Red Avenue New Materials Group Co., Ltd. (603650) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Red Avenue New Materials Group Co., Ltd.

Why is Red Avenue New Materials Group 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 10.26% and Operating profit at 0.78% 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 12.98% signifying low profitability per unit of shareholders funds

Poor long term growth as Net Sales has grown by an annual rate of 10.26% and Operating profit at 0.78% over the last 5 years

Negative results in Sep 25

INTEREST(HY) At CNY 54.34 MM has Grown at 11.97%
DEBT-EQUITY RATIO (HY) Highest at 87.42 %
INTEREST COVERAGE RATIO(Q) Lowest at 210.98

With ROE of 17.02%, it has a very expensive valuation with a 7.58 Price to Book Value

Over the past year, while the stock has generated a return of 74.71%, its profits have risen by 11.8% ; the PEG ratio of the company is 4.5
At the current price, the company has a high dividend yield of 1.8

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 Red Avenue New Materials Group Co., Ltd. for you?

High Risk, High Return

Absolute

Risk Adjusted

Volatility

Red Avenue New Materials Group Co., Ltd.

57.29%

1.76

43.60%

China Shanghai Composite

15.17%

1.58

14.20%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

10.26%

EBIT Growth (5y)

0.78%

EBIT to Interest (avg)

2.99

Debt to EBITDA (avg)

6.02

Net Debt to Equity (avg)

0.85

Sales to Capital Employed (avg)

0.45

Tax Ratio

8.87%

Dividend Payout Ratio

86.51%

Pledged Shares

Institutional Holding

ROCE (avg)

4.79%

ROE (avg)

12.98%

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

7.58

EV to EBIT

103.70

EV to EBITDA

62.43

EV to Capital Employed

4.34

EV to Sales

8.50

PEG Ratio

4.45

Dividend Yield

1.78%

ROCE (Latest)

4.18%

ROE (Latest)

17.02%

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

Mildly Bullish

OBV

Mildly Bearish

Bullish

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

5What is working for the Company

ROCE(HY)

Highest at 16.74%

RAW MATERIAL COST(Y)

Fallen by -1.96% (YoY

CASH AND EQV(HY)

Highest at CNY 2,687.36 MM

NET SALES(Q)

Highest at CNY 868.77 MM

-15What is not working for the Company

INTEREST(HY)

At CNY 54.34 MM has Grown at 11.97%

DEBT-EQUITY RATIO (HY)

Highest at 87.42 %

INTEREST COVERAGE RATIO(Q)

Lowest at 210.98

INVENTORY TURNOVER RATIO(HY)

Lowest at 5.73 times

OPERATING PROFIT(Q)

Lowest at CNY 58.12 MM

OPERATING PROFIT MARGIN(Q)

Lowest at 6.69 %

PRE-TAX PROFIT(Q)

Lowest at CNY 41.29 MM

Here's what is working for Red Avenue New Materials Group Co., Ltd.

Net Sales

Highest at CNY 868.77 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (CNY MM)

Cash and Eqv

Highest at CNY 2,687.36 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Raw Material Cost

Fallen by -1.96% (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 Red Avenue New Materials Group Co., Ltd.

Interest

At CNY 54.34 MM has Grown at 11.97%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CNY MM)

Interest Coverage Ratio

Lowest at 210.98

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 87.42 % 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 58.12 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (CNY MM)

Operating Profit Margin

Lowest at 6.69 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Pre-Tax Profit

Lowest at CNY 41.29 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is negative

Pre-Tax Profit (CNY MM)

Pre-Tax Profit

At CNY 41.29 MM has Fallen at -35.03%

over average net sales of the previous four periods of CNY 63.55 MM

MOJO Watch

Near term Pre-Tax Profit trend is negative

Pre-Tax Profit (CNY MM)

Inventory Turnover Ratio

Lowest at 5.73 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling inventory has slowed

Inventory Turnover Ratio