Breaking Down Jiangyin Hengrun Heavy Industries Co., Ltd Financial Health: Key Insights for Investors

Investor alert: Jiangyin Hengrun Heavy Industries' recent figures demand attention as the company posted revenue of CNY 3.13 billion in the nine months to September 30, 2025 (TTM revenue CNY 3.79 billion, a 127.22% YoY increase), reversing a 2024 full-year decline to CNY 1.73 billion, while profitability shows a mixed picture with a nine-month net income of CNY 64.31 million versus a prior-year loss and a troubling TTM net profit margin of -8.01%; balance sheet and liquidity metrics also raise flags-total assets of CNY 5.57 billion against liabilities of CNY 1.92 billion (debt-to-equity 40.22%), total debt CNY 777.6 million with cash CNY 376.1 million, negative operating cash flow of CNY 106.1 million, and DSO improving to 67.91 days-set against a market capitalization of CNY 6.24 billion (P/S 1.65, P/B 2.1) and operational dynamics such as revenue-per-employee of ~CNY 2.70 million and concentration risks from three suppliers supplying ~70% of raw materials; with wind-power recovery and mass production of large megawatt flanges and bearings driving 2025 gains, the data paints a nuanced investment case that warrants a deeper dive.

Jiangyin Hengrun Heavy Industries Co., Ltd (603985.SS) Revenue Analysis

• Nine months ending Sept 30, 2025 revenue: CNY 3.13 billion (vs CNY 1.06 billion in same period 2024) - ≈195.3% year-over-year increase for the period.
• Trailing twelve months (TTM) revenue as of Sept 30, 2025: CNY 3.79 billion - TTM YoY growth: 127.22%.
• Full-year 2024 revenue: CNY 1.73 billion, down 6.64% from CNY 1.85 billion in 2023.
• Revenue per employee: ≈CNY 2.70 million (1,402 employees).
• Market capitalization: ≈CNY 6.24 billion; Price-to-Sales (P/S): 1.65.
• Primary drivers of 2025 revenue surge: recovery in the wind power sector and mass production of large megawatt wind power flanges and bearings.

• Investor implications: elevated 2025 growth tied to sector cyclical recovery and product ramp; compare sustainability of order book and margins against historical FY 2024 baseline.
• For company background and business model context see: Jiangyin Hengrun Heavy Industries Co., Ltd: History, Ownership, Mission, How It Works & Makes Money

Jiangyin Hengrun Heavy Industries Co., Ltd (603985.SS) - Profitability Metrics

• Nine months ending September 30, 2025: net income CNY 64.31 million, versus a net loss of CNY 73.68 million in the same period prior year.
• Basic EPS (continuing operations) for the nine months ending Sept 30, 2025: CNY 0.1459; prior-year loss per share: CNY 0.1671.
• Trailing twelve months (TTM) net profit margin: approximately -8.01%, signaling that despite recent improvement the company remains unprofitable on a TTM basis.
• Operating margin (2022): ~5.8%, below the industry average of ~10%, indicating elevated operating costs relative to peers.
• Q1 2025: revenue CNY 707.63 million with a gross profit margin of 12.33% and net income CNY 24.14 million (EPS CNY 0.05).

• Gross vs. operating pressure: Q1 2025 gross margin of 12.33% provides some cushion, but the 2022 operating margin of 5.8% (well below industry ~10%) implies high SG&A, R&D, or manufacturing overheads compressing operating profit.
• Profitability trend: swing to positive net income in the first nine months of 2025 (CNY 64.31M) and quarterly profits (Q1 net income CNY 24.14M) contrast with a negative TTM net margin (-8.01%), indicating uneven quarterly results and possible one-off impacts or seasonality.
• Earnings per share: EPS recovery to CNY 0.1459 (9M 2025) from a CNY (0.1671) loss in prior period shows EPS volatility tied to operating performance and non-recurring items.
• Key focus areas for investors:
  • Margin expansion drivers: cost control, pricing, product mix.
  • Sustainability of recent profits: whether Q1 and 9M 2025 gains are repeatable.
  • Closing the gap to industry operating margin (~10%).

Jiangyin Hengrun Heavy Industries Co., Ltd (603985.SS) - Debt vs. Equity Structure

• Total assets: CNY 5.57 billion
• Total liabilities: CNY 1.92 billion
• Total debt: CNY 777.6 million
• Cash and equivalents: CNY 376.1 million
• Repurchased shares: 3,723,530 shares (0.84% of issued capital) for a total of CNY 50 million
• Repurchase price range: CNY 12.48-16.35 per share

• Debt-to-equity at 40.22% indicates moderate leverage but not excessive relative to asset base.
• Liabilities-to-assets ≈ 34.5% reinforces that roughly one-third of assets are financed by external claims.
• Net debt of ~CNY 401.5 million (total debt minus cash) signals remaining leverage after liquid reserves.
• Negative operating cash flow combined with the above debt level creates concern for near-term liquidity and financial flexibility, increasing reliance on cash reserves, asset disposals, or external financing.
• Share repurchases (CNY 50 million) reduced cash buffers while returning capital to shareholders; highest repurchase CNY 16.35, lowest CNY 12.48 per share.

