Ask AI · Can the high P/E ratio of Shenjian Co. in commercial aerospace realize profits?

Original First Release | Jinjiao Finance (ID: F-Jinjiao)

Author | Tian Yu

Shenjian Co. is going crazy.

In the last 4 trading days of March, the company consecutively hit 4 limit-ups; by April 2nd, the stock price even hit a historical high of 18.3 yuan (pre-adjusted), and on April 8th, it hit the limit-up again.

If we push the timeline a bit further back, this kind of madness isn’t even the first time. At the end of last year, Shenjian Co. had 11 limit-ups within 18 trading days.

This kind of surge not only stunned investors but probably even the original controlling shareholder Liu Zhijian himself didn’t expect it.

In early 2025, he exited at 5.2 yuan per share, handing control over to state assets. Who would have thought that more than a year later, Shenjian Co. could be driven up to 18.3 yuan? Based on this price, after Liu Zhijian’s exit, Shenjian’s stock price has tripled.

A market rally that even the original controller missed out on, with the core driver behind it being just four characters: Commercial Aerospace.

Shenjian Co. has now entered the lightweight satellite antenna and support structure track, backed by top national teams like “China Aerospace Science and Technology Corporation.” With solid physical assets and top-tier backing, this script looks like an invincible expedition.

However, the market’s imagination is often best at overextending a company’s future prospects all at once.

Shenjian’s nearly 500 times P/E ratio (TTM) is like a red light hanging overhead, constantly warning investors: this is no longer just buying stocks, but betting on miracles.

Such a valuation essentially issues a military order to Shenjian: must deliver explosive profit growth in the commercial aerospace track, or this overvalued premium will eventually be eroded by reality.

The stars and the sea are indeed inspiring. But when Musk stirs up a hurricane across the ocean, Shenjian holds in its hand a report with a chemical plant oil smell, a gross profit margin of only 12.3%, and a core profit margin as low as 0.25%.

Can it really take this soaring wealth and fly with hundreds of billions in market value?

The original controller sold early

Even if Shenjian adopts the hottest “Commercial Aerospace” label in A-shares, if you look at its performance over the past few years, you’ll find there’s no starry sea, only a struggling real economy.

In 2021, the company’s revenue once grew nearly 40% in a bright moment, but then fell into mediocrity. From 2022 to 2024, its revenue growth fluctuated between -6% and 2.2%, almost stagnating; net profit attributable to parent dropped sharply from a high of 80 million yuan to around 30 million yuan, falling multiple steps.

Perhaps seeing through the bottleneck of its main business, the original controller Liu Zhijian chose to “retreat” before dawn.

On New Year’s Day 2025, Shenjian Co. changed hands, with Wuhu State-owned Assets officially taking over.

The announcement stated that Wuhu Yuanda Venture Capital acquired a total of 79.2 million shares from the company’s controlling shareholder and its concerted actors, including Mr. Liu Shaohong (including Liu Zhijian’s 40 million shares), accounting for 8.33% of the total share capital; at the same time, Liu Zhijian entrusted the voting rights of his remaining shares (about 12.66% of the total) to the other party.

After the transaction, Wuhu Yuanda Venture Capital became the controlling shareholder, and the actual controller changed to the Wuhu State-owned Assets Supervision and Administration Commission.

It’s worth noting that, if we go back to that time point, Liu Zhijian’s exit transaction was a textbook “precise high-level cash-out.”

The announcement showed the transfer price was 5.2 yuan, compared to the closing price of 4.95 yuan per share the day before signing, a premium of 5.05%; more importantly, less than a year earlier, in early 2024, Shenjian’s stock price was only 2.26 yuan.

In other words, despite years of no highlights in performance and unremarkable fundamentals, Liu Zhijian managed to cash out at a relatively high level after the stock doubled in a year.

Ironically, the post-acquisition performance of the state-owned enterprise proved Liu’s “shrewdness.”

