A Look At Changmao Biochemical Engineering Company Limited’s (HKG:954) Exceptional Fundamentals

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Changmao Biochemical Engineering Company Limited (HKG:954) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of 954, it is a company with great financial health as well as a an impressive history of performance. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my broad commentary, take a look at the report on Changmao Biochemical Engineering here.

Flawless balance sheet with proven track record

954 delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. Not only did 954 outperformed its past performance, its growth also surpassed the Chemicals industry expansion, which generated a 24% earnings growth. This is an notable feat for the company. 954’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. 954’s has produced operating cash levels of 1.13x total debt over the past year, which implies that 954’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

SEHK:954 Income Statement, June 20th 2019
SEHK:954 Income Statement, June 20th 2019

Next Steps:

For Changmao Biochemical Engineering, I’ve put together three essential aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for 954’s future growth? Take a look at our free research report of analyst consensus for 954’s outlook.
  2. Valuation: What is 954 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 954 is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 954? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.