Executive Summary
Diwang Industrial Holdings Limited reported QQ3 2024 revenue of 137.323 million CNY with a gross margin of 42.83%, delivering EBITDA of 7.863 million CNY and net income of 4.747 million CNY. The quarter marked a revenue decline versus the prior year and prior quarter, but profitability improved on a quarterly basis due to operating leverage and cost discipline. The company maintained a solid balance sheet with ample liquidity, a robust current ratio of 3.58, and a modest net debt position, while free cash flow remained negative as ongoing capital expenditure and working-capital adjustments weighed on cash generation.
Key takeaways for investors are a) margin resilience in a cyclicalsensitive sector, b) improving operating income despite top-line softness, c) a healthy liquidity cushion and conservative leverage, and d) a valuation that appears inexpensive on earnings and book-value metrics relative to nearby peers, albeit with execution and growth uncertainties in a challenging macro backdrop.
Key Performance Indicators
QoQ: -5.89% | YoY:-13.92%
QoQ: -15.77% | YoY:-3.19%
QoQ: -72.39% | YoY:130.67%
QoQ: -53.78% | YoY:200.83%
QoQ: -53.85% | YoY:191.67%
Key Insights
Revenue: 137.323 million CNY in QQ3 2024, YoY -13.92%, QoQ -5.89%. Gross Profit: 58.8185 million CNY, Gross Margin: 42.83%, YoY Gross Profit change -3.19%, QoQ -15.77%.
Operating metrics: EBITDA 7.863 million CNY, EBITDA margin 5.73%; Operating Income 2.7785 million CNY, Operating Margin 2.02%; Net Income 4.7465 million CNY, Net Margin 3.46%.
Earnings: EPS 0.0066 CNY, Diluted EPS 0.0066 CNY; Weighted average shares 720,039,441.
Cash flow and capital expenditure: Net cash provided by operatin...
Financial Highlights
Revenue: 137.323 million CNY in QQ3 2024, YoY -13.92%, QoQ -5.89%. Gross Profit: 58.8185 million CNY, Gross Margin: 42.83%, YoY Gross Profit change -3.19%, QoQ -15.77%.
Operating metrics: EBITDA 7.863 million CNY, EBITDA margin 5.73%; Operating Income 2.7785 million CNY, Operating Margin 2.02%; Net Income 4.7465 million CNY, Net Margin 3.46%.
Earnings: EPS 0.0066 CNY, Diluted EPS 0.0066 CNY; Weighted average shares 720,039,441.
Cash flow and capital expenditure: Net cash provided by operating activities 25.2965 million CNY; Capital expenditure (CAPEX) 26.635 million CNY; Free cash flow -1.3385 million CNY. Operating cash flow yield and free cash flow remain pressured by working capital movements and ongoing capex.
Balance sheet and liquidity: Total assets 827.684 million CNY; Total liabilities 158.94 million CNY; Total stockholders’ equity 644.094 million CNY. Cash and cash equivalents 54.726 million CNY; total cash and short-term investments 60.698 million CNY. Net debt 10.237 million CNY. Current ratio 3.58; Inventory 44.678 million CNY; Accounts receivable 241.274 million CNY; Accounts payable 70.283 million CNY. Debt remains modest (Debt to Equity ~0.101x) and liquidity is robust, supporting working-capital needs and ongoing capex.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
137.32M |
-13.92% |
-5.89% |
| Gross Profit |
58.82M |
-3.19% |
-15.77% |
| Operating Income |
2.78M |
130.67% |
-72.39% |
| Net Income |
4.75M |
200.83% |
-53.78% |
| EPS |
0.01 |
191.67% |
-53.85% |
Key Financial Ratios
operatingProfitMargin
2.02%
Management Commentary
Earnings transcript: Not provided in the dataset. No management quotes or call transcripts were supplied for QQ3 2024. Implication for the analysis: the quantitative results are used to form conclusions, but qualitative insights from management cannot be cited here. If a transcript becomes available, we will integrate management commentary on demand trends, capacity utilization, cost control measures, and guidance.
Forward Guidance
Management commentary for QQ3 2024 did not include explicit targets in the provided data. Given the quarter’s revenue softness but margin resilience, the potential revenue drivers include: (1) continued demand for specialty coating agents and resins in PRC, Mexico, Turkey, and Vietnam; (2) productivity gains and cost controls improving operating leverage; (3) potential stabilization or gradual improvement in customer demand as macro conditions stabilize. Risks to watch include: raw material cost volatility, FX fluctuations affecting cross-border sales, competition in the chemicals segment, and any delays in capex plans that would affect growth. Based on the data, a cautious to constructive stance is warranted: margin stability around mid-40s gross margin with gradual top-line recovery could unlock improved profitability if working-capital efficiency improves and capex drives incremental capacity utilization. Investors should monitor: (a) trend in revenue QoQ entering Q4 and 2025, (b) working capital dynamics (receivables days, inventory days), (c) feedback on order visibility and customer concentration, and (d) any management updates on guidance or long-term capital allocation.