Jiangsu Etern Company Limited, which secured its first daily limit after the holiday, welcomed a capital "carnival" on its second trading day. As of the close on October 10, the company's stock price reached 14.81 yuan per share, up 5.94%.
More notable was its trading volume, with daily turnover of 41.159 million shares and transaction value reaching 6.147 billion yuan, surging more than tenfold compared to the previous trading day and setting a new high since listing. The previous trading day's total transaction value for Jiangsu Etern Company Limited was only 534 million yuan.
Regarding capital flow data, institutional funds showed a net outflow of 335 million yuan, accounting for 5.45% of total transactions, while speculative funds recorded a net inflow of 122 million yuan (1.99% of total transactions), and retail investor funds showed a net inflow of 213 million yuan (3.46% of total transactions).
Recent strong gains in Jiangsu Etern Company Limited's stock price are attributed to breakthroughs in superconducting technology, market sentiment, and "impressive" semi-annual report data. However, the market has different interpretations of these stellar results, as nearly 99% of profits mainly came from "property sales" income from associated companies. Excluding this asset disposal, Jiangsu Etern Company Limited's operations remain exceptionally complex.
**Acceleration and Deceleration of the "Four-Wheel Drive"**
Since its establishment in 1994 and listing in 1997, Jiangsu Etern Company Limited has undergone three major transformations. As the former "leading optical cable stock," the company evolved from supplying cables to telecom operators into a comprehensive enterprise with four main businesses: optical communication, superconducting, automotive wire harnesses, and overseas power.
While many investors view these four businesses as the company's trump cards, creating dual barriers of technology and market access and attracting long-term funds like social security funds in Q2, the latest performance data suggests these businesses may be experiencing contrasting fortunes.
First, in the optical communication segment, Jiangsu Etern Company Limited has achieved vertical integration from "optical preform-optical fiber-optical cable-optical chips-optical devices-optical modules-big data applications," becoming one of the few domestic companies covering the entire chain from basic materials to data applications. The latest financial report shows that this business segment's revenue in the first half of 2025 fell short of the same period last year, with main business revenue of 402 million yuan. However, gross margins increased year-over-year, achieving profit growth. Against the backdrop of AI computing power driving high growth in optical communication business, the company's optical communication revenue declined, possibly indicating industry demand fluctuations or market share losses due to competitive pressure.
Conversely, the automotive wire harness and copper conductor segments showed significant revenue growth due to market expansion, but higher initial costs for new projects led to decreased gross margins and reduced profits.
For overseas power business, while the Bangladesh national grid project's completion rate improved year-over-year, other project reductions led to declines in both segment gross margins and profits. Overseas engineering business typically exhibits long cycles and high uncertainty, potentially increasing Jiangsu Etern Company Limited's performance volatility.
In the superconducting sector, particularly high-temperature superconducting, which the market views with high expectations and the company considers a future growth driver, Jiangsu Etern Company Limited stated it has made progress in superconducting tape capacity, technology, and applications, maintaining close cooperation with multiple research institutions and enterprises.
However, this business remains in the investment phase. Data shows that the subsidiary primarily handling Jiangsu Etern Company Limited's superconducting business posted a net loss of 21.635 million yuan in the first half of this year. From a technology reserves perspective, the company masters core second-generation high-temperature superconducting tape (REBCO) technology and is one of only three global companies capable of mass production, with over 80% domestic market share. Reports indicate its 2025 superconducting orders exceed 1 billion yuan, with capacity expanding from the current 2,000 kilometers to 20,000 kilometers by 2027, corresponding to revenue growth from 590 million yuan to 5 billion yuan, potentially becoming the company's second growth curve.
**Financial Data Warning Signals**
The interim report shows Jiangsu Etern Company Limited achieved attributable net profit of 319 million yuan in the first half, surging 917.66% year-over-year. Net profit margin jumped from 3.23% in the same period of 2024 to 13.60%, with the company simultaneously announcing a dividend plan of 0.35 yuan per 10 shares, creating a five-year high for semi-annual dividends.
However, behind this data, the core driver of Jiangsu Etern Company Limited's profit surge mainly came from investment income, accounting for approximately 90% of net profit for the period. Excluding this one-time gain, main business contributed only 10% of net income. Over a longer cycle, the company's net profit volatility far exceeds revenue fluctuations.
Financial report data shows revenue gradually declined from 4.532 billion yuan in 2021 to 4.111 billion yuan in 2024, with growth under pressure for three consecutive years from 2022-2024, falling 5.38% year-over-year in 2024 to a cyclical low. Net profit peaked at 228 million yuan in 2022, then fell to 114 million yuan in 2023 (-50%), further narrowing to 61 million yuan in 2024, though year-over-year growth turned from negative to positive at 42%.
While both revenue and net profit fluctuated, Jiangsu Etern Company Limited's operating cash flow and net profit showed long-term divergence, with earnings quality requiring improvement. Data shows that from 2022-2024, the company's net profits were 228 million, 114 million, and 61 million yuan respectively, while operating cash flows were -495 million, 287 million, and -336 million yuan respectively. The 2024 cash flow/net profit ratio hit a five-year low of -5.51. This contradiction continued prominently in the first half of 2025, with net profit reaching 319 million yuan but operating cash flow showing a net outflow of 19.28 million yuan, while accounts receivable surged 30.37% year-over-year, accounting for 48.2% of revenue, with delayed collections limiting cash flow improvement.
Regarding liabilities, as of the reporting period end, Jiangsu Etern Company Limited's total liabilities reached 5.407 billion yuan, including 2.47 billion yuan in short-term borrowings. The company's monetary funds totaled 1.499 billion yuan, of which 358 million yuan was restricted, leaving only approximately 1.14 billion yuan in truly available cash, far insufficient to cover short-term borrowings. Additionally, Jiangsu Etern Company Limited's operational capacity appears to be declining. In 2024, the company's inventory turnover rate fell from 5.57 to 5.06 times, total asset turnover rate dropped from 0.54 to 0.50 times, with operational efficiency continuously declining.
Furthermore, from valuation and industry positioning perspectives, Jiangsu Etern Company Limited has formed a significant "technology attribute premium." The company's current P/E ratio of 33.99 times aligns with the communications industry average, but its P/B ratio of 6.48 times far exceeds the industry average of 1.88 times, with this premium stemming from scarce positioning in superconducting and optical chips. Whether these two segments can continue their momentum in Q3 becomes a key factor for the company's performance to sustain the first half's explosive growth.
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