Breaking Down China National Chemical Engineering Co., Ltd Financial Health: Key Insights for Investors

Investors scrutinizing China National Chemical Engineering Co., Ltd. (601117.SS) will find a mixed but data-rich picture: Q3 2025 revenue of CNY 45.42 billion and trailing twelve months revenue of CNY 187.54 billion underpin steady top-line growth, while a market capitalization of CNY 45.74 billion and a share price of CNY 7.49 (12 Dec 2025) frame a valuation view that includes a trailing P/E around 7.85; profitability metrics show a TTM net income of CNY 6.08 billion with a net profit margin of 3.24% and ROE of 9.31%, the balance sheet carries total debt of CNY 12.85 billion against shareholders' equity of CNY 65.53 billion and a net cash position of CNY 26.93 billion, liquidity includes CNY 39.79 billion in cash and a working capital of CNY 22.99 billion but an Altman Z-Score of 1.42 raises short-term solvency questions even as forward-looking forecasts point to mid-single-digit revenue and earnings growth and new overseas contracts of CNY 53.65 billion-read on to unpack what these figures mean for risk, valuation, and potential upside.

China National Chemical Engineering Co., Ltd (601117.SS) - Revenue Analysis

China National Chemical Engineering Co., Ltd (601117.SS) has shown modest top-line growth through 2024-Q3 2025, with scale and valuation metrics that matter for investor assessment.

• Top-line trend: steady low-single-digit growth (Q3 2025 +4.32%; TTM +3.34%).
• Scale vs. market value: CNY 187.54B TTM revenue vs CNY 45.74B market cap → P/S 0.24 suggests market pricing in low margins, higher risk, or limited growth expectations.
• Productivity: CNY 3.68M revenue per employee indicates capital- and labor-intensive operations typical for large EPC/engineering contractors.

Key quantitative takeaways for investors include the absolute revenue run-rate, the slow but positive growth trajectory, and a valuation that implies conservatism from equity markets. For corporate background and broader context, see China National Chemical Engineering Co., Ltd: History, Ownership, Mission, How It Works & Makes Money

China National Chemical Engineering Co., Ltd (601117.SS) - Profitability Metrics

• Net income (TTM): CNY 6.08 billion - net profit margin: 3.24%
• Operating margin (TTM): 3.66% - reflects core business profitability before financing and taxes
• EBITDA margin (TTM): 4.28% - indicates operating cash-generation capacity
• Gross profit margin: 10.21% - buffer between revenue and cost of goods sold
• Return on equity (ROE): 9.31% - effective use of shareholders' equity
• Earnings per share (EPS, TTM): CNY 0.99 - P/E ratio: 7.53
• Dividend yield: 2.64% - annual dividend per share: CNY 0.20

• Profitability context: gross margin of 10.21% provides a reasonable cushion for cost fluctuations, while the narrower operating and net margins indicate pressure from SG&A, financing, or tax items.
• Capital efficiency: ROE at 9.31% suggests the company generates moderate returns for equity holders relative to peers in capital-intensive engineering and construction sectors.
• Shareholder return: EPS of CNY 0.99 with a P/E of 7.53 implies the market prices the stock at a relatively low earnings multiple; dividend yield of 2.64% adds steady cash return.

China National Chemical Engineering Co., Ltd (601117.SS) - Debt vs. Equity Structure

• Low leverage: Debt-to-equity of 0.18 implies only CNY 0.18 of debt per CNY 1 of equity, reducing solvency risk.
• Strong liquidity buffer: Net cash of CNY 26.93 billion provides flexibility for capex, M&A or downturns.
• Robust interest coverage: 22.24x indicates operating earnings comfortably cover interest expenses from current operations.
• Working capital posture: Current ratio 1.15 supports short-term obligations; quick ratio 0.93 flags modest reliance on inventories.

China National Chemical Engineering Co., Ltd (601117.SS) - Liquidity and Solvency

• Cash & cash equivalents: CNY 39.79 billion - substantial liquid reserve for short-term needs and opportunistic deployment.
• Working capital: CNY 22.99 billion - positive working capital signaling ability to meet current liabilities from short-term assets.
• Operating cash flow (TTM): CNY 3.26 billion - recurring cash generation from operations.
• Free cash flow (TTM): CNY 613.40 million - net cash available after capital expenditure, indicating limited but positive discretionary cash.
• Net cash per share: CNY 4.41 - a per-share measure reflecting a strong cash position relative to outstanding shares.
• Altman Z-Score: 1.42 - below the 3.0 safe threshold, implying elevated bankruptcy risk relative to healthier firms.
• Piotroski F-Score: 4 - moderate financial strength; mixed signals across profitability, leverage/liquidity, and operational efficiency.

• Liquidity: ample cash balance and positive working capital support operational continuity and liquidity-driven opportunities.
• Cash generation: positive operating cash flow and free cash flow confirm the core business generates cash, though free cash flow margin is limited.
• Solvency risk: the Altman Z-Score of 1.42 flags higher relative bankruptcy risk - leverage structure, profitability consistency, and asset quality merit close monitoring.
• Quality of earnings and balance-sheet trends: Piotroski F-Score of 4 reflects mixed fundamentals; improvements in profitability, leverage reduction, or stronger accruals could lift the score.

