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

Peeling back the financials of Jiangsu Guomao Reducer Co., Ltd. reveals a company with steady top-line traction-Q2 2025 revenue of 687.90 million CNY and TTM revenue of 2.61 billion CNY (2024 annual revenue 2.59 billion CNY, down 2.67% year-on-year)-but notable margin pressure as 2024 net income fell to 293.52 million CNY (a 25.78% decline) and net profit margin slid to 11.3% from 15.2% in 2023; liquidity and balance-sheet strength stand out with 2.04 billion CNY in cash and a near-zero debt-to-equity posture (total debt ~10.27 million CNY), while solvency metrics-current ratio 2.55, quick ratio 2.11, Altman Z-Score 4.97-and robust operating and free cash flow (TTM operating cash flow 497.45 million CNY; free cash flow 442.97 million CNY) underpin flexibility for strategic moves; valuation shows a market pricing for growth (market cap ~11.18 billion CNY, TTM P/E 33.88, forward P/E 20.13, P/S 4.28, EV/EBITDA 19.85), profitability returns are modest (ROE 7.44%, operating margin 6.55%), and growth catalysts-expansion into precision and harmonic reducers for robotics, co-founding a technology company in July 2025, roughly 3,650 customized designs completed in H1 2025, and push into Southeast Asia and Belt and Road markets-set the stage for the key trade-offs investors should examine as you dive deeper into revenue trends, margin recovery levers, and valuation risks and opportunities

Jiangsu Guomao Reducer Co., Ltd. (603915.SS) - Revenue Analysis

Jiangsu Guomao Reducer Co., Ltd. reported steady top-line performance with modest sequential and year-over-year movements, supported by a stable demand profile for its reducers and related products.

• Q2 2025 revenue: 687.90 million CNY (+0.75% QoQ)
• TTM revenue: 2.61 billion CNY (+0.83% YoY)
• 2024 annual revenue: 2.59 billion CNY (-2.67% vs 2023)
• Revenue per employee: ~1.02 million CNY (2,562 employees)
• Market capitalization: ~11.18 billion CNY; P/S ratio: 4.28

The revenue growth profile is relatively stable: modest quarterly expansion in Q2 2025, slight TTM improvement versus the prior year, while the full-year 2024 figure shows a small decline from 2023 - a pattern consistent with steady end-market demand and incremental pricing or mix shifts.

For background on ownership, history and how the business operates, see: Jiangsu Guomao Reducer Co., Ltd.: History, Ownership, Mission, How It Works & Makes Money

Jiangsu Guomao Reducer Co., Ltd. (603915.SS) - Profitability Metrics

Key profitability figures for 2024 highlight a noticeable pullback in earnings and margins for Jiangsu Guomao Reducer Co., Ltd. (603915.SS):

• Net income: 293.52 million CNY (2024), a decline of 25.78% vs. 2023.
• Net profit margin: 11.3% (2024) vs. 15.2% (2023).
• Operating margin: 6.55% (2024), indicating operational efficiency but limited buffer for margin recovery.
• Return on equity (ROE): 7.44% (2024).
• Earnings per share (EPS): 0.45 CNY (2024), down from 0.61 CNY in 2023.

• Implication: declining net profit margin (15.2% → 11.3%) and EPS compression suggest pressure on pricing, cost structure, or product mix.
• Operational note: an operating margin of 6.55% shows positive operating income generation but limited headroom for shocks or reinvestment.
• Investor focus: ROE at 7.44% is modest; management may need to pursue margin-improvement initiatives or capital efficiency measures to lift shareholder returns.

Further strategic context and long-term positioning can be reviewed alongside the company's stated direction: Mission Statement, Vision, & Core Values (2026) of Jiangsu Guomao Reducer Co., Ltd.

Jiangsu Guomao Reducer Co., Ltd. (603915.SS) Debt vs. Equity Structure

• Debt-to-equity ratio: 0.00 (latest available)
• Total debt: ≈ 10.27 million CNY
• Cash and cash equivalents: 2.04 billion CNY
• Net cash position: ≈ 2.03 billion CNY

• The minimal debt burden reduces interest expense risk and refinancing pressure.
• Substantial cash holdings support capex, R&D, acquisitions, or shareholder returns without external funding.
• A conservative leverage stance implies a focus on organic growth and stability over aggressive expansion via debt.

