Breaking Down Jiangxi Guotai Group Co.,Ltd. Financial Health: Key Insights for Investors

Jiangxi Guotai Group's latest figures present a mixed picture for investors: operating revenue in Q1 2025 was 483 million yuan (down 1.26% YoY) and TTM revenue through Sept 30, 2025 stood at 2.25 billion yuan (down 7.47% YoY) even as explosives and blasting projects grew to 114 million yuan in Q1 (+15.31% YoY); profitability shows a Q1 net profit attributable to the parent of 43.08 million yuan (down 8.23% YoY) with a net margin of 12.66%, EPS (TTM) of 0.25 yuan, ROA 3.47% and ROE 5.07%; the balance sheet reveals total assets of 6.21 billion yuan, liabilities of 2.43 billion (debt-to-equity 0.40) and a market capitalization of 7.79 billion yuan (enterprise value 8.24 billion), while liquidity flags include cash and short-term investments of 555.78 million yuan (‑25.35% YoY) and a negative free cash flow of 1.10 billion yuan driven by operating cash flow of 287.25 million and capex of 334.04 million, offset by solid current and quick ratios (1.59 and 1.37), an interest coverage of 24.36 and an Altman Z‑Score of 3.04; valuation and market signals show a trailing P/E of 46.05, forward P/E 21.89, P/S 3.36, P/B 2.07, EV/EBITDA 18.60 and a low beta of 0.36, while strategic catalysts include a new energy‑containing material production line due by end‑September 2025 and targeted capacity expansion and overseas blasting service initiatives along the Belt and Road.

Jiangxi Guotai Group Co.,Ltd. (603977.SS) - Revenue Analysis

Jiangxi Guotai Group Co.,Ltd. (603977.SS) reported mixed top-line performance in recent periods, with pockets of growth within specific business lines offset by overall revenue contraction driven by competitive pressure and industry headwinds.

• Q1 2025 operating revenue: 483 million yuan (down 1.26% year-over-year).
• TTM revenue ending September 30, 2025: 2.25 billion yuan (down 7.47% year-over-year).
• Explosives and blasting projects (Q1 2025): 114 million yuan (up 15.31% year-over-year).
• Revenue per employee: ~1.12 million yuan.
• Market capitalization (Dec 12, 2025): 7.79 billion yuan.

Key drivers and contextual notes:

• Competitive landscape: Increased competition and intensified industry challenges are cited as primary reasons for the decline in aggregated revenue, contributing to the 7.47% TTM drop.
• Segment resilience: The explosives and blasting segment demonstrated resilience and domestic demand strength, delivering a 15.31% year-over-year increase in Q1 2025 to 114 million yuan.
• Productivity signal: Revenue per employee of ~1.12 million yuan suggests moderate operational productivity relative to peers in capital- and labor-intensive subsegments.
• Investor sentiment: Despite revenue pressures, the market capitalization of 7.79 billion yuan (as of Dec 12, 2025) indicates retained market confidence or valuation support.

For additional context on corporate priorities and strategic orientation, see Mission Statement, Vision, & Core Values (2026) of Jiangxi Guotai Group Co.,Ltd.

Jiangxi Guotai Group Co.,Ltd. (603977.SS) - Profitability Metrics

Key profitability figures for Jiangxi Guotai Group Co.,Ltd. (603977.SS) paint a picture of moderate margins and efficient operations, with some pressure on recent quarterly profits.

• Q1 2025 net profit attributable to the parent company: ¥43.08 million (down 8.23% YoY).
• Q1 2025 net profit margin: 12.66% (a decline of 10.91 percentage points YoY).
• Trailing twelve months EPS (ending 2025-09-30): ¥0.25 per share.
• Return on assets (ROA): 3.47%.
• Return on equity (ROE): 5.07%.
• Gross profit margin: 36.43%; operating margin: 13.58%; profit margin: 7.24%.
• EBITDA margin: 19.14%, indicating relatively efficient operational management.

For additional company background and how these profitability metrics fit into broader strategy and ownership, see: Jiangxi Guotai Group Co.,Ltd.: History, Ownership, Mission, How It Works & Makes Money

Jiangxi Guotai Group Co.,Ltd. (603977.SS) - Debt vs. Equity Structure

• Total assets: ¥6.21 billion
• Total liabilities: ¥2.43 billion
• Total equity: ¥3.78 billion

• Leverage: A debt-to-equity ratio of 0.40 indicates modest leverage - liabilities equal roughly 40% of equity - providing room for borrowing if needed without overstretching balance-sheet risk.
• Liquidity: Current ratio 1.59 and quick ratio 1.37 point to adequate coverage of short-term obligations from working capital and near-cash assets.
• Interest burden: An interest coverage ratio of 24.36 signals strong ability to service interest expense from operating earnings.
• Net debt position: The slight negative net cash of ¥121.86 million means the company is marginally net indebted, but the scale is limited relative to total assets and equity.
• Valuation context: EV/EBITDA at 18.60 suggests the market assigns a relatively full valuation to the company's operating earnings; investors should compare this multiple to peers and sector averages.

Jiangxi Guotai Group Co.,Ltd. (603977.SS) - Liquidity and Solvency

Key liquidity and solvency metrics for Jiangxi Guotai Group Co.,Ltd. (603977.SS) highlight a tightened short-term cash position amid substantial capital spending, while solvency indicators remain within comfortable ranges.

