Wuxi Acryl Technology Co., Ltd. produces and sells polyester, acrylic, polyurethane, high-performance epoxy, and special application resins in China. The company offers isobornyl acrylates and methacrylates, cycloaliphatic acrylates, and polyether amines. It also provides polymers for optical apparatus, special composite materials, special application resins etc. Wuxi Acryl Technology Co., Ltd. was founded in 1999 and is headquartered in Wuxi, China.

China

Wuxi Acryl Technology Co., Ltd.

Basic Materials

The company pays dividends from time to time. It has paid dividends in less than half 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. 

603722.SS reported revenue of CNY 468mn in the last 12 months, up 1% 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 -0.28. Market expects EPS to reach CNY 0.02 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). It has underperformed this peer group by 15ppts over six months and grown 6ppts 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 -4.4% in the last 12 months, a decline from 10.7% in FY23. 

Historically, 603722.SS has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -5.5%, down from 4.5% in FY23. 

Wuxi Acryl Technology Co., Ltd. reported a return on equity (RoE) of -3.0% in the last 12 months, down from 3.1% in FY23. The market consensus projects an RoE of 0.2% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to -2.4% in the last 12 months, a decrease from 2.5% in FY23. The market analysts predict that RoA will be 0.2% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to -2.9%, below the peers. The consensus estimate for FY24 for RoCE is 0.2%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.7 in the past several years. This ratio implies a poor 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.

603722.SS has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and remains extremely favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 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 adequate interest coverage, solid cash flow generation, 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, 603722.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, 603722.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 low to mild. We would also like to highlight the mild intraday volatility of the instrument. 

Based on key historical and expected multiples, the stock is greatly overvalued relative to its peers. In particular, the stock is overpriced on P/E, 'expensive' on EV/EBITDA, overvalued on P/FCF. 

Wuxi Acryl Technology Co., Ltd.

CN¥ 38.15

3

Wuxi Acryl Technology Co., Ltd.

CN¥ 38.15

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 38.15

About

About

About

About