GEM Co., Ltd. (002340) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

GEM Co., Ltd.

Why is GEM Co., Ltd. ?

High Debt Company with a Debt to Equity ratio (avg) at times

Poor long term growth as Net Sales has grown by an annual rate of 19.46% and Operating profit at 17.90% over the last 5 years
High Debt Company with a Debt to Equity ratio (avg) at times
The company has been able to generate a Return on Equity (avg) of 5.95% signifying low profitability per unit of shareholders funds

The company has declared negative results in Mar'2025 after 4 consecutive positive quarters

INTEREST(HY) At CNY 383.35 MM has Grown at 42.29%
DEBT-EQUITY RATIO (HY) Highest at 143.48 %
INTEREST COVERAGE RATIO(Q) Lowest at 384.82

With ROE of 9.21%, it has a expensive valuation with a 1.87 Price to Book Value

Over the past year, while the stock has generated a return of 11.73%, its profits have risen by 298.8% ; the PEG ratio of the company is 0.1
At the current price, the company has a high dividend yield of 0.9

Real-Time Research Report

Verdict Report

How much should you sell?

All quantity irrespective of whether you are making profits or losses

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Specialty Chemicals)

When to re-enter? - We will constantly monitor the company and review our call based on new data

Is GEM Co., Ltd. for you?

Medium Risk, High Return

Absolute

Risk Adjusted

Volatility

GEM Co., Ltd.

-100.0%

0.99

28.63%

China Shanghai Composite

15.19%

1.01

15.10%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

19.46%

EBIT Growth (5y)

17.90%

EBIT to Interest (avg)

2.28

Debt to EBITDA (avg)

6.26

Net Debt to Equity (avg)

1.41

Sales to Capital Employed (avg)

0.70

Tax Ratio

16.21%

Dividend Payout Ratio

33.00%

Pledged Shares

Institutional Holding

ROCE (avg)

4.61%

ROE (avg)

5.95%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.87

EV to EBIT

28.94

EV to EBITDA

15.24

EV to Capital Employed

1.33

EV to Sales

2.14

PEG Ratio

0.07

Dividend Yield

0.90%

ROCE (Latest)

4.58%

ROE (Latest)

9.21%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

Bullish

RSI

No Signal

Bollinger Bands

Bearish

Mildly Bullish

Moving Averages

Mildly Bullish (Daily)

KST

Mildly Bearish

Bullish

Dow Theory

Mildly Bearish

OBV

Mildly Bearish

No Trend

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

17What is working for the Company

OPERATING CASH FLOW(Y)

Highest at CNY 3,330.65 MM

NET PROFIT(HY)

Higher at CNY 1,088.67 MM

RAW MATERIAL COST(Y)

Fallen by -10.14% (YoY

NET SALES(Q)

Highest at CNY 9,469.27 MM

EPS(Q)

Highest at CNY 0.1

-16What is not working for the Company

INTEREST(HY)

At CNY 383.35 MM has Grown at 42.29%

DEBT-EQUITY RATIO (HY)

Highest at 143.48 %

INTEREST COVERAGE RATIO(Q)

Lowest at 384.82

DEBTORS TURNOVER RATIO(HY)

Lowest at 3.93%

OPERATING PROFIT(Q)

Lowest at CNY 712.28 MM

OPERATING PROFIT MARGIN(Q)

Lowest at 7.52 %

Here's what is working for GEM Co., Ltd.

Net Profit

At CNY 1,088.67 MM has Grown at 618.7%

Year on Year (YoY)

MOJO Watch

Net Profit trend is very positive

Net Profit (CNY MM)

Operating Cash Flow

Highest at CNY 3,330.65 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (CNY MM)

Net Profit

Higher at CNY 1,088.67 MM

than preceding 12 month period ended Mar 2025

MOJO Watch

In the half year the company has already crossed Net Profit of the previous twelve months

Net Profit (CNY MM)

Net Sales

Highest at CNY 9,469.27 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (CNY MM)

EPS

Highest at CNY 0.1

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (CNY)

Raw Material Cost

Fallen by -10.14% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for GEM Co., Ltd.

Interest

At CNY 383.35 MM has Grown at 42.29%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CNY MM)

Interest Coverage Ratio

Lowest at 384.82

in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Debt-Equity Ratio

Highest at 143.48 % and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio

Operating Profit

Lowest at CNY 712.28 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (CNY MM)

Operating Profit Margin

Lowest at 7.52 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Debtors Turnover Ratio

Lowest at 3.93%

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio