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.

123.71%

1.76

43.60%

China Shanghai Composite

21.43%

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)

10.85%

EBIT Growth (5y)

-4.92%

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

53.40%

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

7.39

EV to EBIT

123.08

EV to EBITDA

79.52

EV to Capital Employed

4.82

EV to Sales

9.62

PEG Ratio

5.51

Dividend Yield

0.93%

ROCE (Latest)

3.92%

ROE (Latest)

13.92%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bollinger Bands

Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Dow Theory

Mildly Bullish

OBV

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

9What is working for the Company

OPERATING CASH FLOW(Y)

Highest at CNY 466 MM

CASH AND EQV(HY)

Highest at CNY 2,455.87 MM

DEBTORS TURNOVER RATIO(HY)

Highest at 2.69 times

NET SALES(Q)

Highest at CNY 1,048.77 MM

PRE-TAX PROFIT(Q)

Highest at CNY 89.6 MM

-6What is not working for the Company

INVENTORY TURNOVER RATIO(HY)

Lowest at 5.33 times

OPERATING PROFIT MARGIN(Q)

Lowest at 10.09 %

RAW MATERIAL COST(Y)

Grown by 6.73% (YoY

OPERATING PROFIT(Q)

Lowest at CNY 105.79 MM

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

Operating Cash Flow

Highest at CNY 466 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 Sales

Highest at CNY 1,048.77 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (CNY MM)

Net Sales

At CNY 1,048.77 MM has Grown at 22.35%

over average net sales of the previous four periods of CNY 857.2 MM

MOJO Watch

Near term sales trend is positive

Net Sales (CNY MM)

Pre-Tax Profit

Highest at CNY 89.6 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (CNY MM)

Pre-Tax Profit

At CNY 89.6 MM has Grown at 59.4%

over average net sales of the previous four periods of CNY 56.21 MM

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (CNY MM)

Cash and Eqv

Highest at CNY 2,455.87 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Debtors Turnover Ratio

Highest at 2.69 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Here's what is not working for Red Avenue New Materials Group Co., Ltd.

Operating Profit Margin

Lowest at 10.09 % and Fallen

In each period in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Inventory Turnover Ratio

Lowest at 5.33 times and Fallen

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

MOJO Watch

Company's pace of selling inventory has slowed

Inventory Turnover Ratio

Operating Profit

Lowest at CNY 105.79 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (CNY MM)

Raw Material Cost

Grown by 6.73% (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