Why is Huafon Chemical Co., Ltd. ?
1
Poor long term growth as Net Sales has grown by an annual rate of 7.33% and Operating profit at -11.37% over the last 5 years
2
Negative results in Jun 25
- NET PROFIT(HY) At CNY 974.92 MM has Grown at -35.67%
- ROCE(HY) Lowest at 6.43%
- NET SALES(Q) Lowest at CNY 5,798.51 MM
3
With ROE of 6.31%, it has a very attractive valuation with a 1.65 Price to Book Value
- Over the past year, while the stock has generated a return of 20.89%, its profits have fallen by -36.1%
- At the current price, the company has a high dividend yield of 1.7
4
Market Beating performance in long term as well as near term
- Along with generating 20.89% returns in the last 1 year, the stock has outperformed China Shanghai Composite in the last 3 years, 1 year and 3 months
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 Garments & Apparels)
When to re-enter? - We will constantly monitor the company and review our call based on new data
Is Huafon Chemical Co., Ltd. for you?
Medium Risk, High Return
Absolute
Risk Adjusted
Volatility
Huafon Chemical Co., Ltd.
16.67%
0.96
31.07%
China Shanghai Composite
15.19%
1.01
15.10%
Quality key factors
Factor
Value
Sales Growth (5y)
7.33%
EBIT Growth (5y)
-11.37%
EBIT to Interest (avg)
30.65
Debt to EBITDA (avg)
Net Debt is too low
Net Debt to Equity (avg)
-0.10
Sales to Capital Employed (avg)
0.80
Tax Ratio
11.79%
Dividend Payout Ratio
33.53%
Pledged Shares
0
Institutional Holding
0
ROCE (avg)
20.02%
ROE (avg)
17.43%
Valuation Key Factors 
Factor
Value
P/E Ratio
26
Industry P/E
Price to Book Value
1.65
EV to EBIT
30.93
EV to EBITDA
14.21
EV to Capital Employed
1.70
EV to Sales
1.67
PEG Ratio
NA
Dividend Yield
1.69%
ROCE (Latest)
5.48%
ROE (Latest)
6.31%
Technical key factors
Indicator
Weekly
Monthly
MACD
Bullish
Bullish
RSI
No Signal
No Signal
Bollinger Bands
Bullish
Bullish
Moving Averages
Bullish (Daily)
KST
Mildly Bearish
Bullish
Dow Theory
Mildly Bearish
No Trend
OBV
Mildly Bearish
No Trend
Technical Movement
2What is working for the Company
OPERATING CASH FLOW(Y)
Highest at CNY 3,653.63 MM
-19What is not working for the Company
NET PROFIT(HY)
At CNY 974.92 MM has Grown at -35.67%
ROCE(HY)
Lowest at 6.43%
NET SALES(Q)
Lowest at CNY 5,798.51 MM
RAW MATERIAL COST(Y)
Grown by 18.97% (YoY
DEBT-EQUITY RATIO
(HY)
Highest at -7.3 %
INVENTORY TURNOVER RATIO(HY)
Lowest at 5.66%
DEBTORS TURNOVER RATIO(HY)
Lowest at 3.75%
Here's what is working for Huafon Chemical Co., Ltd.
Operating Cash Flow
Highest at CNY 3,653.63 MM
in the last three yearsMOJO Watch
The company has generated higher cash revenues from business operations
Operating Cash Flows (CNY MM)
Here's what is not working for Huafon Chemical Co., Ltd.
Net Profit
At CNY 974.92 MM has Grown at -35.67%
Year on Year (YoY)MOJO Watch
Near term Net Profit trend is very negative
Net Profit (CNY MM)
Net Sales
Lowest at CNY 5,798.51 MM and Fallen
In each period in the last five periodsMOJO Watch
Near term sales trend is very negative
Net Sales (CNY MM)
Net Sales
At CNY 5,798.51 MM has Fallen at -12.34%
over average net sales of the previous four periods of CNY 6,615.14 MMMOJO Watch
Near term sales trend is very negative
Net Sales (CNY MM)
Debt-Equity Ratio
Highest at -7.3 %
in the last five Semi-Annual periodsMOJO Watch
The company is borrowing more to fund its operations; it's liquidity situation may be stressed
Debt-Equity Ratio
Inventory Turnover Ratio
Lowest at 5.66%
in the last five Semi-Annual periodsMOJO Watch
Company's pace of selling inventory has slowed
Inventory Turnover Ratio
Debtors Turnover Ratio
Lowest at 3.75%
in the last five Semi-Annual periodsMOJO Watch
Company's pace of selling Debtors has slowed
Debtors Turnover Ratio
Raw Material Cost
Grown by 18.97% (YoY)
MOJO Watch
The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin
Raw Material Cost as a percentage of Sales