China National Chemical Engineering Co., Ltd (601117.SS) - Valuation Analysis

Key valuation metrics for China National Chemical Engineering Co., Ltd (601117.SS) point to a stock trading at materially low multiples relative to earnings, book value and sales, implying potential undervaluation against peers and historical norms.

• Trailing P/E: 7.85 - low absolute multiple, suggests earnings-based valuation is inexpensive.
• Forward P/E: 7.29 - forward earnings market expects similar low multiple to persist.
• Price-to-Book (P/B): 0.65 - market value below net asset book value.
• EV/EBITDA: 3.29 - conservative enterprise valuation versus operating cash-profit.
• PEG: 0.61 - price relative to growth indicates undervaluation when factoring expected earnings growth.
• EV/Revenue: 0.14 - very low enterprise value relative to sales, signaling cheap revenue multiple.
• Price-to-Sales (P/S): 0.25 - market cap very modest versus top-line.

Contextual considerations for investors:

• Low P/E and P/B multiples can reflect either undervaluation or underlying operational/market risks; cross-check with profitability margins, leverage and cash flow stability.
• EV/EBITDA of 3.29 suggests acquisition-like valuation; assess capital structure and non-operating items that affect enterprise value.
• PEG of 0.61 favors valuation adjusted for growth; verify the quality and sustainability of projected earnings growth.

Further background on the company's business model, history and ownership can be found here: China National Chemical Engineering Co., Ltd: History, Ownership, Mission, How It Works & Makes Money

China National Chemical Engineering Co., Ltd (601117.SS) - Risk Factors

Investors evaluating China National Chemical Engineering Co., Ltd (601117.SS) should weigh several quantifiable risk metrics and industry exposures. Below are the primary risk considerations, supported by key financial indicators and their immediate implications for creditworthiness, liquidity, profitability and operational stability.

• Solvency concern: Altman Z-Score of 1.42 places the company in a zone associated with distress, indicating creditors and investors should monitor cash flows and near-term maturities closely.
• Operational fundamentals: A Piotroski F-Score of 4 signals only moderate quality in profitability, leverage, liquidity and operating efficiency metrics-some historic improvements offset by current weaknesses.
• Leverage profile: Debt-to-equity of 0.18 minimizes interest burden but may constrain the firm's ability to fund large, capital-intensive projects without external financing or equity issuance.
• Liquidity risk: Quick ratio at 0.93 is shy of the conservative 1.0 threshold, which could be problematic if receivables slow or working capital demands surge.
• Profitability sensitivity: Net profit margin of 3.24% provides limited cushion for margin compression from rising input costs, contract delays, or pricing pressure.
• Market exposure: Heavy involvement in construction and chemical engineering links revenues to cyclical investment cycles, commodity prices and regulatory changes.

Key scenarios investors should model:

• Downturn scenario: modest revenue decline (10-20%) combined with 100-200 bps margin compression could push operating cash flow negative given thin net margins and quick ratio vulnerability.
• Capex-intensive growth: funding major EPC projects would likely require external debt or equity given low D/E, potentially diluting returns or increasing leverage.
• Working capital stress: extended receivable days or payment delays from large clients can raise short-term liquidity strain due to sub-1 quick ratio.

Suggested monitoring items for investors (operational and market signals):

• Quarterly cash flow from operations vs. reported net income (convergence/divergence).
• Receivables turnover and days sales outstanding (trend for collection risk).
• Order backlog composition and contract concentration by client and region.
• Changes in capital spending plans and announced financing (debt issuances or equity raises).
• Commodity input price trends and regulatory developments in chemical/construction sectors.

For broader context on investor composition and recent buying trends related to this issuer, see: Exploring China National Chemical Engineering Co., Ltd Investor Profile: Who's Buying and Why?

China National Chemical Engineering Co., Ltd (601117.SS) - Growth Opportunities

China National Chemical Engineering Co., Ltd (601117.SS) shows multiple vectors for growth supported by quantified forecasts, project pipelines and strategic investments.

• Analyst consensus: earnings growth forecast at 8.0% p.a. and revenue growth at 7.3% p.a.
• EPS momentum: EPS expected to rise by 8.2% p.a. over the next three years.
• Profitability improvement: ROE projected to reach 9.3% in three years, up from current levels.
• International expansion: new overseas contracts totaling CNY 53.65 billion provide immediate revenue visibility and geographic diversification.
• Capex & infrastructure pipeline: ongoing investments in infrastructure and environmental projects expected to sustain mid-term revenue streams.
• R&D focus: sustained spending on technological research and development aimed at process innovation and potential market leadership in specialized engineering services.

Key investor considerations include the pace of contract execution from the CNY 53.65 billion overseas backlog, capital allocation to infrastructure and environmental projects, and the translation of R&D investments into profitable, scalable services or technologies. For strategic and cultural context, see: Mission Statement, Vision, & Core Values (2026) of China National Chemical Engineering Co., Ltd.