Yunnan Luoping Zinc&Electricity Co., Ltd. engages in mining and processing lead-zinc ores in China. The company processes zinc ingots, zinc alloys, lead concentrates, germanium concentrates, silver concentrates, cadmium ingots, ultra-fine zinc powder and by-product lead slag, copper concentrates, etc. It is also involved in hydropower generation. The company was incorporated in 2000 and is based in Luoping, China.

China

Yunnan Luoping Zinc&Electricity Co., Ltd.

Basic Materials

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. 

002114.SZ reported revenue of CNY 1 047mn in the last 12 months, down 17% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 20% from FY24 to CNY -0.30.

Over the past six months, the stock has consistently climbed, resulting in 14% total increase. When compared to its international counterparts in the same sector and industry (as shown above), the stock has exceeded their performances, leading by 14ppts in total. 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 mildly favourable.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -7.4% in the last 12 months, a decline from -2.8% in FY23. 

Historically, 002114.SZ has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -9.0%, a growth from -13.6% in FY23. 

Yunnan Luoping Zinc&Electricity Co., Ltd. reported a return on equity (RoE) of -9.8% in the last 12 months, up from -18.4% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to -7.4%, below the peers. 

Another important profitability metric, return on assets (RoA), amounted to -4.1% in the last 12 months, an increase from -8.5% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -1.0 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.

002114.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. 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 low margin volatility, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, bleak profitability, negligible return on capital, and inadequate interest coverage.

In highly turbulent market conditions, 002114.SZ is as volatile as an index. In other words, the stock will move with 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 limited. 

In normal market circumstances, 002114.SZ is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from moderate to notable. 

From both historical and forecast perspectives, the stock is considerably overpriced compared to similar stocks. 

Yunnan Luoping Zinc&Electricity Co., Ltd.

CN¥ 6.88

3

Yunnan Luoping Zinc&Electricity Co., Ltd.

CN¥ 6.88

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 6.88

About

About

About

About