Yotrio Group Co., Ltd. researches, develops, manufactures, and sells outdoor furniture products in China and internationally. Its product portfolio includes aluminum and steel products, meshes, wickers, resin wood and wood products, slings, creatop table tops, and glass table tops. The company sells its products under the Das Original, Royal Garden, SunVilla, and Outdoor Essentials brand names. Yotrio Group Co., Ltd. was founded in 1992 and is based in Linhai, China.

China

Yotrio Group Co., Ltd.

Consumer Cyclical

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. On average, the company pays dividends annually. 

002489.SZ reported revenue of CNY 5 927mn in the last 12 months, up 5% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 23% from FY24 to CNY 0.27. Market expects EPS to reach CNY 0.22 in FY25.

The stock has been growing steadily in the past six months, adding 24% in total. The stock has outperformed its global peers from the same sector and industry (as shown above), surpassing them by 25ppts in total. At the same time, the stock's performance relative to its the peers from the same country and sector is different. The stock outperformed these peers by 17ppts over the past six months and grew 14ppts faster in the past month. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 12.4% in the last 12 months, up from 6.5% in FY23. 

Historically, 002489.SZ has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 9.7%, a growth from 1.1% in FY23. 

Yotrio Group Co., Ltd. reported a return on equity (RoE) of 14.2% in the last 12 months, up from 1.4% in FY23. The market consensus projects an RoE of 0.8% in FY24, however, this time below its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to 13.7%, above the peers. The consensus estimate for FY24 for RoCE is 2.4%, however, this time below its peers. 

Another important profitability metric, return on assets (RoA), amounted to 7.4% in the last 12 months, an increase from 0.7% in FY23. The market analysts predict that RoA will be 0.4% in FY24, though below its peers in this period. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.2 in the past several years. This ratio implies a average 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.

002489.SZ has above 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. 

No other major risks have been identified.

The risk of default is moderate. We note adequate interest coverage and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, bleak profitability, and negligible return on capital.

In highly turbulent market conditions, 002489.SZ is moderately volatile. In other words, the stock will fall more 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 moderate. 

In normal market circumstances, 002489.SZ is as volatile as an index. Put differently, without outstanding market volatility or shocking company news, the stock's price will move with the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to minimal. We would also like to highlight the minimal intraday volatility of the instrument. 

Considering past and projected metrics, the stock is neither 'expensive' nor 'cheap' compared to its peers. Specifically, the stock is fairly valued on P/E, neutral on EV/EBITDA, reasonably priced on P/FCF. 

Yotrio Group Co., Ltd.

CN¥ 3.91

4

Yotrio Group Co., Ltd.

CN¥ 3.91

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 3.91

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