Jiangsu Guomao Reducer Co., Ltd. (603915.SS) - Liquidity and Solvency

• Current ratio: 2.55 - comfortably above 1, indicating ample short-term asset coverage for current liabilities.
• Quick ratio: 2.11 - sufficient immediate liquidity excluding inventories, showing ability to meet urgent obligations.
• Operating cash flow (TTM): 497.45 million CNY - strong cash inflows from operations supporting working capital and investments.
• Free cash flow: 442.97 million CNY - available cash after capital expenditures to fund growth, dividends, or debt reduction.
• Interest coverage ratio: 69.56 - exceptional ability to cover interest expense, signaling minimal refinancing risk.
• Altman Z-Score: 4.97 - low bankruptcy risk and overall financial stability.

Jiangsu Guomao Reducer Co., Ltd. (603915.SS) - Valuation Analysis

Jiangsu Guomao Reducer Co., Ltd. is trading at multiples that reflect a market willing to pay a premium for its earnings and assets, implying expectations of continued growth and a strong competitive position.

• Trailing twelve months (TTM) P/E: 33.88 - signals the market currently prices past-year earnings at a high multiple.
• Forward P/E: 20.13 - implies analysts/market expect earnings to grow, compressing the multiple versus TTM.
• Price-to-Book (P/B): 2.47 - indicates investors value the company at roughly 2.5x its net book value.
• EV/Sales: 2.92 - shows enterprise value is nearly 3x annual revenues, a moderately elevated sales multiple.
• EV/EBITDA: 19.85 - reflects a relatively rich valuation on an operating cash‑flow basis.

Key interpretive points for investors:

• Premium valuation: Multiple metrics consistently above conservative benchmarks, suggesting investors expect above-average growth or superior profitability.
• Growth discounting: The gap between TTM and forward P/E (33.88 → 20.13) signals anticipated earnings acceleration; validate via revenue and margin trends.
• Asset vs. earnings orientation: P/B of 2.47 paired with high EV/EBITDA indicates the market values both the company's asset base and its cash‑flow generation.
• Comparative diligence: Compare these multiples to sector peers and historical ranges to assess whether the premium is justified by market share, margins, or technology/licensing advantages.

For additional context on strategic positioning and long-term goals that may underpin these valuation levels, see: Mission Statement, Vision, & Core Values (2026) of Jiangsu Guomao Reducer Co., Ltd.

Jiangsu Guomao Reducer Co., Ltd. (603915.SS) - Risk Factors

• Revenue pressure: annual revenue declined by 2.67% in 2024, signaling demand weakness or pricing pressure in core markets.
• Profitability compression: net profit margin fell to 11.3% in 2024 from 15.2% in 2023, reflecting margin erosion.
• Operational efficiency: operating margin stood at 6.55% in 2024, indicating scope for cost control and productivity improvements.
• Net income volatility: net income decreased by 25.78% year-over-year in 2024, which raises concerns about earnings stability.
• Sector concentration: heavy reliance on the industrial machinery sector exposes the company to cyclical demand fluctuations tied to manufacturing and capital expenditure cycles.
• Competitive pressures: a crowded reducer market may constrain pricing power, compress margins, and threaten market share.

• Market sensitivity: downturns in end-markets (automotive, heavy machinery, automation) can quickly translate into lower orders and utilization.
• Price competition: lower-cost competitors or oversupply in gear/reducer components could force price concessions.
• Execution risk: failure to improve operating margin from 6.55% may limit free cash flow and investment capacity.
• Balance sheet & liquidity considerations: sustained margin and income declines could stress working capital and capital expenditure funding.
• Regulatory and trade risk: exposure to trade policies or tariffs affecting machinery components could raise costs or limit market access.

Jiangsu Guomao Reducer Co., Ltd. (603915.SS) - Growth Opportunities

• Product diversification: expansion into precision reducers and harmonic reducers tailored for robotics joint modules and collaborative robots.
• Technology partnerships: in July 2025 the company co-founded a technology company focused on deeper cooperation in robotic joint modules, accelerating integration with robot OEMs.
• R&D intensity: approximately 3,650 customized product designs completed in H1 2025, reflecting a marked increase in customer-tailored engineering and rapid prototyping capabilities.
• Strategic positioning: established platform across general, specialized, and precision fields enabling cross-selling and modular product development.
• Market expansion: active push into Southeast Asia and Belt and Road Initiative markets to diversify revenue sources and capture higher-growth regions.
• AI & embodied intelligence: focus on AI-driven control and embodied intelligence creates demand for advanced reducer performance (precision, backdriveability, compactness).