Zhongguancun ScienceTech Leasing Co Ltd reported a highly atypical QQ4 2024 outcome driven by a large, non-operating income item that obscures a weak core operating performance. Revenue and gross profit for Q4 alone were negative (-79.58 million CNY), and operating income was deeply negative (-285.97 million CNY). The positive pre-tax result (75.74 million CNY) and net income (56.83 million CNY) were largely the result of substantial other income and non-cash items totaling 361.71 million CNY, which dwarfed operating losses. Management commentary, if any, is not provided in the dataset, limiting visibility into the drivers behind the one-off or non-operating gains.
From a balance sheet and cash-flow standpoint, the group carries meaningful leverage and a negative free cash flow profile. Total debt stands at 3.37 billion CNY with net debt of 2.53 billion CNY, and cash and cash equivalents of 841.0 million CNY. Operating cash flow was negative at -919.4 million CNY reflecting a sizable working-capital impact (change in working capital -437.5 million CNY; other working-capital items -437.5 million CNY) and large non-cash charges. Despite a negative cash-flow from operations, financing activity generated a sizable positive cash impact (approximately +999.5 million CNY), aided by debt-related activities, dividend payments (206.6 million CNY), and other financing flows. The quarterly trajectory shows a dramatic swing: Q3 2024 revenue of 347.5 million CNY followed by Q4 2024 revenue of -79.6 million CNY, signaling volatility in core lending/leasing activity.
Valuation metrics imply the stock trades at a modest price-to-book (P/B around 0.40) and a near-market P/E in the low single digits (~4.6x), suggesting some upside optionality if core profitability improves or if non-operating gains prove sustainable. However, the combination of negative free cash flow, sizable long-term leverage, and a lack of visible quarterly earnings call commentary warrants a cautious stance. The stock’s performance will hinge on stabilizing core operating performance, reducing reliance on non-operating inflows, and strengthening balance-sheet resilience amid a competitive and evolving Chinese financial-services landscape.