Share count
73Mpeak FY2025
← All companies ← HLN Manual HMC → ← HLIO Industrial Machinery HSAI →
HLP, Hongli Group Inc.
Hongli Group Inc. supplies and prices of the PRC operating entities' various raw materials can be affected by worldwide supply and demand factors, as well as other factors beyond control such as financial market trends.
Facilities and Equipment of the PRC Operating Entities - Yingxuan Assets Purchase." 81 Key Financial Performance Indicators We consider a variety of financial and operating measures in assessing the performance of the business of the PRC operating entities.
Our revenue primarily depends on the PRC operating entities' ability to maintain relationships with key customers such as LOVOL, South Korean VOLVO, and XCMG, as well as to develop new customer relationships.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2025
$20M
+39.0% YoY · 12% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $20M 5-yr avg $18M
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- Situation
- Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
- What moves the needle
- Gross margin has run about 33% and operating margin about 12% through the cycle, a spread the cycle sets more than the company does. The margin is cyclical, swinging between −11% and 22% over the years, so the through-cycle figure carries more than any single year — and the balance sheet at the trough more than the peak. Inventory runs near 14% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on the capital-goods cycle and the aftermarket. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has rarely cleared the cost of capital (median 6%, above 15% in 2 of 6 years). Owner earnings, the cash-based check, have been thin too. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 20-F →China is 85% of revenue, so this is largely a single-region business.
Revenue by geography, FY2025
- China85%$17M
- Overseas15%$3M
From the segment footnote of the company's own 20-F. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2020–2025
realized figures from each filing · older years to the left| 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMDec 2025 | |
|---|---|---|---|---|---|---|---|
| Income statement | |||||||
| $11M | $22M | $20M | $16M | $14M | $20M | $20M | RevenueRevenue |
| 40% | 35% | 35% | 33% | 32% | 33% | 33% | Gross marginGross mgn |
| $2M | $4M | $3M | $1M | ($2M) | $2M | $2M | Operating incomeOp. inc. |
| 22.1% | 18.1% | 14.4% | 6.4% | −11.2% | 12.4% | 12.4% | Operating marginOp. mgn |
| $2M | $3M | $3M | $865K | ($2M) | $2M | $3M | Net incomeNet inc. |
| 9% | 8% | 9% | 7% | — | 11% | 7% | Effective tax rateTax rate |
| Cash flow & returns | |||||||
| $3M | $1M | $2M | $885K | ($414K) | $878K | $878K | Operating cash flowOp. cash |
| $521K | $586K | $645K | $871K | $804K | $687K | $804K | DepreciationDeprec. |
| $34K | ($3M) | ($1M) | ($851K) | $663K | ($2M) | ($3M) | Working capital & otherWC & other |
| $585K | $1M | $5M | $302K | $33K | $217K | $217K | CapexCapex |
| 5.2% | 4.6% | 25.1% | 1.9% | 0.2% | 1.1% | 1.1% | Capex / revenueCapex/rev |
| $2M | $135K | ($3M) | $583K | ($447K) | $661K | $661K | Owner earningsOwner earn. |
| 21.5% | 0.6% | −12.9% | 3.6% | −3.2% | 3.4% | 3.4% | Owner earnings marginOE mgn |
| $2M | $135K | ($3M) | $583K | ($447K) | $661K | $661K | Free cash flowFCF |
| 21.5% | 0.6% | −12.9% | 3.6% | −3.2% | 3.4% | 3.4% | Free cash flow marginFCF mgn |
| 28% | 33% | 8% | 4% | -2% | 3% | 3% | ROICROIC |
| 30% | 28% | 22% | 4% | -4% | 3% | 5% | Return on equityROE |
| 30% | 28% | 22% | 4% | −4% | 3% | 5% | Retained to equityRetained/eq |
| Balance sheet | |||||||
| — | $484K | $2M | $1M | $910K | $2M | $2M | Cash & investmentsCash+inv |
| — | $5M | $7M | $6M | $6M | $9M | $9M | ReceivablesReceiv. |
| — | $3M | $3M | $2M | $3M | $2M | $2M | InventoryInvent. |
| — | $2M | $3M | $1M | $1M | $2M | $2M | Accounts payablePayables |
| — | $6M | $7M | $7M | $7M | $10M | $10M | Operating working capitalOper. WC |
| — | $11M | $14M | $11M | $12M | $16M | $16M | Current assetsCur. assets |
| — | $10M | $12M | $8M | $8M | $14M | $14M | Current liabilitiesCur. liab. |
| — | 1.2× | 1.1× | 1.4× | 1.5× | 1.1× | 1.1× | Current ratioCurr. ratio |
| — | $22M | $36M | $32M | $65M | $72M | $72M | Total assetsAssets |
| — | — | $20M | $3M | $4M | $9M | $13M | Total debtDebt |
| — | — | $18M | $2M | $3M | $8M | $11M | Net debt / (cash)Net debt |
| 9.6× | 12.5× | 7.9× | 1.6× | -10.2× | — | 3.7× | Interest coverageInt. cov. |
| $8M | $11M | $13M | $21M | $53M | $58M | $58M | Shareholders’ equityEquity |
| Per share | |||||||
| 10.0M | 10.0M | 10.0M | 11.8M | 17.5M | 73.4M | 73.4M | Shares out (diluted)Shares |
| $1.12 | $2.17 | $2.03 | $1.36 | $0.81 | $0.27 | $0.27 | Revenue / shareRev/sh |
| $0.24 | $0.32 | $0.29 | $0.07 | $-0.11 | $0.03 | $0.04 | EPS (diluted)EPS |
| $0.24 | $0.01 | $-0.26 | $0.05 | $-0.03 | $0.01 | $0.01 | Owner earnings / shareOE/sh |
| $0.24 | $0.01 | $-0.26 | $0.05 | $-0.03 | $0.01 | $0.01 | Free cash flow / shareFCF/sh |
| $0.06 | $0.10 | $0.51 | $0.03 | $0.00 | $0.00 | $0.00 | Cap. spending / shareCapex/sh |
| $0.80 | $1.15 | $1.35 | $1.80 | $3.07 | $0.79 | $0.79 | Book value / shareBVPS |
The diluted share count moved ×1.48 into 2024 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.
The diluted share count moved ×4.21 into 2025 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.
Per-share growththe realized rate an owner's share compounded
| 5-yr | 5-yr | |
|---|---|---|
| Revenue / share | −24.9%/yr | −24.9%/yr |
| Owner earnings / share | −48.1%/yr | −48.1%/yr |
| EPS | −35.8%/yr | −35.8%/yr |
| Capital spending / share | −44.9%/yr | −44.9%/yr |
| Book value / share | −0.4%/yr | −0.4%/yr |
The record, charted
FY2020–2025Each measure over its full record; the current point and the worst year marked.
ROIC
3%low FY2024
Gross margin
33%low FY2024
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
$661Kowner earningsvs.$2Mnet incomelow FY2022
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
FY2020FY2025
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2025 the business reported $2M of profit but $661K of owner earnings: $1M less than the profit line, taken out by capital spending and the timing of cash.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Reported net income | $2M | ($2M) | $865K | $3M | $3M |
| Depreciation & amortizationnon-cash charge added back | +$687K | +$804K | +$871K | +$645K | +$586K |
| Working capital & othertiming of cash in and out, other non-cash items | −$2M | +$663K | −$851K | −$1M | −$3M |
| Cash from operations | $878K | ($414K) | $885K | $2M | $1M |
| Capital expenditurecash put back in to keep running and to grow | −$217K | −$33K | −$302K | −$5M | −$1M |
| Owner earnings | $661K | ($447K) | $583K | ($3M) | $135K |
| Owner-earnings marginowner earnings ÷ revenue | 3% | -3% | 4% | -13% | 1% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .
Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2025 20-F · source on SEC EDGAR →
Material weakness in financial controls
“We have identified material weaknesses and significant deficiencies in our internal control over financial reporting.”
The figures below are only as sound as the controls that produced them. read the note →
Will it survive?
- AdequateOperating income $2M ÷ interest expense $651K
What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
- How heavy is the debt, net of cash? $11M · 4.4× operating profitHeavy net debtCash $2M + ST investments $262K − debt $13M
What this means
Netting $2M of cash and short-term investments against $13M of debt leaves $11M owed, about 4.4× a year's operating profit (5.2× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Long (60+ days)DSO 173 + DIO 68 − DPO 52 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- Below average through the cycle6-yr median, range -2%–33%; 3% latest = NOPAT $2M ÷ invested capital $69MIndustry peers: median -74%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 6 years (it ran 3% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Thin through the cycle6-yr median margin, range -13%–21%; latest $661K = operating cash $878K − maintenance capex $217KIndustry peers: median -100%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 3% of revenue this year, a 1% median across 6 years.
- Thinly cash-backedCash from ops $878K ÷ net income $3M
In the filing’s words The filing discloses a material weakness in its financial controls — the reported numbers here, and the record built on them, are only as reliable as the controls that produced them.
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? 0.27×HarvestingCapex $217K ÷ depreciation $804K
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 0 of 6 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size MissRevenue ≥ $2B · $20M
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 1.12×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $13M vs $2M WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability NearA profit every year (6-yr record) · 1 loss year
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · none paid
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth MissEarnings +33% over the record · −89%
What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.00/share (latest year $0.04), the averaged base the calculator's gate runs on, and book value is $0.79/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2020–2025
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 5 of 6
What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
- Return on capital ≥ 15% 0 of 4 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 18% → 3% (3-yr avg ends)
In the filing’s words The words explain the slip: the filing names price competition rather than pricing actions of its own — a business that looks to take its price, not set it.
