Breaking Down Zhejiang Dahua Technology Co., Ltd. Financial Health: Key Insights for Investors

Facing a pivotal moment for investors, Zhejiang Dahua Technology's latest figures mix stability and strain: 2024 revenue held steady at 32.18 billion yuan while net income plunged to 2.91 billion yuan - a dramatic 61% year-over-year decline; yet valuation and balance-sheet metrics add nuance with a P/E of 17.78, a conservative debt-to-equity ratio of 0.28 and short-term liquidity shown by a current ratio of 2.5; dive into the full analysis to see how revenue trends, improving quarterly EPS, analyst 2025 revenue forecasts, cash-flow swings and geopolitical risks reshape the investment case.

Zhejiang Dahua Technology Co., Ltd. (002236.SZ) - Revenue Analysis

• Fiscal 2024 revenue: 32.18 billion yuan (vs. 32.22 billion yuan in 2023)
• TTM revenue (Jun 2025): 32.496 billion yuan; latest quarterly revenue: 2.75 billion yuan
• 1Q2025 revenue: 6.26 billion yuan, +1.22% YoY
• Analyst 2025 revenue forecast: 33.8 billion yuan (+4.7% vs. 2024)
• Revenue per share: declining over past three years with average annual change of -3.70%
• 10-year average revenue growth: 14.20% per year (historical trajectory)

Zhejiang Dahua Technology Co., Ltd. (002236.SZ) - Profitability Metrics

• Net income (2024): 2.91 billion yuan - down 61.0% from 7.36 billion yuan in 2023.
• Q3 2025 net income: 1.06 billion yuan - up 44.12% year-over-year, indicating a rebound in quarterly earnings.
• EPS (Q3 2025): 0.33 yuan - up 43.48% YoY.
• Trailing twelve months (TTM) net profit margin: 8.95%.
• Return on assets (ROA): 5.02%; Return on capital: 6.55%.
• Earnings yield: 5.63%; Price-to-earnings (P/E) ratio: 17.78.

• Drivers of the 2024 earnings decline likely include one-time charges, margin pressure, and market headwinds that pushed net income down from 7.36 billion to 2.91 billion CNY.
• Q3 2025 improvements (1.06 billion CNY net income; EPS +43.48%) point to operational recovery and higher margin conversion, supported by an 8.95% TTM net margin.
• ROA of 5.02% and return on capital of 6.55% suggest moderate efficiency in asset and capital deployment, leaving room for improvement versus higher-return peers.
• Valuation measures (P/E 17.78; earnings yield 5.63%) imply the market is pricing Dahua at a moderate premium relative to current earnings, while allowing upside if profitability normalizes further.

Zhejiang Dahua Technology Co., Ltd. (002236.SZ) - Debt vs. Equity Structure

Key balance-sheet metrics for Zhejiang Dahua Technology Co., Ltd. show a conservative capital structure dominated by equity, manageable leverage and improving operating cash flow trends.

• Total assets (Q1 2025): 50.5 billion yuan
• Total liabilities (Q1 2025): 13.8 billion yuan
• Equity attributable to shareholders (Q1 2025): 36.74 billion yuan
• Debt-to-equity ratio (Q1 2025): ~0.28
• Equity ratio (Equity / Total assets): ~72.9%

Interpretation of these figures in practical terms:

• The 0.28 debt-to-equity ratio and 72.9% equity ratio point to a low-leverage, equity-heavy balance sheet that reduces default risk and interest burden.
• A decline in long-term debt from 1.25 billion yuan (2024) to 850 million yuan (2025) signals active debt reduction or maturities being paid down rather than rolled over.
• Negative operating cash flow of -671.7 million yuan in Q1 2025 is a concern in isolation, but the 48.59% year-over-year improvement indicates better cash conversion and operational cash management.
• Net financing outflow of 304.62 million yuan in Q3 2025 suggests the company is reducing external financing, consistent with deleveraging and reliance on internal resources.

For context on strategic direction and values that accompany this financial positioning, see Mission Statement, Vision, & Core Values (2026) of Zhejiang Dahua Technology Co., Ltd.

Zhejiang Dahua Technology Co., Ltd. (002236.SZ) - Liquidity and Solvency

Key short-term and long-term solvency metrics for Zhejiang Dahua Technology Co., Ltd. (002236.SZ) point to a solid financial footing, with ample liquidity to cover obligations and comfortable interest-servicing capacity.

