Breaking Down KEDE Numerical Control Co., Ltd. Financial Health: Key Insights for Investors

Curious whether KEDE Numerical Control Co., Ltd. (688305.SS) is a growth story or a valuation risk? Read on: the company posted revenue of CNY 605.47 million in 2024, up 33.88% year-over-year off a multi-year streak (43.37% in 2023, 24.39% in 2022), yet Q3 2025 revenue fell to CNY 106 million (‑15.79% YoY), while profitability remains robust with net income of CNY 121.56 million in 2024 and a net profit margin of 21.45%; balance-sheet strength stands out too, with a debt-to-equity ratio of 0.00 and net cash of CNY 534.27 million, even as market expectations push the P/E to 66.79 against a market capitalization of CNY 7.61 billion - explore the revenue mix, liquidity metrics, valuation multiples and growth targets in the full breakdown to decide whether KEDE's premium pricing is justified.

KEDE Numerical Control Co., Ltd. (688305.SS) - Revenue Analysis

KEDE Numerical Control Co., Ltd. reported robust top-line growth through 2024 but showed signs of deceleration into 2025. Key revenue figures and trends illustrate both the company's expansion in high-end CNC machine tools and a recent quarter of softer sales.

• 2024 total revenue: CNY 605.47 million (up 33.88% from CNY 452.26 million in 2023).
• 2023 revenue growth: +43.37% (relative to 2022).
• 2022 revenue growth: +24.39% year-over-year.
• Q3 2025 revenue: CNY 106 million (down 15.79% YoY), indicating a potential short-term slowdown.
• Market capitalization (as of 2025-12-12): CNY 7.61 billion.
• Revenue per employee: ~CNY 892,554, signaling relatively high productivity per headcount.
• High-end CNC machine tool revenue (2024): CNY 514.11 million (up 20.66% year-over-year), representing the dominant revenue segment.

Drivers and structural notes:

• High-end CNC machines comprise the bulk of revenue - CNY 514.11 million in 2024 - underscoring product-mix strength and pricing power in premium segments.
• Consistent multi-year revenue expansion from 2022-2024 (24.4% → 43.4% → 33.9%) reflects strong demand and scaling, but the Q3 2025 decline (-15.8% YoY) is a near-term warning signal for revenue momentum.
• Revenue per employee (~CNY 892,554) suggests efficient labor utilization versus peers in domestic CNC manufacturing; investors should compare this to industry benchmarks for context.

For more on shareholder composition and investor activity, see: Exploring KEDE Numerical Control Co., Ltd. Investor Profile: Who's Buying and Why?

KEDE Numerical Control Co., Ltd. (688305.SS) Profitability Metrics

• Net income (2024): CNY 121.56 million - up 27.37% vs. 2023 (CNY 95.45 million).
• Net profit margin (2024): 21.45% - indicates strong bottom-line conversion of revenue to profit.
• Operating margin (2024): 21.15% - reflects efficient core operations.
• Gross margin (2024): 41.04% - healthy buffer between revenue and cost of goods sold.
• Return on equity (ROE, 2024): 7.24% - shows returns generated on shareholders' equity.
• Earnings per share (TTM): CNY 0.86; Price-to-earnings (P/E): 66.79 - market pricing implies elevated growth expectations.

• High gross margin (41.04%) combined with operating margin (21.15%) suggests a scalable business model with room to translate revenue growth into profit.
• The gap between ROE (7.24%) and P/E (66.79) highlights market optimism that may require sustained earnings growth to justify current valuation.
• Recent net income growth (27.37%) is a positive momentum indicator but should be monitored alongside revenue trends and capital structure.

KEDE Numerical Control Co., Ltd. (688305.SS) - Debt vs. Equity Structure

• Debt-to-equity ratio: 0.00 - effectively no leverage relative to equity.
• Total debt: CNY 1.01 million versus cash & cash equivalents: CNY 535.28 million - net cash position of CNY 534.27 million.
• Current ratio: 3.88 - strong short-term solvency.
• Quick ratio: 2.36 - robust liquidity excluding inventory.
• Interest coverage ratio: 1,038.11 - earnings far exceed interest obligations.
• Enterprise value (EV): CNY 8.00 billion; EV/EBITDA: 44.62 - indicates a premium valuation multiple.

• Implications for investors: the net cash position and near-zero leverage reduce bankruptcy risk and provide flexibility for capex, R&D, dividends, or buybacks.
• Valuation caveat: the high EV/EBITDA (44.62) signals market expectations for above-average growth or margins; investors should assess earnings sustainability and growth drivers versus the premium multiple.
• Liquidity profile: current ratio 3.88 and quick ratio 2.36 imply strong short-term resilience even without inventory sales.

KEDE Numerical Control Co., Ltd. (688305.SS) - Liquidity and Solvency

• Current ratio: 3.88 - well above typical industry norms, indicating ample short-term asset coverage for current liabilities.
• Quick ratio: 2.36 - confirms the company can meet immediate obligations without relying on inventory liquidation.
• Debt-to-equity ratio: 0.00 - effectively debt-free, reducing refinancing and default risk.
• Interest coverage ratio: 1,038.11 - an exceptionally high capacity to service interest expenses from operating earnings.
• Net cash position: CNY 534.27 million - provides a substantial buffer for cash needs, investments, or adverse conditions.
• Enterprise value (EV): CNY 8.00 billion and EV/EBITDA: 44.62 - market values the company at a premium relative to earnings.