What this means
Through the cycle the operating margin slipped — about 18% early to 3% lately, median 12% — competition or costs are biting in.
- Reinvestment, incremental ROIC −20%
What this means
Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.
- Owner earnings growth −39%/yr
What this means
Owner earnings shrank about 39% a year over the record.
- Worst year 2024 · −11.2% op. margin
What this means
Operations went underwater in 2024, understand why before trusting the good years.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Dec 31, 2025Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$16M
- Cash & short-term investments$2M
- Receivables$9M
- Inventory$2M
- Other current assets$2M
Current liabilities$14M
- Debt due within a year$9M
- Accounts payable$2M
- Other current liabilities$3M
Current ratio1.12×all current assets ÷ what's due · Graham looked for 2×
Quick ratio0.95×stricter: inventory excluded
Cash ratio0.14×strictest: cash alone against what's due
Working capital$2Mthe cushion left after near-term bills
Debt due this year vs. cash$9M due · $2M cash
cash alone won't cover the maturities; it leans on refinancing or operating cash · both figures from the Dec 31, 2025 balance sheet
Deeper floors
Tangible book value$53Mequity stripped of goodwill & intangibles
Net current asset value$2MGraham's net-net: current assets less all liabilities
Debt incl. operating leases$13Mno operating-lease liability tagged this quarter, so debt alone
Deferred revenue$162Kcustomer cash collected before delivery; operating float
From the company's latest filing.
How the cash was used, 2020–2025
Over the record, the business generated $8M of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.
- Reinvested$7M · 91%
- Retained (debt / cash)$719K · 9%
- Net change in share count634.4%
The diluted count rose from 10M to 73M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
- Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
- Return on what it retained3%
Of the earnings it kept rather than paid out ($9M over the span), annual owner earnings (first three years vs last three) grew $292K, so each retained $1 added about 0.03 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Inverting the record
Invert: instead of why Hongli Group Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2020–2025.
2 of the 3 tests turned up something to look into; the other 1 came back clean.
- Look hereDid the share count rise anyway?634.4%
Diluted shares grew 634.4% over 2020–2025. Owners were diluted on net; each share owns less of the business than it did. Read the buyback line beside this one, not on its own.
- Look hereDid reported profit become cash?0.84×
Across the record the business reported $9M of net income but generated $8M of operating cash, a 0.84-to-one conversion. Profit that does not turn into cash over many years is the classic mark of earnings that are softer than they look. Ask where the gap sits, receivables, inventory, or costs being capitalized rather than expensed.
And these came back clean
- Is it less profitable than it was?
Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.
Peers, Industrial Machinery
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| OUSTOuster Inc. | $169M | 27% | -297.0% | -101% | -224% |
| ERIIEnergy Recovery Inc. | $135M | 69% | 13.5% | 13% | 8% |
| CEPLCapstone Energy Plus Inc. | $106M | 14% | -23.2% | -74% | -19% |
| ASYSAmtech Systems Inc. | $79M | 37% | 1.8% | 1% | -4% |
| VELOVelo3D Inc. | $46M | -5% | -153.6% | -147% | -140% |
| HLPHongli Group Inc. | $20M | 34% | 13.4% | 6% | 2% |
| CHRNChronoScale Holdings Corporation | $13M | 50% | -120.5% | -139% | -100% |
| RRRichtech Robotics Inc. | $5M | 65% | -86.5% | -6% | -279% |
| Group median | — | 35% | -54.9% | -40% | -59% |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the home-market price, not the US ADR quote. Hongli Group Inc. reports in USD, and every figure here (owner earnings, book value, the share count) is on that ordinary-share basis. Enter the price on the same basis: the local-exchange quote per ordinary share. A US ADR price in dollars bundles the ADR-to-ordinary ratio, so it will not reconcile with these figures and would throw the multiple off.
Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Hongli Group Inc. has delivered.
Hongli Group Inc.’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.
$
Through the cycle, Hongli Group Inc. earns about $391K on its 2.0% median owner-earnings margin. This year’s 3.4% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth · ’20→’25−39%/yr
Owner-earnings growth · ’20→’25−39%/yr
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’23–’25)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Owner earnings $661K on 73M shares outstanding, per the 20-F cover, as of 2025-12-31; net debt $11M. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "Hongli Group Inc. (HLP), the owner's record," https://ownerscorecard.com/c/HLP, data as of 2026-07-09.
Manual order: ← HLN its page in the Manual HMC →
Industry order: ← HLIO the Industrial Machinery chapter HSAI →