national infrastructure contracts and pursuing overseas expansion for diversified revenue streams.

• Revenue levers: incremental volumes from the new coatings line, ASP uplift from specialty coatings, and contract scale from SOE partnerships.
• Cost levers: process automation and smart plants aim to reduce unit manufacturing costs and improve working capital turns through better supply coordination.
• Execution risks: commercialization of new product lines, time-to-market of R&D outputs, and competitive pricing pressure in coated-product segments.