Wetouch Technology Inc. (NASDAQ: WETH)

Sector: Real Estate Industry: Real Estate Services CIK: 0001826660
Market Cap 23.17 Mn
P/B 0.17
P/E 3.11
P/S 0.53
ROIC (Qtr) 5.94
Div Yield % 0.00
Rev 1y % (Qtr) 5.56
Total Debt (Qtr) 666,003.00
Debt/Equity (Qtr) 0.00
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About

Investment thesis

Bull case

  • Strong operating cash flow of 10.30M provides robust 15.47x coverage of total debt 666003, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 113.19M provide 184.21x coverage of short-term debt 614500, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 139.36M provides 209.26x coverage of total debt 666003, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 10.15M exceeds capital expenditure of 152626 by 66.49x, indicating strong organic growth funding capability.
  • Strong operating cash flow of 10.30M provides 2.13x coverage of SG&A expenses 4.85M, showing efficient operational cost management.

Bear case

  • Operating cash flow of 10.30M barely covers its investment activities of (152626), with a coverage ratio of -67.49, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (152626) provide weak support for R&D spending of (129808), which is 1.18x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • High receivables of 10.81M relative to inventory of 46878 (230.53 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 10.15M represents just -23.35x of debt issuance (434576), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • R&D investment of (129808) represents just -0.03x of SG&A expenses of 4.85M, indicating potential underinvestment in innovation relative to administrative overhead.

Peer comparison

Companies in the Real Estate Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CBRE Cbre Group, Inc. 42.12 Bn 36.40 1.04 9.99 Bn
2 BEKE KE Holdings Inc. 19.37 Bn 39.77 1.33 2.96 Bn
3 CSGP Costar Group, Inc. 18.57 Bn 914.80 6.08 1.18 Bn
4 JLL Jones Lang Lasalle Inc 13.60 Bn 21.53 0.54 3.48 Bn
5 FSV FirstService Corp 7.02 Bn 48.37 1.28 1.38 Bn
6 CIGI Colliers International Group Inc. 5.59 Bn 54.27 1.01 2.29 Bn
7 COMP Compass, Inc. 5.18 Bn -91.82 0.78 0.48 Bn
8 OPEN Opendoor Technologies Inc. 3.12 Bn -9.84 0.66 1.79 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets -0.57 1.18
EV to Cash from Ops. EV/CFO -7.72 -6.57
EV to Debt EV to Debt -119.43 5.19
EV to EBIT EV/EBIT -7.69 4.86
EV to EBITDA EV/EBITDA -7.54 13.56
EV to Free Cash Flow [EV/FCF] EV/FCF -7.84 -11.14
EV to Market Cap EV to Market Cap -3.43 7.70
EV to Revenue EV/Rev -1.83 3.49
Price to Book Value [P/B] P/B 0.17 1.76
Price to Earnings [P/E] P/E 3.11 40.59
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.36
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -7.05
Dividend per Basic Share Div per Share (Qtr) 0.00 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 0.46
Interest Coverage Int. cover (Qtr) 0.00 -2.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 93.59 -12,527.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 6.05 24.62
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.26
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 62.78 10.86
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 40.87 33.08
EBIT Growth (1y) % EBIT 1y % (Qtr) 32.85 19.37
EBT Growth (1y) % EBT 1y % (Qtr) 57.32 28.48
EPS Growth (1y) % EPS 1y % (Qtr) 148.00 29.29
FCF Growth (1y) % FCF 1y % (Qtr) 1,624.16 67.74
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 15.27 33.25
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.31 1.44
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.01
Cash Ratio Cash Ratio (Qtr) 24.14 1.45
Current Ratio Curr Ratio (Qtr) 26.69 2.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 -0.07
Interest Cover Ratio Int Coverage (Qtr) 0.00 -2.20
Times Interest Earned Times Interest Earned (Qtr) 0.00 -2.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 25.10 -120.34
EBIT Margin % EBIT Margin % (Qtr) 23.76 -135.17
EBT Margin % EBT Margin % (Qtr) 23.76 -142.98
Gross Margin % Gross Margin % (Qtr) 33.80 32.99
Net Profit Margin % Net Margin % (Qtr) 17.10 -138.31