Chengxin Lithium Group (SZSE:002240) - Share price, News & Analysis

2240 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	6/6
Past Performance	5/6
Financial Health	6/6
Dividends	0/6

2240 Stock Overview

Chengxin Lithium Group Co., Ltd. engages in the mining, production, and sale of lithium salt in China.

Rewards

Trading at 68.5% below our estimate of its fair value

Earnings are forecast to grow 29.53% per year

Earnings grew by 848.2% over the past year

Risk Analysis

High level of non-cash earnings

Shareholders have been diluted in the past year

Chengxin Lithium Group Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Chengxin Lithium Group
Historical stock prices
Current Share Price	CN¥58.65
52 Week High	CN¥76.96
52 Week Low	CN¥27.53
Beta	0.82
1 Month Change	19.45%
3 Month Change	4.64%
1 Year Change	101.69%
3 Year Change	599.05%
5 Year Change	399.15%
Change since IPO	444.32%

Shareholder Returns

	2240	CN Forestry	CN Market
7D	-4.3%	0.2%	2.1%
1Y	101.7%	-8.5%	-10.1%

Return vs Industry: 002240 exceeded the CN Forestry industry which returned -8.5% over the past year.

Return vs Market: 002240 exceeded the CN Market which returned -10.1% over the past year.

Price Volatility

Is 2240's price volatile compared to industry and market?
2240 volatility
2240 Average Weekly Movement	8.6%
Forestry Industry Average Movement	5.7%
Market Average Movement	7.2%
10% most volatile stocks in CN Market	10.1%
10% least volatile stocks in CN Market	5.1%

Stable Share Price: 002240 is not significantly more volatile than the rest of CN stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: 002240's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1997	1,765	Weijun Deng	https://en.cxlithium.com

Chengxin Lithium Group Co., Ltd. engages in the mining, production, and sale of lithium salt in China. The company is also involved in the lithium dressing; and forestry businesses. Its products are used for applications in lithium-ion battery cathode materials, energy storage, petrochemical, pharmaceutical, and other fields.

Chengxin Lithium Group Fundamentals Summary

How do Chengxin Lithium Group's earnings and revenue compare to its market cap?
2240 fundamental statistics
Market Cap	CN¥50.50b
Earnings (TTM)	CN¥1.81b
Revenue (TTM)	CN¥4.08b

27.8x

P/E Ratio

12.4x

P/S Ratio

Is 2240 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
2240 income statement (TTM)
Revenue	CN¥4.08b
Cost of Revenue	CN¥1.54b
Gross Profit	CN¥2.54b
Other Expenses	CN¥724.61m
Earnings	CN¥1.81b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.11
Gross Margin	62.19%
Net Profit Margin	44.43%
Debt/Equity Ratio	33.0%

How did 2240 perform over the long term?

See historical performance and comparison

Dividends

0.2%

Current Dividend Yield

4%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 2240 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 2240?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 2240. This is calculated by dividing 2240's market cap by their current preferred multiple.
What is 2240's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥50.50b

2240 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	12.5x
Enterprise Value/EBITDA	21.8x
PEG Ratio	0.9x

Price to Earnings Ratio vs Peers

How does 2240's PE Ratio compare to its peers?

2240 PE Ratio vs Peers

The above table shows the PE ratio for 2240 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	68.3x

Forward PE

Price-To-Earnings vs Peers: 002240 is good value based on its Price-To-Earnings Ratio (27.8x) compared to the peer average (68.3x).

Price to Earnings Ratio vs Industry

How does 2240's PE Ratio compare vs other companies in the Chinese Forestry Industry?

Price-To-Earnings vs Industry: 002240 is expensive based on its Price-To-Earnings Ratio (27.8x) compared to the CN Forestry industry average (23.6x)

Price to Earnings Ratio vs Fair Ratio

What is 2240's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

2240 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	27.8x
Fair PE Ratio	27.4x

Price-To-Earnings vs Fair Ratio: 002240 is expensive based on its Price-To-Earnings Ratio (27.8x) compared to the estimated Fair Price-To-Earnings Ratio (27.4x).

Share Price vs Fair Value

What is the Fair Price of 2240 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 002240 (CN¥58.65) is trading below our estimate of fair value (CN¥185.95)

Significantly Below Fair Value: 002240 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 002240 is good value based on its PEG Ratio (0.9x)

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Future Growth

How is Chengxin Lithium Group forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

6/6

Future Growth Score 6/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

29.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 002240's forecast earnings growth (29.5% per year) is above the savings rate (3.3%).

Earnings vs Market: 002240's earnings (29.5% per year) are forecast to grow faster than the CN market (24.1% per year).

High Growth Earnings: 002240's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 002240's revenue (51.8% per year) is forecast to grow faster than the CN market (17.6% per year).

High Growth Revenue: 002240's revenue (51.8% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 002240's Return on Equity is forecast to be high in 3 years time (31.9%)

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Past Performance

How has Chengxin Lithium Group performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

58.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 002240 has a high level of non-cash earnings.

Growing Profit Margin: 002240's current net profit margins (44.4%) are higher than last year (9.2%).

Past Earnings Growth Analysis

Earnings Trend: 002240's earnings have grown significantly by 58.6% per year over the past 5 years.

Accelerating Growth: 002240's earnings growth over the past year (848.2%) exceeds its 5-year average (58.6% per year).

Earnings vs Industry: 002240 earnings growth over the past year (848.2%) exceeded the Forestry industry -5.7%.

Return on Equity

High ROE: 002240's Return on Equity (29.3%) is considered high.

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Financial Health

How is Chengxin Lithium Group's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 002240's short term assets (CN¥4.7B) exceed its short term liabilities (CN¥2.2B).

Long Term Liabilities: 002240's short term assets (CN¥4.7B) exceed its long term liabilities (CN¥1.3B).

Debt to Equity History and Analysis

Debt Level: 002240's net debt to equity ratio (8.7%) is considered satisfactory.

Reducing Debt: 002240's debt to equity ratio has reduced from 45.3% to 33% over the past 5 years.

Debt Coverage: 002240's debt is well covered by operating cash flow (20.3%).

Interest Coverage: 002240's interest payments on its debt are well covered by EBIT (47.9x coverage).

Balance Sheet

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Dividend

What is Chengxin Lithium Group current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.17%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 002240's dividend (0.17%) isn’t notable compared to the bottom 25% of dividend payers in the CN market (0.48%).

High Dividend: 002240's dividend (0.17%) is low compared to the top 25% of dividend payers in the CN market (1.93%).

Stability and Growth of Payments

Stable Dividend: 002240 is not paying a notable dividend for the CN market, therefore no need to check if payments are stable.

Growing Dividend: 002240 is not paying a notable dividend for the CN market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: 002240 is not paying a notable dividend for the CN market.

Cash Payout to Shareholders

Cash Flow Coverage: 002240 is paying a dividend but the company has no free cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.3yrs

Average management tenure

CEO

Weijun Deng (38 yo)

2.25yrs

Tenure

CN¥1,844,300

Compensation

Mr. Weijun Deng serves as Non-Independent Director at Chengxin Lithium Group Co., Ltd. since March 15, 2018 and also serves as General Manager since March 15, 2020.

Leadership Team

Experienced Management: 002240's management team is considered experienced (4.3 years average tenure).

Board Members

Experienced Board: 002240's board of directors are not considered experienced ( 2 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 15.5%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/25 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31