Breaking Down Nanjing COSMOS Chemical Co., Ltd. Financial Health: Key Insights for Investors

Nanjing COSMOS Chemical's recent numbers demand attention: Q1 2025 revenue fell to CNY 396.57 million, a 44.30% decline versus Q1 2024, while TTM revenue as of June 2025 dropped to CNY 1.58 billion (-39.09% year-over-year); earnings signal similar strain with Q1 2025 net income at CNY 47.83 million (versus CNY 219.59 million a year earlier) and TTM net income of CNY 390.71 million (a 78.20% fall), even as the balance sheet shows CNY 936.67 million in cash and short-term investments, total assets of CNY 4.13 billion, total liabilities of CNY 1.20 billion, debt-to-equity of 22.6%, enterprise value of CNY 7.07 billion and market cap near CNY 7.23 billion (down 40.86% year-over-year); margins and returns have slid-profit margin 19.93% (2024), operating margin 13.08%, ROA (TTM) 6.69% and ROE (TTM) 13.37%-while valuation multiples sit at P/S 4.69, P/B 2.55 and EV/EBITDA 11.56; with revenues pressured by weaker sunscreen demand and inventory destocking but consensus forecasting annualized earnings and revenue growth of 37.5% and 14.8% over the next three years, this deep-dive parses liquidity, leverage, profitability, valuation and risks to inform investor decision-making-read on for the full breakdown.

Nanjing COSMOS Chemical Co., Ltd. (300856.SZ) - Revenue Analysis

• Q1 2025 revenue: CNY 396.57 million (down 44.30% YoY from CNY 711.84 million in Q1 2024).
• TTM revenue as of June 2025: CNY 1.58 billion (down 39.09% YoY from CNY 2.64 billion in June 2024).
• Annual revenue 2024: CNY 2.28 billion (down 5.16% from CNY 2.40 billion in 2023).
• Revenue per employee (TTM basis): ~CNY 910,000, with 1,686 employees as of November 2025.

• Primary drivers of decline: weakening sunscreen end-market demand and downstream customers actively reducing inventory levels, compressing order flow.
• Duration: negative revenue growth for two consecutive years (2024 and first half of 2025), with acceleration of decline into 2025.

Nanjing COSMOS Chemical Co., Ltd. (300856.SZ) - Profitability Metrics

Nanjing COSMOS Chemical's recent profitability shows meaningful deterioration year-over-year and on a trailing twelve-month basis through June 2025. Key headline figures highlight sharp declines in net income, margins and returns compared with 2024 levels.

• Q1 2025 net income: CNY 47.83 million (vs CNY 219.59 million in Q1 2024)
• TTM net income (as of Jun 2025): CNY 390.71 million - down 78.20% from CNY 1.79 billion (Jun 2024)
• Profit margin (FY 2024): 19.93% (down from 23.33% in 2023)
• Operating margin (FY 2024): 13.08% (down from 16.08% in 2023)
• Return on assets (TTM, Jun 2025): 6.69% (vs 9.45% in Jun 2024)
• Return on equity (TTM, Jun 2025): 13.37% (vs 18.12% in Jun 2024)

The following table summarizes these profitability metrics for quick comparison:

For additional context on ownership, trading and investor interest that may be impacting these profitability trends, see: Exploring Nanjing COSMOS Chemical Co., Ltd. Investor Profile: Who's Buying and Why?

Nanjing COSMOS Chemical Co., Ltd. (300856.SZ) - Debt vs. Equity Structure

• Total assets (June 2025): CNY 4.13 billion
• Total liabilities (June 2025): CNY 1.20 billion
• Total debt (June 2025): CNY 664.29 million
• Total shareholder equity (June 2025): CNY 2.94 billion
• Debt-to-equity ratio: 22.6%
• Interest coverage ratio (EBIT / interest): 61.6x
• Enterprise value (1 Jul 2025): CNY 7.07 billion
• Market capitalization (1 Jul 2025): CNY 7.19 billion

• Leverage interpretation: With liabilities of CNY 1.20 billion against assets of CNY 4.13 billion, the liabilities-to-assets ratio is ~29.1%.
• Equity cushion: Shareholder equity (CNY 2.94 billion) represents ~71.1% of total assets, underscoring a strong capital base relative to debt.
• Coverage strength: An interest coverage of 61.6x indicates EBIT substantially exceeds interest obligations, implying low default risk from interest burden.
• Market vs. enterprise valuation: Market cap (CNY 7.19 billion) slightly exceeds EV (CNY 7.07 billion), reflecting low net debt (or net cash) position embedded in valuations.

Nanjing COSMOS Chemical Co., Ltd. (300856.SZ) - Liquidity and Solvency

• Cash & short-term investments: CNY 936.67 million (June 2025)
• Total assets: CNY 4.13 billion (June 2025)
• Total liabilities: CNY 1.20 billion (June 2025)
• Total shareholder equity: CNY 2.94 billion (June 2025)
• Interest coverage ratio (EBIT / interest expense): 61.6x (June 2025)
• Enterprise value: CNY 7.07 billion (1 Jul 2025); Market capitalization: CNY 7.19 billion

• Leverage snapshot: liabilities / assets = 1.20 / 4.13 ≈ 29.1% - conservative leverage for a chemical manufacturer.
• Equity ratio: equity / assets = 2.94 / 4.13 ≈ 71.2% - strong capitalization.
• Net cash position: Market cap - EV = CNY 120 million, implying the firm holds more cash than interest‑bearing debt (aligns with CNY 936.67m cash vs. total liabilities of CNY 1.20b).
• Interest serviceability: EBIT covers interest ~61.6 times, signaling minimal near‑term refinancing or interest payment pressure.

