Cash Flow Stress Assessment Report for Leo Group Co., Ltd. (002131.SZ)

Based on the above data analysis, I now provide you with a comprehensive assessment report on the cash flow stress level of Leo Group Co., Ltd. (002131.SZ).

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Assessment Dimension	Status	Score
Operating Cash Flow Generation Capacity	🔴 Severe Shortfall	80/100
Free Cash Flow Sustainability	🔴 Sustained Negative	100/100
Cash Reserve Consumption Rate	🔴 Accelerated Consumption	80/100
Liquidity Coverage Capacity	🟡 Relatively Sufficient	35/100
Overall Stress Level	🔴 Severe Stress	74/100

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Year	Operating Cash Flow (RMB 100 million)	YoY Change	Evaluation
2020	+4.64	-	Normal
2021	-4.99	-207.5%	⚠️ Turned Negative
2022	-0.51	+89.8%	⚠️ Remained Negative
2023	-5.84	-1045.1%	🔴 Sharp Deterioration
2024	-1.82	+68.8%	⚠️ Slight Improvement

• Operating cash flow has been negative for the past 4 years
  , only positive in 2020
• In 2024, operating cash flow was -RMB 182 million; although it improved by 68.8% YoY, it remains in a net outflow state [0]
• Cumulative net outflow of operating cash flow is approximately
  RMB 852 million
  (total for 2021-2024)

Year	Free Cash Flow (RMB 100 million)	Capital Expenditure (RMB 100 million)	Evaluation
2020	+1.75	-2.89	Normal
2021	-6.77	-1.78	🔴 Severe
2022	-4.40	-3.89	🔴 Severe
2023	-8.96	-3.12	🔴 Extremely Severe
2024	-4.67	-2.85	🔴 Severe

• Free cash flow has been negative for 4 consecutive years
  , with no positive free cash flow in any year
• In 2024, free cash flow was -RMB 467 million, with a cumulative free cash flow gap of
  RMB 2.48 billion
  [0]
• Capital expenditure remains at a high level (approximately RMB 300 million per year), further exacerbating cash flow pressure

Year	Net Cash Change (RMB 100 million)	Cumulative Net Change (RMB 100 million)	Evaluation
2020	-10.62	-10.62	⚠️
2021	+7.86	-2.76	Recovered
2022	-7.37	-10.13	🔴
2023	+26.17	+16.04	Improved
2024	-21.53	-5.49	🔴 Sharp Outflow

• In 2024, net cash outflow reached
  RMB 2.153 billion
  , the worst in the past 5 years
• The significant increase of RMB 2.617 billion in cash in 2023 mainly came from financing activities (debt issuance or equity financing)
• Cumulative net cash decrease of approximately RMB 549 million over 5 years

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Indicator	Value	Industry Reference	Evaluation
Current Ratio	2.41	1.5-2.0	✅ Sufficient
Quick Ratio	2.29	1.0-1.5	✅ Sufficient
Cash Ratio	Approximately 0.8-1.0	>0.5	🟡 Borderline

Although the current ratio and quick ratio indicate acceptable short-term solvency, this mainly relies on inventory and other current assets, and [0].

Indicator	Value	Evaluation
Asset-Liability Ratio	High	⚠️ Need Attention
EV/OCF	-391.99x	🔴 Extremely Negative
Interest Coverage Ratio	Low	⚠️ Risk

• The enterprise value multiple (EV/Operating Cash Flow) is
  -391.99x
  , indicating that the market is extremely pessimistic about the company’s cash generation capacity [0]
• Need to be alert to interest payment pressure under high leverage

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Based on multi-dimensional indicator calculation of overall stress level score:

Assessment Dimension	Weight	Score	Weighted Score
Proportion of Years with Negative Operating Cash Flow	20%	80%	16.0
Sustained Negative Free Cash Flow	25%	100%	25.0
Frequency of Net Cash Outflow	20%	60%	12.0
Cash Flow Volatility	15%	55%	8.25
Latest Year Cash Flow Status	20%	100%	20.0
Overall Score	100%	-	74.25/100

Score Range	Risk Level	Recommendations
0-30	Low Risk	Normal Operations
30-50	Medium Risk	Need Attention
50-75	High Risk	🔴 High Alert
75-100	Extremely High Risk	Financial Distress

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1. Sustained Operating Cash Flow Drain
   • Operating cash flow has been negative for the past 4 years, indicating that the core business has
     completely lost its cash generation capacity
   • Although it improved YoY in 2024, it still had a net outflow of RMB 182 million

2. Long-term Negative Free Cash Flow
   • Free cash flow has been negative for 4 consecutive years, with a cumulative gap of approximately RMB 2.48 billion
   • The company continues to rely on external financing to maintain operations

3. Sharp Consumption of Cash Reserves
   • In 2024, net cash outflow reached RMB 2.153 billion
   • Cumulative net cash decrease of RMB 549 million over 5 years

4. Aggressive Accounting Policies
   • Financial analysis shows that the company adopts
     aggressive accounting policies
   • The depreciation/capital expenditure ratio is low, casting doubt on earnings quality [0]

5. Extreme Valuation Pressure
   • EV/OCF is -391.99x, and the market is extremely pessimistic about cash flow prospects [0]
   • The high multiple reflects investors’ distrust in cash generation capacity

6. Hidden Debt Pressure Risks
   • The scale of short-term and long-term borrowings needs further verification
   • Interest coverage capacity is questionable

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• Weak Cash Conversion Capacity of Core Business
  : Operating cash flow has been negative for a long time, indicating poor revenue quality or ineffective cost control
• Rigid Capital Expenditure
  : Annual capital expenditure of approximately RMB 300 million is difficult to cut, continuously consuming cash

• Accounts Receivable Issues
  : There may be large-scale difficulties in collecting accounts receivable
• Inventory Backlog
  : Although the quick ratio is high, actual liquidity is limited if inventory is difficult to liquidate

• Industry Cycle
  : The machinery industry may face overcapacity and weak demand
• Financing Environment
  : If external financing channels narrow, the company will face greater pressure

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Leo Group Co., Ltd. (002131.SZ) is facing

, mainly reflected in:

Indicator	Status	Severity
Operating Cash Flow	Negative for 4 consecutive years	🔴 Extremely Severe
Free Cash Flow	Negative for 4 consecutive years	🔴 Extremely Severe
Cash Reserves	Sharp outflow in 2024	🔴 Severe
Liquidity Indicators	Sufficient in appearance	🟡 Need Verification
Valuation Indicators	Extremely pessimistic market sentiment	🔴 Extremely Negative

1. Extremely High Short-term Risk
   : Operating cash flow remains negative, and cash consumption speed is accelerating
2. High Medium-term Risk
   : Free cash flow is negative for a long time, relying on external financing
3. Extremely High Long-term Risk
   : If the core business’s cash generation capacity cannot be restored, the company may face a liquidity crisis

• Closely track whether operating cash flow can turn positive in 2025
• Pay attention to the company’s financing activities (private placement, rights issue, bond issuance, etc.)
• Be alert to changes in inventory and accounts receivable quality
• Pay attention to management’s strategic adjustments to capital expenditure and cost control

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[0] Jinling AI Financial Analysis Database - Real-time quotes, company profile, financial analysis, and cash flow statement data for Leo Group Co., Ltd. (002131.SZ) (as of January 18, 2026)