Chalkis Health Industry Co., Ltd. produces, processes, and sells tomatoes worldwide. It offers tomato paste concentrated in drums and wooden bins, peeled and diced tomatoes, canned tomato products, tomato fiber sheets, and tomato seed oil, as well as lycopene capsules. The company was formerly known as Xinjiang Chalkis Co., Ltd. and changed its name to Chalkis Health Industry Co., Ltd. in May 2016. Chalkis Health Industry Co., Ltd. is based in Urumqi, China.

China

Chalkis Health Industry Co., Ltd

Consumer Cyclical

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

000972.SZ reported revenue of CNY 266mn in the last 12 months, down 13% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 6% from FY24 to CNY -0.31.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 18ppts and its growth accelerated by 6ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -80.4% in the last 12 months, a decline from 28.4% in FY23. 

Historically, 000972.SZ has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -91.9%, down from 18.9% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -104.5%, below the peers. 

Another important profitability metric, return on assets (RoA), amounted to -17.2% in the last 12 months, a decrease from 8.8% in FY23. 

Chalkis Health Industry Co., Ltd reported a return on equity (RoE) of -288.9% in the last 12 months, down from 53.2% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -2.7 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

000972.SZ has average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually stable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth and low margin volatility, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, negligible return on capital, poor working capital management, inadequate interest coverage, poor cash flow generation, and an unfavourable capital structure.

In highly turbulent market conditions, 000972.SZ is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, 000972.SZ is moderately volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move slightly wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. 

Considering past and projected metrics, the stock is distinctly 'expensive' compared to its peers. 

Chalkis Health Industry Co., Ltd

CN¥ 3.47

3

Chalkis Health Industry Co., Ltd

CN¥ 3.47

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 3.47

About

About

About

About