Breaking Down Jiangsu Tongli Risheng Machinery Co., Ltd. Financial Health: Key Insights for Investors

Peel back the numbers behind Jiangsu Tongli Risheng Machinery Co., Ltd. and investors will find a company with solid 2024 results-operating revenue of ¥2.526 billion (up 3.82%) and net profit of ¥246 million (up 13.48%)-but mixed near-term signals as H1 2025 revenue fell to ¥1.122 billion, down 15.37%; market sentiment contrasts this sales dip with a surging valuation (market cap ¥7.68 billion, up 77.42% year-over-year) and an enterprise value of ¥8.46 billion (EV/EBITDA 14.61), while profitability metrics (ROE 15.11%, operating margin 19.34%, net margin ~9.8%) and liquidity (current ratio 1.87, quick ratio 1.14, cash ¥574.4 million) paint a nuanced picture against conservative leverage (total debt ¥854.62 million, debt/equity 0.33, net cash position -¥318.86 million), valuation signals (P/E 30.97, dividend ¥0.12 yield 0.31%, payout 39.28%), and risk alerts (Altman Z‑Score 2.7, Piotroski F‑Score 4, exposure to raw material price swings and property cycles); with strategic moves (past ¥300 million acquisition and planned bolt‑ons) and analyst projections targeting ~¥2 billion revenue by end‑2025 and double‑digit EPS CAGR, the following analysis breaks down where opportunity and risk intersect-read on to see the detailed breakdown across revenue, profitability, leverage, liquidity, valuation, risks, and growth pathways.

Jiangsu Tongli Risheng Machinery Co., Ltd. (605286.SS) - Revenue Analysis

• 2024 full-year operating revenue: 2.526 billion yuan (+3.82% YoY)
• H1 2025 revenue: 1.122 billion yuan (-15.37% YoY)
• Revenue per employee: ~1.28 million yuan, indicating relatively strong per-head productivity
• Market capitalization (as of 2025-11-13): 7.68 billion yuan (+77.42% YoY)
• Enterprise value: 8.46 billion yuan; EV/EBITDA: 14.61
• Current ratio: 1.87 - healthy short-term liquidity

• The modest 2024 revenue growth paired with the sharper H1 2025 decline suggests seasonality, order timing, or demand softening that investors should monitor.
• High market-cap growth (+77.42% YoY) vs. falling H1 2025 revenue implies investor optimism possibly driven by expectations for margin recovery, backlog conversion, or strategic catalysts.
• An EV/EBITDA of 14.61 places valuation in a moderate range - not deeply cheap, not frothy - warranting earnings trajectory scrutiny.
• Revenue per employee (~1.28M CNY) and a current ratio of 1.87 support operational efficiency and short-term solvency, reducing near-term financial distress risk.

Jiangsu Tongli Risheng Machinery Co., Ltd. (605286.SS) Profitability Metrics

Key profitability indicators for Jiangsu Tongli Risheng Machinery Co., Ltd. (605286.SS) point to improved earnings quality and efficient operations in 2024.

• Net profit (2024): 246 million yuan - up 13.48% YoY, signaling improved bottom-line performance.
• Net profit margin: ~9.8%, reflecting effective cost control relative to revenue.
• Profit margin (reported): 9.93%, consistent with net margin figures and indicating stable conversion of sales into profit.
• Operating margin: 19.34%, showing strong core business profitability before non-operating items.
• Return on equity (ROE): 15.11%, suggesting efficient use of shareholders' equity to generate returns.
• Earnings per share (EPS, 2024): 1.27 yuan; Price-to-Earnings (P/E) ratio: 30.97 - implying a moderate market valuation relative to earnings.

• Operational strength (operating margin 19.34%) combined with rising net profit (246 million yuan) suggests core business scalability and margin resilience.
• ROE of 15.11% indicates returns to equity holders are solid relative to capital employed; monitor leverage and equity changes for sustainability.
• P/E of 30.97 with EPS 1.27 yuan positions the stock at a valuation that assumes continued earnings growth; investors should compare to sector comps and growth forecasts.

For context on the company's strategic direction and values that may underpin these results, see: Mission Statement, Vision, & Core Values (2026) of Jiangsu Tongli Risheng Machinery Co., Ltd.