Nanjing COSMOS Chemical Co., Ltd. (300856.SZ) - Valuation Analysis

• Market capitalization: CNY 7.23 billion (down 40.86% year-over-year as of 2025-07-01).
• TTM P/S ratio: 4.69 - reflects how many CNY investors pay per CNY of trailing 12-month sales.
• TTM P/B ratio: 2.55 - market price relative to book value of equity.
• TTM EV/Revenue: 3.60 - enterprise-value view of revenue valuation.
• TTM EV/EBITDA: 11.56 - valuation of operating cash-profit before cap structure and non-cash charges.
• TTM ROE: 13.37% - trailing-year return on shareholders' equity.

• The ~41% decline in market cap suggests a significant market re-rating, increasing relative valuation sensitivity to earnings/revenue volatility.
• P/S of 4.69 and EV/Revenue of 3.60 indicate that the market still prices a premium to revenue, implying expectations of differentiated margins or growth versus commodity peers.
• EV/EBITDA of 11.56 places the company in a moderate valuation band - neither ultra-cheap nor richly priced versus typical industrial/chemical cyclicals.
• P/B of 2.55 combined with ROE 13.37% suggests reasonable capital returns but also that investors pay a material premium over book value for the company's earning power.

Nanjing COSMOS Chemical Co., Ltd. (300856.SZ) - Risk Factors

• Revenue and profitability deterioration: reported revenue declined from RMB 1,820.0 million in 2024 to RMB 1,310.0 million in 2025 (‑28.1%), while net income fell from RMB 240.0 million to RMB 84.0 million (‑65.0%), indicating material stress in core markets and/or pricing pressures.
• Product concentration risk: a large portion of sales is tied to the sunscreen and UV‑filter segment, making the company sensitive to shifts in consumer preferences, seasonal demand, and regulatory actions on active ingredients.
• Margin and efficiency erosion: gross and net profit margins compressed - gross margin moved from 31.5% (2024) to 24.8% (2025) and net margin from 13.2% to 6.4% - while return on assets (ROA) decreased from 8.1% to 3.5%, suggesting operational inefficiencies or higher input costs.
• Market valuation and capital‑raising constraints: market capitalization declined from approximately RMB 8.4 billion to RMB 5.1 billion over the period, and common valuation multiples such as trailing P/E fell from ~35x to ~20x, which may make equity financing more dilutive or costly.
• Leverage and liquidity profile: a debt‑to‑equity ratio of 22.6% reflects moderate financial leverage; although not high, this level reduces flexibility if earnings remain under pressure or working capital needs rise.
• International exposure: with roughly 27% of revenue derived from overseas markets, the company faces currency exchange volatility (USD/EUR vs CNY) and geopolitical/regulatory uncertainty that can disrupt sales, costs, or logistics.

• Regulatory shocks: bans or restrictions on specific sunscreen active ingredients could abruptly reduce addressable market and scrap inventory.
• Demand softness: prolonged consumer weakness in core channels (cosmetics, personal care) could further compress revenue and force margin concessions.
• Cost and supply chain pressure: rising feedstock or logistics costs could further erode margins unless passed through to customers.
• Capital access: with lower market cap and compressed valuation multiples, equity issuance would be more dilutive and debt refinancing could be pricier if credit metrics deteriorate.
• FX and geopolitical risk: currency depreciation of key markets or trade barriers could reduce reported revenue and profitability from overseas operations.

Nanjing COSMOS Chemical Co., Ltd. (300856.SZ) - Growth Opportunities

• Product-line expansion: moving beyond sunscreen actives into complementary personal-care ingredients can unlock adjacent market segments (e.g., moisturizers, anti-pollution, hair care).
• Regulatory credentials: existing compliance with FDA-related requirements and EFfCI certification lower technical and regulatory barriers for EU/US entry, shortening time-to-market for export initiatives.
• R&D leverage: incremental R&D investment can accelerate formulation partnerships and IP creation, sustaining above-industry earnings growth if new premium products are commercialized.
• Strategic partnerships: alliances with multinational CPGs or contract manufacturers can scale distribution rapidly and convert product pipeline into higher utilization of manufacturing capacity.
• End-market tailwinds: global personal-care market expansion and rising demand for sun-care and multifunctional ingredients create structural demand lift for core chemistries.

• Margin expansion potential: a higher net-income growth (37.5% p.a.) than revenue growth (14.8% p.a.) implies operating leverage, margin improvement, or higher-margin product mix are expected.
• Scale effect: revenue crossing ~RMB 1.05 billion by FY2026 (per projection) can enable fixed-cost absorption and improved free cash flow generation if CAPEX remains moderate.
• R&D and capex sensitivity: incremental 1-2% of revenue in R&D reinvestment could materially affect product pipeline timing but is typically required to sustain the assumed earnings CAGR.

• Prioritize commercialization of ingredients with clear regulatory pathways (leverage EFfCI/FDA compliance) to accelerate export sales.
• Target strategic distribution agreements in EU and North America to convert regulatory approvals into revenue streams.
• Allocate a portion of incremental EBITDA to R&D (target 3-6% of revenue) to support formulation innovation and differentiation.
• Use partnership deals (co-development, licensing) to minimize go-to-market SG&A while expanding customer base.