Breaking Down Jiangsu Etern Company Limited Financial Health: Key Insights for Investors

Curious whether Jiangsu Etern Company Limited (600105.SS) is a value trap or a hidden opportunity? The quarter to September 30, 2025 shows revenue of CNY 1.37 billion (+19.06% YoY) and TTM revenue of CNY 4.77 billion (+9.08% YoY) against a 2024 annual revenue of CNY 4.11 billion, while profitability paints a stark contrast-net profit margin just 0.77% (down 65.93% YoY) with EBITDA at CNY 83.84 million (-32.47% YoY) and an operating margin of 0.27%; the balance sheet shows total assets of CNY 9.33 billion, liabilities of CNY 5.75 billion and a debt-to-equity ratio of 1.02 alongside net debt/equity of 55.4% and a distressing debt-to-EBITDA of 22.60, liquidity metrics include a current ratio of 1.01, quick ratio 0.79 and cash & short-term investments of CNY 1.65 billion yet free cash flow for the quarter is -CNY 196.36 million; valuation multiples are rich-trailing P/E 87.61, forward P/E 80.48, P/S 4.47 and P/B 8.22-while market cap sits at CNY 21.32 billion and enterprise-value/EBITDA soars to 196.99, so if you're weighing the risks of tight margins, elevated leverage and negative free cash flow against 9.08% revenue growth and a CNY 21.32 billion market presence, read on to dive into the full breakdown.

Jiangsu Etern Company Limited (600105.SS) - Revenue Analysis

• Quarter ending Sep 30, 2025 revenue: CNY 1.37 billion (up 19.06% year-over-year).
• Trailing twelve months (TTM) revenue: CNY 4.77 billion (up 9.08% YoY).
• Full-year 2024 revenue: CNY 4.11 billion (down 5.38% vs. 2023).
• Revenue per employee: ~CNY 1.41 million based on 3,382 employees.
• Price-to-sales (P/S) ratio: 4.47; Market capitalization: CNY 21.32 billion.

• The double-digit quarterly growth (19.06%) signals accelerating demand or improved pricing/mix vs. the prior-year quarter.
• TTM growth of 9.08% suggests recovery from the 2024 revenue decline, but 2024's -5.38% drop highlights prior volatility.
• Revenue per employee (~CNY 1.41M) indicates operational productivity benchmarks for peer comparison.
• A P/S of 4.47 and CNY 21.32B market cap reflect the market pricing of future revenue growth expectations-useful when pairing with margins and profit metrics.

Jiangsu Etern Company Limited (600105.SS) - Profitability Metrics

For the quarter ending September 30, 2025, Jiangsu Etern Company Limited (600105.SS) shows constrained profitability across most primary metrics, reflecting pressure on margins and operating cash generation.

• Net profit margin: 0.77% (down 65.93% year-over-year)
• EBITDA: CNY 83.84 million (down 32.47% year-over-year)
• Operating margin: 0.27%
• Gross profit margin: 14.41%
• Return on assets (ROA): 1.22%
• Return on equity (ROE): 8.61%

Key implications:

• Low net profit and operating margins indicate limited pricing power or rising operating costs relative to revenue.
• EBITDA contraction of 32.47% suggests weaker core cash profitability before non-cash charges and financing.
• Gross margin of 14.41% shows some buffer above cost of goods sold but insufficient to support higher-level operating and net profitability.
• ROA at 1.22% signals modest asset efficiency; ROE at 8.61% points to moderate returns for shareholders but underperformance relative to typical market benchmarks.

For context on the company's strategic positioning and stated objectives, see Mission Statement, Vision, & Core Values (2026) of Jiangsu Etern Company Limited.

Jiangsu Etern Company Limited (600105.SS) - Debt vs. Equity Structure

As of September 30, 2025, Jiangsu Etern Company Limited (600105.SS) presents a capital structure characterized by substantial leverage and constrained cash-flow coverage. Key headline figures follow.

• Leverage position: A debt-to-equity ratio of 1.02 indicates liabilities slightly exceed shareholders' equity, implying a balanced but leveraged capital structure.
• Net debt reliance: Net debt-to-equity at 55.4% signals meaningful dependence on borrowings after cash holdings are considered.

• Cash-flow coverage concern: Operating cash flow covers only 5.1% of debt-related obligations (coverage ratio), suggesting operating cash generation is weak relative to outstanding liabilities.
• Debt servicing metrics: Debt-to-EBITDA of 22.60 is very high, implying multiple years of EBITDA would be needed to pay down debt - a red flag for creditors and equity holders.
• Free cash flow shortfall: Debt-to-free cash flow at -25.79 indicates negative free cash flow relative to debt, meaning the company is not producing free cash flow sufficient to reduce leverage.
• Interest coverage data: Available information is insufficient to determine whether EBIT comfortably covers interest expense; this is a material gap for assessing default risk.

