Lotus Health Group Company engages in the production and sale of healthy condiments and foods in China. The company offers louts mono sodium glutamate, starch/potato/corn, and chicken bouillon. It also provides healthy oil, energy drink, healthy snack, flour, rice, and pasta products. The company was formerly known as Lotus Health Industry Holding Group Company. Lotus Health Group Company was founded in 1983 and is based in Xiangcheng, China.

China

LOTUS HOLDINGS

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. 

600186.SS reported revenue of CNY 2 864mn in the last 12 months, up 8% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 30% from FY24 to CNY 0.15. Market expects EPS to reach CNY 0.12 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 15ppts over past six months and grown 2ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 13.4% in the last 12 months, up from 9.1% in FY23. 

Historically, 600186.SS has reported average net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 8.9%, a growth from 6.2% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 8.6% in the last 12 months, an increase from 5.3% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 14.8%, above the peers. 

LOTUS HOLDINGS reported a return on equity (RoE) of 15.4% in the last 12 months, up from 8.8% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.4 in the past several years. This ratio implies a strong 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.

600186.SS boasts high trading liquidity. The average private investor can sell his common position in the stock 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 resilient historical revenue growth, 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, bleak profitability, poor working capital management, and poor cash flow generation.

In highly turbulent market conditions, 600186.SS 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, 600186.SS 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 limited to notable. We would also like to highlight the notable intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is considerably overpriced compared to similar stocks. In particular, the stock is overpriced on P/E, 'expensive' on EV/EBITD. 

Log in

LOTUS HOLDINGS

CN¥ 6.09

4

LOTUS HOLDINGS

CN¥ 6.09

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 6.09

About

About

About

About