Jiangsu Tongli Risheng Machinery Co., Ltd. (605286.SS) - Debt vs. Equity Structure

• Total debt: ¥854.62 million
• Cash & cash equivalents: ¥574.40 million
• Net cash position (Net debt): -¥318.86 million
• Debt-to-equity ratio: 0.33
• Interest coverage ratio: 53.65
• Equity (book value): ¥2.58 billion
• Book value per share: ¥12.64
• Working capital: ¥1.56 billion

• The combination of modest absolute debt (¥854.62M) and substantial equity (¥2.58B) yields a low leverage profile (0.33), reducing solvency risk under normal operating conditions.
• Cash of ¥574.4M offsets more than two-thirds of interest-bearing debt, but the company remains net debt negative by ¥318.86M, implying residual borrowing after cash offsets.
• An interest coverage ratio of 53.65 signals ample operating earnings to cover interest; even material EBITDA volatility would likely leave interest service capacity intact.
• Working capital of ¥1.56B supports near-term obligations and operational funding without relying on additional debt.

Jiangsu Tongli Risheng Machinery Co., Ltd. (605286.SS) - Liquidity and Solvency

• Current ratio: 1.87 - indicates good short-term financial health and ability to cover current liabilities with current assets.
• Quick ratio: 1.14 - suggests adequate liquidity when inventory is excluded; sufficient to meet immediate liabilities.
• Interest coverage ratio: 53.65 - demonstrates a very strong ability to service interest expenses from operating earnings.

• Cash and cash equivalents of ¥574.4M provide operational flexibility and near-term coverage for unexpected outflows.
• Working capital of ¥1.56B supports day-to-day operations and indicates sufficient short-term financial health despite net debt.
• Net cash position at ¥-318.86M signals the company carries more debt than cash; financing structure and maturity profile should be reviewed.
• Extremely high interest coverage (53.65) reduces refinancing and default risk in the near term, reflecting strong EBITDA relative to interest expense.

Jiangsu Tongli Risheng Machinery Co., Ltd. (605286.SS) - Valuation Analysis

• Market capitalization: 7.68 billion yuan (as of 2025-11-13), up 77.42% year‑over‑year.
• Enterprise value (EV): 8.46 billion yuan.
• EV/EBITDA: 14.61 - suggests a moderate premium relative to EBITDA.
• Price/Earnings (P/E): 30.97 - indicates investors are paying for growth/earnings visibility.
• Book value per share: 12.64 yuan (P/B not specified).
• Annual dividend: 0.12 yuan per share; dividend yield: 0.31%.
• Dividend payout ratio: 39.28% - a balanced profit distribution level.

Jiangsu Tongli Risheng Machinery Co., Ltd. (605286.SS) - Risk Factors

• Raw material price volatility - stainless steel and carbon steel account for a large portion of COGS; a 10% swing in steel prices can compress gross margins by ~2-4 percentage points depending on product mix.
• Intense competition - domestic OEMs and international elevator-component suppliers pressure pricing and require continuous R&D and CAPEX to maintain market share.
• Low market beta (0.099) - the stock shows very low correlation with broader market moves, which can limit upside during market rallies and reduce liquidity-driven returns.
• Altman Z-Score of 2.7 - falls below the conservative safe zone (Z>2.99), indicating elevated bankruptcy risk relative to healthier peers.
• Piotroski F-Score of 4 - suggests weak fundamental improvements and potential financial distress (scores ≤4 commonly indicate underperformance risk).
• Exposure to China property cycles - order flows for elevators and components are highly correlated with real estate investment and construction starts; a downturn reduces demand and elongates receivable cycles.

• Adverse steel-price spike: inflation in input costs without pricing power could reduce net income by double-digit percentages in a quarter.
• Property downturn: a 15-25% fall in new construction starts could translate into a proportional decline in orders over 6-12 months, exacerbating inventory and receivable risk.
• Competitive pricing pressure: sustained price competition could force margin concessions, lowering EBITDA and worsening Altman and Piotroski trajectories.

Jiangsu Tongli Risheng Machinery Co., Ltd. (605286.SS) Growth Opportunities

• Acquisition strategy: management targets smaller machinery manufacturers to broaden market share and access complementary technologies.
• Completed deal: in 2023 the company acquired a local competitor for 300 million yuan to enhance product offering and customer reach.
• Vertical integration: active integration of upstream metal-material suppliers to secure input costs and improve margins.
• Product expansion: entering adjacent product categories to cross-sell and increase average revenue per customer.
• Core business tailwinds: elevator parts expected to benefit from sustained construction and infrastructure demand.

• Financial implication of the 300 million yuan acquisition: expected accretion to revenue and expanded customer base; integration synergies should support margin recovery over 12-24 months.
• Analyst outlook: consensus points to revenue reaching ~2 billion yuan by end-2025, implying significant capacity scaling and successful cross-selling of new product lines.
• Operational focus: securing metal inputs and integrating acquired R&D/production capabilities to shorten time-to-market for upgraded product variants.