In the first three quarters of 2025, Shenjian’s revenue growth was 5.64%, and net profit growth was 3.81%. Looking at absolute values alone, this isn’t impressive, and compared horizontally, it’s even more embarrassing. Shenjian’s industry classification in the SWS three-level industry of synthetic resins shows median figures of 10.51% and 6.54%, respectively.

Even more troubling, these profits might be “discounted.” In the first three quarters of 2025, operating profit was only 26 million yuan, with government subsidies and other income accounting for 12 million yuan, about 46%. In 2024, with 23 million yuan operating profit, other income was 16 million yuan, accounting for about 70%.

Over-reliance on government subsidies reflects the difficulty of Shenjian’s main business profitability.

In the first three quarters of 2025, Shenjian’s core profit (revenue minus operating costs, taxes, surcharges, sales, management, R&D, interest expenses) was only 4.5 million yuan, meaning that from over 1.8 billion yuan in revenue, the operating profit was only a few million, with a core profit margin of just 0.25%, equivalent to just over 0.2 yuan profit per 100 yuan of revenue.

The root of the problem may lie in Shenjian’s own business.

In the first three quarters of 2025, its gross profit margin was 12.3%, ranking fourth from the bottom among 14 listed companies in its industry classification. Such a low gross margin indicates the company is engaged in a business that isn’t very profitable, and it may lack the competitiveness to earn high premiums.

Liu Zhijian’s retreat was a “smart person” recognizing the trend, but no one expected that under Musk’s influence, the market script would turn into a shocking twist.

18 trading days · 11 limit-ups

Sometimes, the market script is more absurd than science fiction.

From late 2025 to early 2026, Shenjian Co. achieved 11 limit-ups in just 18 trading days, as if cheat codes were enabled. The stock price soared from 6.75 yuan to 18.13 yuan.

Just when veteran investors thought this was just a typical “phenomenon stock” pulse, it delivered a series of four consecutive limit-ups at the end of March. In early April, it hit a new all-time high of 18.3 yuan (pre-adjusted). Compared to Liu Zhijian’s initial transfer price of 5.2 yuan, that’s more than tripled.

The two waves of major surges in Shenjian Co. were driven by Elon Musk across the Pacific.

Today’s “Starlink” is no longer just a PowerPoint dream; it has proven with real money that: commercial aerospace is not just a money-printing machine, but a money-pressing machine. According to media reports cited by Caixin, in 2025, SpaceX’s revenue was about $15-16 billion, with a profit of about $8 billion, of which Starlink contributed 50% to 80%.

SpaceX’s success has completely reshaped global market valuation logic for commercial aerospace: it’s no longer an unreachable scientific research island, but a highly certain, trillion-scale communication infrastructure.

This logic quickly resonated with domestic policies riding the wave of heat.

In 2024-2025, “Commercial Aerospace” was written into government work reports for two consecutive years, becoming a strategically supported emerging industry. Additionally, the CSRC restarted the fifth set of listing standards for the STAR Market, and the Shanghai Stock Exchange issued detailed guidelines for commercial rocket companies, encouraging the development of reusable rockets—these were seen by the market as signals of support for commercial aerospace.

More importantly, China’s industry side is also moving forward.

In December 2025, China applied to the ITU for an additional 203k satellites, including StarNet, Yuanxin, Radio Spectrum Development and Innovation Research Institute, China Mobile, and others, applying for 14 constellations.

On March 30th at 19:00, CAS Space’s “Lijian No. 2” Long March-6 Y2 launch vehicle successfully launched the “New Journey 01” satellite, “New Journey 02” satellite, and “Tian Shi” satellite 01 into their planned orbits. This was the first flight of CAS Space’s medium-large reusable rocket “Lijian No. 2.”

As these grand narratives layer upon layer, the market begins to frantically seek Chinese versions of “SpaceX stocks.”

Shenjian Co. was thus revalued at its emotional peak.

Its long-standing “chemical new materials + high-end equipment” dual main businesses, in the eyes of capital, instantly turned into a golden foundation. Entering lightweight satellite antennas and becoming a supplier for China Aerospace Science and Technology Group, these descriptions that once lay in the financial reports are now magnified under the spotlight.

