Analysis of Inventory Surge and Profit Decline Risks for INESA Intelligent Tech Inc.

Based on data obtained from Jinling AI, I conducted an in-depth analysis of the inventory surge and profit decline phenomenon of INESA Intelligent Tech Inc. (600602.SS):

Indicator	Value	Risk Assessment
P/E Ratio	134.77x	Extremely High Valuation Bubble Risk
ROE (Return on Equity)	3.95%	Weak Profitability
Net Profit Margin	3.05%	Thin Marginal Profit
Free Cash Flow	-168 million yuan	Severe Cash Flow Drain
Financial Stance	Aggressive	Low Depreciation/Capital Expenditure Ratio

A combination of a 73% inventory surge and profit decline usually indicates the following risks:

1. Inventory Overstock Risk
   : Inventory growth far outpaces revenue growth, indicating a slowdown in product sales and potential risk of obsolescence and devaluation

2. Gross Margin Pressure
   : May be forced to cut prices for promotions to clear inventory, further eroding profit margins

3. Capital Occupancy Cost
   : High inventory ties up large amounts of working capital, exacerbating cash flow strain

4. Potential Asset Impairment
   : Inventory impairment provisions may become a “time bomb” for future profits

• Current Price: $18.69, below 50-day moving average ($18.72) and 200-day moving average ($20.92) [0]
• 20-day moving average and 50-day moving average form a “death cross”, short-term trend is bearish
• 3-month decline of 10.79%, 6-month decline of 6.64%, medium-term trend is weak [0]

1. Aggressive Financial Policy
   : Low Depreciation/Capital Expenditure Ratio

2. High Valuation Bubble
   : 134.77x P/E ratio is far above industry average, valuation is seriously divergent from fundamentals [0]

3. Cash Flow Crisis
   : Negative free cash flow indicates business expansion has not generated expected returns [0]

4. Weak Profitability
   : 3.11% operating margin is hard to support high growth expectations [0]

• Inventory surge may stem from
  market demand forecasting errors
• Business expansion may
  come at the cost of cash flow
• May face
  inventory impairment provision
  pressure in the future
• High risk of valuation regression, current price has
  downward correction space

: High Risk

:

1. Wait-and-See Priority
   : Wait for improvements in inventory turnover and cash flow inflection point

2. Monitor Subsequent Financial Reports
   : Focus on tracking inventory change trends and gross margin movements

3. Set Stop-Loss Level
   : If key support levels are broken, promptly control risks

4. Compare with Peers
   : Evaluate valuation rationality against similar software infrastructure enterprises

: The inventory surge and profit decline of INESA Intelligent Tech Inc. indeed indicate concerns about business expansion; combined with aggressive financial policies and extremely high valuations, investors are advised to maintain a cautious attitude and avoid blind chasing of high prices. The current market may be correcting overly optimistic expectations from earlier periods.

— References —
[0] Jinling AI Financial Database - INESA Intelligent Tech Inc. (600602.SS) Company Profile, Financial Analysis and Market Data (January 1, 2026)