Jiangyin Hengrun Heavy Industries Co., Ltd (603985.SS) - Liquidity and Solvency

• Operating cash flow (most recent): -CNY 106.1 million - negative, indicating inefficiencies in converting sales to cash.
• Cash and cash equivalents: CNY 376.1 million - a near-term buffer for obligations.
• Days Sales Outstanding (DSO) for 3 months ending Sep 2025: 67.91 days, improving from 105.56 days year-over-year - better receivables collection.
• Current ratio: not specified - key for assessing short-term liquidity; should be monitored when disclosed.
• Quick ratio: not specified - excludes inventory and is critical for immediate liquidity assessment.
• Capital expenditures: described as substantial - combined with negative operating cash flow, this suggests strained capital efficiency and potential funding needs.

• Investor considerations: monitor upcoming quarterly cash flow, disclosures of current/quick ratios, and any financing activity to cover capex and negative operating cash flow.
• Operational implication: improved DSO reduces working capital needs, partially offsetting cash burn, but not yet sufficient given capex levels.

Jiangyin Hengrun Heavy Industries Co., Ltd (603985.SS) - Valuation Analysis

• Market capitalization: CNY 6.24 billion
• P/S (price-to-sales): 1.65
• P/E (price-to-earnings): -22,817.11 (negative earnings)
• P/B (price-to-book): 2.1
• TTM ROE: 0.06%
• TTM ROI: 0.06%

• Negative P/E: indicates current net losses or extremely small positive EPS causing distortions in the ratio; conventional earnings-based valuation is unreliable until profitability normalizes.
• P/B > 2: suggests investors expect future recovery, strong intangible value, or potential asset revaluation despite current low earnings.
• Low TTM ROE/ROI: highlights limited profitability and capital efficiency over the trailing year; potential red flag for income-focused investors but may reflect one-off events or investment phase.
• P/S of 1.65: provides a revenue-based yardstick that is less sensitive to accounting volatility than P/E and may partially justify the market cap given revenue prospects.

Jiangyin Hengrun Heavy Industries Co., Ltd (603985.SS) - Risk Factors

• Concentration risk: ~70% of raw materials procured from three major suppliers in 2022, exposing the company to supplier disruption and pricing pressure.
• High operating costs: Operational costs totaled CNY 1.2 billion in 2022, a 15% year-over-year increase, persistently above industry averages.
• Market concentration: Over 85% of total revenues in 2022 were generated within China, limiting diversification and international market exposure.
• R&D intensity: R&D spend was approximately CNY 100 million in 2022, equal to ~8% of total revenue - a level that may constrain long-term competitiveness versus peers investing more aggressively.
• Profitability pressure: Trailing twelve months (TTM) net profit margin ~ -8.01%, indicating ongoing losses and margin compression.
• Liquidity and leverage concerns: Elevated debt levels combined with negative operating cash flow raise questions about near-term liquidity and financial flexibility.

• Operational sensitivity: Rising input costs or supplier price hikes would disproportionately impact margins due to supplier concentration and already high operational cost base.
• Refinancing and covenant risk: Negative operating cash flow with significant debt increases the risk of covenant breaches or higher refinancing costs if market conditions deteriorate.
• Growth versus investment trade-off: Current R&D level (~CNY 100M / 8% revenue) may be insufficient to support product/enabling technology development needed for international expansion.
• Macroeconomic exposure: Heavy reliance on domestic demand (>85% revenue) leaves the company vulnerable to China-specific industrial cycles and policy shifts.
• Profitability recovery required: With a TTM net margin of -8.01%, sustainable turnaround requires cost control, revenue diversification, or capital restructuring.

Jiangyin Hengrun Heavy Industries Co., Ltd (603985.SS) - Growth Opportunities

• Wind-power product commercialization: mass production of large-megawatt flanges and bearings in 2025 driving increased order intake and higher ASPs for specialized components.
• Domestic demand base: over 85% of total revenues concentrated in China in 2022, providing scale leverage and faster go-to-market for new products.
• Valuation runway: market capitalization ≈ CNY 6.24 billion with a P/S of 1.65, implying investor expectation of revenue expansion to justify valuation multiples.
• R&D foundation: ~CNY 100 million invested in R&D in 2022 (≈8% of 2022 revenue), creating a platform to scale innovation with incremental investment.

• Strategic growth actions: accelerate commercialization of large-megawatt components, selectively increase R&D above 8% of revenue to sustain product leadership, and pursue partnerships or OEM agreements to accelerate overseas entry.
• Execution risks: sustained negative operating cash flow and debt burden could limit capex, working capital support, and scale-up speed; margin recovery is required to convert revenue growth into equity value.
• Investor considerations: monitor quarterly cash flow trends, receivable/inventory turns, order book composition for wind products, and any shifts in geographic revenue mix away from >85% China concentration.