Luoyang Bearing Science & Technology Co., Ltd. relative valuation is now NEUTRAL. It was previously rated OVERVALUED, and has a fundamental analysis score of 69.

Our analysis is based on comparing Luoyang Bearing Science & Technology Co., Ltd. with the following peers – Tianma Bearing Group Co., Ltd. Class A, Baota Industry Co., Ltd. Class A, Xiangyang Automobile Bearing Co., Ltd. Class A, Fujian Longxi Bearing (Group) Co., Ltd. Class A and Wafangdian Bearing Co., Ltd. Class B (002122-CN, 000595-CN, 000678-CN, 600592-CN and 200706-CN).

Luoyang Bearing Science & Technology Co., Ltd. is currently neutrally valued, as its previous close of CNY 9.09 lies within the CapitalCube estimate range of CNY 6.89 to CNY 10.70. Over the last 52 week period, Luoyang Bearing Science & Technology Co., Ltd. has fluctuated between CNY 8.97 and CNY 16.60.

Company Overview

• Compared to peers, relative underperformance last month is down from a median performance last year.

• It’s current Price/Book of 2.37 is about median in its peer group.

• 002046-CN outperforms its peers with a relatively high operating performance and the market also expects faster growth relative to its peers

• 002046-CN’s relatively high profit margins are burdened by relative asset inefficiency.

• Changes in annual earnings (relative to peers) are better than the change in its revenues (relative to peers), implying the company is focused more on earnings.

• 002046-CN’s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.

• The company’s relatively high gross and pre-tax margins suggest a differentiated product portfolio and tight control on operating costs relative to peers.

• While 002046-CN’s revenues have increased slower than peer median, the market currently gives the company a higher than peer median P/E ratio and may be factoring in some sort of a strategic play.

• The company’s capital investment program and to-date returns suggest that the company is likely making big bets on the future.

• 002046-CN’s operating performance may not allow it to raise additional debt.

Investment Outlook

Luoyang Bearing Science & Technology Co., Ltd. has a fundamental score of 69 and has a relative valuation of NEUTRAL.

Luoyang Bearing Science & Technology Co., Ltd.’s price is very close to its implied price, thus not allowing for a specific classification into the Value – Price Matrix.

002046-CN has an Outperforming profile relative to peers.

002046-CN achieved a better operating performance than the median of its chosen peers (ROE of 3.54% compared to the peer median ROE of 2.57%) and the market still expects faster growth from it than from those peers (P/E of 68.12 compared to peer median of 56.53).

The company’s current Price/Book of 2.37 is about median in its peer group.

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