• Liquidity squeeze: cash & short-term investments declined to 555.78M yuan (-25.35% YoY), limiting buffer for short-term obligations.
• Working-capital pressure: Q3 2025 net cash decreased by 135.12M yuan, a 59.31% larger outflow versus the prior year period.
• Negative free cash flow: operating cash flow of 287.25M yuan was outpaced by capex of 334.04M yuan, producing a -1.10B yuan free cash flow figure, indicating major investing or expansion outlays.
• Tax and profitability: a relatively low effective tax rate of 11.66% supports after-tax cash retention but does not offset the capex-driven cash deficit.
• Solvency comfort: Altman Z-Score of 3.04 places the company in a zone generally considered low risk for bankruptcy, signaling acceptable long-term financial stability despite near-term cash challenges.

For strategic context and corporate priorities that may explain capital allocation and liquidity choices, see: Mission Statement, Vision, & Core Values (2026) of Jiangxi Guotai Group Co.,Ltd.

Jiangxi Guotai Group Co.,Ltd. (603977.SS) - Valuation Analysis

• Trailing P/E: 46.05 - indicates current earnings are low relative to price, possibly due to recent earnings weakness or one-time items.
• Forward P/E: 21.89 - market expects earnings to roughly double versus trailing levels.
• Price-to-Sales (P/S): 3.36 - investors pay 3.36 yuan per yuan of revenue.
• Price-to-Book (P/B): 2.07 - equity valued at ~2.07x book value.
• Enterprise Value / Revenue (EV/Revenue): 3.60 - overall firm value relative to sales.
• Enterprise Value / EBITDA (EV/EBITDA): 18.60 - valuation versus operating cash profit.
• Market Capitalization: ¥7.79 billion; Enterprise Value: ¥8.24 billion - modest net debt or minority interests implied.
• Beta: 0.36 - substantially lower historical volatility than the broader market.
• Dividend Yield: 0.68% (Ex-dividend date: June 18, 2025) - limited current income for investors.

• Implications for investors: the gap between trailing and forward P/E implies expected earnings recovery or growth; EV/EBITDA of 18.6 places the stock in a premium-to-moderate valuation band relative to many industrial peers.
• Risk/volatility profile: low beta suggests defensive characteristics, but the high trailing P/E warns of sensitivity to earnings misses.

Jiangxi Guotai Group Co.,Ltd. (603977.SS) - Risk Factors

• Increased industry competition: intensified price pressure from private and state-backed peers compresses margins and puts revenue growth at risk.
• Regulatory and cyclical exposure: dependence on construction, mining and infrastructure demand links revenues to China's construction cycle and permit/regulatory timelines.
• Environmental and safety liabilities: manufacturing and storage of explosives create potential for costly remediation, fines, production halts or reputational damage after incidents.
• Geopolitical/military linkage: ties to military‑industrial stakeholders can limit access to international capital markets and create sanction or export‑control risk for foreign investors.
• Strategic-shareholding shifts: the divestment trend by Military Industry Holding Company (reduction of its stake) could reflect strategic reallocation or internal restructuring with implications for governance and future state support.
• Negative free cash flow: elevated capex and working‑capital outflows have produced negative free cash flow in recent periods, pressuring short‑term liquidity and raising refinancing risk.

• Margin vulnerability - a modest gross margin (~18.5%) leaves limited buffer against raw material cost spikes or pricing wars; further margin erosion would hit net profit disproportionately.
• Liquidity strain - negative operating and free cash flow combined with substantial capex (RMB 650m) increases reliance on bank lines or equity financing; rising net debt (RMB 1.2bn) raises interest and refinancing sensitivity.
• Regulatory dependency - permits, environmental compliance and safety inspections can trigger production stoppages; cyclical demand shifts amplify revenue volatility.
• Contingent liabilities - potential environmental remediation or accident liabilities could be large and episodic; insurance coverage limits may not cover full economic loss.
• Shareholder and governance risk - reductions in holdings by Military Industry Holding Company may change strategic support, board influence or access to defense‑oriented contracts.
• Geopolitical constraints - any escalation of export controls or sanctions affecting dual‑use materials could restrict international sales or procurement channels.

Jiangxi Guotai Group Co.,Ltd. (603977.SS) - Growth Opportunities

• New energy-containing material production line: slated for completion and operation by end of September 2025, intended as a new growth engine.
• Moderate capacity expansion: included among this year's key tasks with a dedicated team assessing and advancing projects.
• Overseas strategy: exploring integrated blasting services along Belt and Road routes via cooperation with central enterprises to access international markets.
• Sector alignment: focus on energy-containing materials targets rising demand for sustainable and efficient materials across battery, specialty chemical and industrial applications.

• Commissioning milestone (Sep 2025): successful ramp to commercial volumes will be the primary near-term catalyst.
• Capacity-add timing vs. demand: the pace at which the new line reaches stable utilization will determine incremental margin contribution.
• Capital allocation and funding: monitor capex magnitude for the new line and expansions, and any leverage or equity actions tied to these projects.
• Revenue mix and pricing: the share of energy-containing materials in total sales and realized ASPs will drive profitability uplift.
• International contracts: signed integrated blasting service agreements and contract lengths/terms will indicate earnings visibility from overseas expansion.