For corporate positioning and strategic context, see: Mission Statement, Vision, & Core Values (2026) of Jiangsu Etern Company Limited.

Jiangsu Etern Company Limited (600105.SS) - Liquidity and Solvency

• Current ratio: 1.01 - just enough current assets to cover current liabilities.
• Quick ratio: 0.79 - below 1.0, indicating reliance on inventory to meet short-term obligations.
• Cash and short-term investments: CNY 1.65 billion - available liquid resources for near-term needs.
• Free cash flow (Q3 ending Sep 30, 2025): -CNY 196.36 million - negative after capex, signaling FCF strain for the quarter.
• Operating cash flow margin: 1,431.23% - unusually high relative to revenue, suggesting significant cash from operations in the period measured.
• Net change in cash (quarter): CNY 171.99 million - a 133.78% year-over-year increase, improving cash position versus prior-year quarter.

Jiangsu Etern Company Limited (600105.SS) - Valuation Analysis

• Trailing P/E: 87.61
• Forward P/E: 80.48
• P/B: 8.22
• Enterprise value / Revenue (EV/Rev): 6.64
• Enterprise value / EBITDA (EV/EBITDA): 196.99
• Enterprise value / Free cash flow (EV/FCF): -224.87

• High P/E and P/B suggest investors pay a premium for expected future profitability or strategic assets.
• Very large EV/EBITDA and negative EV/FCF point to either depressed operational earnings, one-off items, heavy non-cash charges, or a capital structure that elevates enterprise value relative to operating cash flow.
• Forward P/E slightly below trailing P/E implies modest expected improvement in reported earnings but still elevated relative to typical market norms.

Jiangsu Etern Company Limited (600105.SS) - Risk Factors

Investors evaluating Jiangsu Etern Company Limited (600105.SS) should weigh a set of measurable financial and market risks that point to constrained profitability, leverage pressure, and cash-generation challenges. Key quantitative indicators illustrate areas of vulnerability and should inform risk management and valuation judgments.

• Net profit margin: 0.77% - profit generated per revenue is very thin, signaling limited buffer against cost shocks or revenue declines.
• Operating margin: 0.27% - core operations produce minimal earnings before interest and tax, indicating low operational efficiency or pricing power.
• Debt-to-equity ratio: 1.02 - leverage slightly above parity, implying reliance on debt financing and elevated solvency risk if earnings weaken.
• Free cash flow: -CNY 196.36 million - negative FCF highlights liquidity pressure and potential need for external financing to fund operations or investments.
• Enterprise value / Free cash flow: -224.87 - a large negative ratio reflecting negative FCF and complicating valuation using FCF multiples.
• Beta: 0.35 - lower market volatility relative to the market, which can reduce upside during broad rallies but may also limit downside in downturns.

How these risks interplay for stakeholders:

• Profitability and margins: Low net and operating margins reduce internal capacity to service debt or absorb raw material and pricing volatility.
• Leverage and solvency: A debt-to-equity of ~1.02 increases interest and refinancing risk; sustained negative free cash flow can exacerbate solvency stress.
• Cash generation and valuation: Negative FCF and an extreme EV/FCF multiple make cashflow-based valuation unreliable; investors may need alternative approaches (e.g., asset-based or scenario-driven DCF with recovery timelines).
• Market behavior: A beta of 0.35 implies the stock may underperform in bull markets but could be relatively defensive in severe sell-offs; however, idiosyncratic fundamentals dominate long-term returns.

• Monitoring triggers for elevated risk: widening margins decline, rising interest expense relative to EBITDA, further negative FCF, or significant covenant breaches on debt.
• Investor actions to consider: stress-test cashflow scenarios, track upcoming debt maturities, evaluate refinancing capacity, and review management's plan to restore positive FCF and margin improvement.
• Further reading: Mission Statement, Vision, & Core Values (2026) of Jiangsu Etern Company Limited.

Jiangsu Etern Company Limited (600105.SS) - Growth Opportunities

• Revenue growth (YoY): 9.08% - supports reinvestment and margin improvement opportunities.
• Trailing P/E: 87.61 - reflects strong market optimism about earnings trajectory.
• Forward P/E: 80.48 - suggests analysts expect earnings to rise, narrowing the valuation gap over time.
• EV/Revenue: 6.64 - implies the market values future revenue streams at a premium, but also indicates room to scale revenue to justify valuation.
• Beta: 0.35 - lower volatility can broaden investor base and reduce cost of equity in financing scenarios.
• Market Cap: CNY 21.32 billion - sufficient scale to pursue strategic investments and partnerships.