• Current ratio: ~2.5 - indicates good short-term liquidity (current assets comfortably exceed current liabilities).
• Quick ratio: ~1.8 - shows sufficient liquid assets after excluding inventory.
• Net working capital: ¥19.5 billion - current assets minus current liabilities, supporting operational needs and flexibility.

• Operational implication: a ~60-day cash conversion cycle means working capital is tied up for about two months; with a robust net working capital and liquidity ratios, the company can fund that cycle without undue strain.
• Debt service: an interest coverage of 5.2 offers a margin of safety for interest payments, reducing refinancing risk in normal conditions.
• Long-term safety: a solvency ratio of 3.7 suggests assets considerably exceed liabilities, supporting creditor and investor confidence.

For broader corporate context and strategic orientation, see Mission Statement, Vision, & Core Values (2026) of Zhejiang Dahua Technology Co., Ltd.

Zhejiang Dahua Technology Co., Ltd. (002236.SZ) - Valuation Analysis

• Price-to-Earnings (P/E): 17.78 - implies moderate investor expectations for future earnings growth relative to current profits.
• Price-to-Book (P/B): 1.81 - the stock trades at 1.81x book value, indicating a premium above net asset value but not an extreme multiple.
• Market Capitalization: ≈ ¥69.43 billion - positions the company as a mid-to-large cap within its sector.
• Dividend Yield: 3.06% - provides a reliable income component to total shareholder return.
• Earnings Yield: 5.63% - the inverse of P/E, signaling the earnings return relative to price.
• Return on Equity (ROE): 10.9% - indicates solid profitability and efficiency in using shareholder equity.

Zhejiang Dahua Technology Co., Ltd. (002236.SZ) - Risk Factors

• U.S. trade blacklist (2019): Zhejiang Dahua Technology has been on the U.S. Entity List since 2019 for alleged involvement in surveillance activities in Xinjiang, creating ongoing export controls, restricted access to U.S. technologies, and reputational/legal risks for international customers and partners.
• Exit from Xinjiang projects (Dec 2024): The company announced it would exit five projects in Xinjiang in December 2024, which may reduce regional revenue, disrupt installed-base service contracts, and shift sales mix toward potentially lower-margin markets.
• Profitability deterioration (2024): Net income declined 61% in 2024 versus 2023, signaling material pressure on margins, cost structure, or one-off impairments that materially weaken earnings power.
• Declining revenue per share: Revenue per share has fallen over the past three years, with an average annual growth rate of -3.70%, indicating revenue generation struggles relative to share count and potential dilution or stagnant sales.
• Liquidity concerns (Q1 2025): Net cash flow from operating activities was negative in Q1 2025, raising short-term liquidity and working-capital questions if the trend persists.
• Capital structure conservatism: Debt-to-equity ratio of 0.28 suggests low leverage, which reduces solvency risk but may also reflect constrained ability or willingness to use debt for growth or strategic investments.

• Operational risk drivers: potential contract cancellations, supply-chain limits from restricted technology access, increased compliance costs, and slower international sales momentum.
• Financial risk drivers: continued EBITDA pressure from lower net income, reduced cash generation in early 2025, and the need to balance conservative leverage with investments to stabilize revenue.
• Strategic risk drivers: repositioning after Xinjiang exits could require reallocating sales and service resources, impacting short- to medium-term growth and margins.

Zhejiang Dahua Technology Co., Ltd. (002236.SZ) - Growth Opportunities

• Analysts project 2025 revenue of 33.8 billion yuan, a 4.7% increase year-over-year - signaling modest revenue growth driven by product mix, overseas expansion and software services.
• Consensus EPS growth is estimated at 7.8% per annum, implying improving margins or operating leverage over the coming years.
• Return on equity (ROE) is forecast to reach 10.9% in three years, indicating potential for enhanced shareholder value through more efficient capital use.
• Market capitalization stands at approximately 69.43 billion yuan, reflecting mid-cap scale with room for expansion via organic growth and strategic initiatives.
• Dividend yield of 3.06% offers income-focused investors a steady cash return component in addition to capital appreciation potential.
• Earnings yield of 5.63% suggests a reasonable income return relative to current market price, supporting value-oriented allocation.

• Strategic levers to support these forecasts: expanding software and services revenue, deeper penetration in overseas markets, and margin recovery through product mix optimization.
• Risks to monitor relative to growth expectations: supply-chain fluctuations, competitive pricing pressure, and regulatory shifts in key markets.