With physical assets, products, and even a place on the “national team” supply list, it’s easy to understand why the market is so eager.

But this is the paradox. The excitement in the capital market lies in “entering the track,” yet it selectively ignores how much weight Shenjian actually carries.

As of the close on April 8, Shenjian’s P/E ratio (TTM) had reached 459 times. Behind this figure is a gamble: not just that Shenjian “touches” commercial aerospace, nor that its “business has growth hope,” but that Shenjian must deliver explosive profits from commercial aerospace in the future.

Can it change its fate?

At nearly 500 times P/E, any rational assessment seems out of place. But looking at the financials, Shenjian’s aerospace segment is far from as promising as the stock price suggests.

In the first half of 2025, its high-end equipment manufacturing business only achieved 111 million yuan in revenue, less than 10% of total revenue.

More painfully, its industry position is weak.

Shenjian’s focus is on antennas and support structures, which are typical “structural parts” in the commercial aerospace chain. This position lacks upstream raw material scarcity and downstream launch platform barriers; fundamentally, it relies on scale and cost to survive.

For a company with a gross margin of about 12% and a core profit margin of only 0.25%, this kind of business is more like a “patch-up” benefit rather than a “fate-changing” leap.

The harsher truth is: unprofitable downstream means midstream suffers.

Currently, commercial aerospace has not yet developed a large-scale, stable, and sustainable profit model. For example, LandSpace, which lost nearly 3.5 billion yuan from 2022 to mid-2025, illustrates this.

But unlike other tracks, many downstream companies in commercial aerospace are not just market-oriented firms. They carry national strategic and industrial breakthrough missions, making them critical links that must be supported.

In this context, the main theme of resource allocation across the industry chain will likely focus on reducing costs, improving efficiency, and ensuring industry progress downstream. Companies like Shenjian, more midstream and supporting, will probably see a future script of “subsidizing downstream, benefiting the industry,” rather than “earning high premiums from commercial aerospace.”

Additionally, there’s a hidden risk: receivables.

Since downstream companies are still in the stage of key support, continuous investment, and unformed profit models, even if midstream suppliers get orders, they often can’t collect the money easily. To secure orders, bind customers, and gain market share, many companies have to extend payment terms.

For example, the listed company CETC Lantian, also a midstream player, saw its accounts receivable jump from 15B yuan to 203k yuan from 2022 to Q3 2025, doubling. According to Choice data, its receivables turnover days now exceed one year.

This is clearly a concerning signal for Shenjian. Its current receivables turnover days (including notes receivable) already exceed 200 days. If it continues to deepen into downstream sectors like commercial aerospace, which are more capital-intensive and may have longer payment cycles, its cash flow pressure will only increase.

Finally, the “investment” game.

Although commercial aerospace has favorable policies, Shenjian is not sitting at home waiting for orders to fall from the sky. To truly benefit from this track, it will likely need to invest heavily—expand capacity, ramp up R&D—to turn its “layout” into “scale.”

Without enough investment, the final gains may only be marginal, unable to support the high valuation the market currently assigns.

But does Shenjian have the confidence to make such investments?

As of the end of Q3 2025, Shenjian’s asset-liability ratio exceeded 50%, making it one of the two companies in the SWS synthetic resin sector with such high leverage.

Therefore, the most concerning issue for Shenjian now isn’t whether it has a “commercial aerospace concept,” but whether it might fall into a “low-profit, slow-collection, and continuously burning money” trap.

The market loves stars and the sea. But in the real business world, the ultimate determinants are often just two things: cash flow and profit.

SpaceX has proven it can fly. Shenjian still needs to prove it won’t fall.

Reference materials:

Hua Jun Capital Academy “M&A Case Study: 2024’s First Control Acquisition in A-shares, Anhui State-owned Premium ‘Snatches’ Leading Coatings Resin Company”

Caixin “Seizing the High Ground of Space”

Pao Finance “Veteran of Commercial Aerospace, 002361, Once Again ‘Going Wild’?”

Author’s note: Personal opinions only, for reference.