China Foods Limited
China Foods Limited Fundamental Analysis
China Foods Limited (0506.HK) shows moderate financial fundamentals with a PE ratio of 10.65, profit margin of 3.91%, and ROE of 12.69%. The company generates $21.9B in annual revenue with weak year-over-year growth of 0.21%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 42.4/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze 0506.HK's fundamental strength across five key dimensions:
Efficiency Score
Weak0506.HK struggles to generate sufficient returns from assets.
Valuation Score
Excellent0506.HK trades at attractive valuation levels.
Growth Score
Weak0506.HK faces weak or negative growth trends.
Financial Health Score
Excellent0506.HK maintains a strong and stable balance sheet.
Profitability Score
Weak0506.HK struggles to sustain strong margins.
Key Financial Metrics
Is 0506.HK Expensive or Cheap?
P/E Ratio
0506.HK trades at 10.65 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, 0506.HK's PEG of -3.87 indicates potential undervaluation.
Price to Book
The market values China Foods Limited at 1.32 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.95 times EBITDA. This is generally considered low.
How Well Does 0506.HK Make Money?
Net Profit Margin
For every $100 in sales, China Foods Limited keeps $3.91 as profit after all expenses.
Operating Margin
Core operations generate 8.58 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $12.69 in profit for every $100 of shareholder equity.
ROA
China Foods Limited generates $4.66 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
China Foods Limited produces operating cash flow of $3.09B, showing steady but balanced cash generation.
Free Cash Flow
China Foods Limited generates strong free cash flow of $2.37B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.85 in free cash annually.
FCF Yield
0506.HK converts 25.94% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
10.65
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-3.87
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.32
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.42
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.010
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.09
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.13
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.17
vs 25 benchmark
How 0506.HK Stacks Against Its Sector Peers
| Metric | 0506.HK Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 10.65 | 22.46 | Better (Cheaper) |
| ROE | 12.69% | 1260.00% | Weak |
| Net Margin | 3.91% | -5313.00% (disorted) | Weak |
| Debt/Equity | 0.01 | 0.84 | Strong (Low Leverage) |
| Current Ratio | 1.09 | 2.49 | Neutral |
| ROA | 4.66% | -193380.00% (disorted) | Weak |
0506.HK outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews China Foods Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
25.16%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
105.97%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
49.75%
Industry Style: Defensive, Dividend, Low Volatility
High Growth