• Investor takeaway: liquidity and solvency metrics reduce short-term financial risk and support operational flexibility.
• Valuation note: the high EV/EBITDA suggests investors are pricing in growth, strategic value, or premium margins; contrasts with the conservative balance sheet.
• Capital structure: zero reported debt limits interest-rate exposure but may imply under-levered equity financing for expansion.

KEDE Numerical Control Co., Ltd. (688305.SS) - Valuation Analysis

• Market capitalization: CNY 7.61 billion (as of December 12, 2025).
• P/E ratio: 66.79 - signals elevated market growth expectations.
• EV/EBITDA: 44.62 - premium relative to typical industry multiples.
• P/TBV (Price to Tangible Book Value): 5.50 - trading well above book value per share.
• Dividend yield: 0.28% with annual dividend CNY 0.19 per share - conservative payout policy.
• Beta: 0.61 - lower volatility than the market, attractive to risk-averse investors.

• Investor takeaway: valuation metrics collectively point to a premium growth narrative - P/E and EV/EBITDA are stretched relative to typical manufacturing/control-equipment peers, while P/TBV underscores market willingness to pay for intangible assets, technology and future earnings.
• Risk considerations: high multiples increase sensitivity to earnings misses; a conservative dividend and low beta suggest management prioritizes reinvestment and stability over yield.
• Complementary reading: KEDE Numerical Control Co., Ltd.: History, Ownership, Mission, How It Works & Makes Money

KEDE Numerical Control Co., Ltd. (688305.SS) - Risk Factors

• Revenue contraction: Q3 2025 revenue of CNY 106 million represents a 15.79% year-over-year decline, signaling potential difficulties in sustaining top-line growth and demand for KEDE's products.
• Valuation risk: A trailing P/E ratio of 66.79 implies high market expectations; failure to meet growth forecasts could lead to sharp multiple compression.
• Market sensitivity: Beta of 0.61 indicates lower historical volatility versus the market, but systemic downturns or sector-specific shocks can still depress share price.
• Product concentration: Heavy reliance on high-end CNC machine tools exposes KEDE to rapid technological shifts, obsolescence risk, and intensified competition from domestic and international vendors.
• Leverage profile: Reported debt-to-equity ratio of 0.00 shows minimal current leverage; however, any future debt issuance to finance expansion or R&D would increase financial risk and interest burden.
• Income investor appeal: Dividend yield of 0.28% reflects a conservative payout policy, reducing attractiveness for yield-seeking investors and limiting downside cushion from dividends.

• Operational risks: Supply chain disruption, component shortages, and manufacturing scale-up challenges could further pressure margins and delivery timelines.
• R&D and CAPEX needs: Sustaining competitiveness requires ongoing R&D and capital expenditure; inadequate investment or inefficient allocation risks product lag.
• Competitive dynamics: Domestic peers and global CNC incumbents may pursue aggressive pricing, technological differentiation, or vertical integration, eroding KEDE's market share.
• Regulatory and macro risks: Changes in trade policy, export controls, or a Chinese manufacturing slowdown would directly affect order flows and profitability.
• Liquidity and funding risk: Although currently unlevered, funding large contracts, expansions, or acquisitions may necessitate raising debt or equity, diluting current holders or increasing financial obligations.

KEDE Numerical Control Co., Ltd. (688305.SS) - Growth Opportunities

• Increase R&D intensity to 15% of total revenue by 2024 (from ~9-10% in recent years), demonstrating a shift toward technology-led growth.
• Expand global market share from 8% to 15% by 2025, aiming to become a top-three global manufacturer in numerical control systems via entry into Southeast Asia and European markets.
• Deploy new CRM technology to lift customer satisfaction from 75% to 90% by 2024, improving retention and aftermarket revenue.
• Cut carbon emissions by 25% by 2025 through investments in green technology and energy-efficient machinery, supporting cost savings and regulatory alignment.
• Raise the employee training budget to CNY 10 million in 2024 to boost skills, productivity and retention.
• Grow high-end CNC machine tool revenue, which reached CNY 514.11 million in 2024 (a 20.66% year-over-year increase), signaling strong demand in premium segments.

• Market expansion tactics: targeted distributor partnerships, localized service centers, and tailored product variants for Southeast Asia and Europe to capture the planned +7 percentage-point market share increase.
• R&D focus areas: control algorithms, multi-axis precision, digital twin integration and embedded IoT for predictive maintenance-investments intended to raise gross margins on high-end product lines.
• Sustainability and cost impact: energy-efficient machine retrofits and on-site renewable projects expected to lower operating expenses while delivering the 25% emissions cut by 2025.
• CRM and aftermarket: a 90% satisfaction target is tied to higher recurring revenues via service contracts, spare parts and software subscriptions.
• Human capital: CNY 10 million training allocation prioritizes advanced CNC programming, quality control and international sales capabilities to support scaling.