MeritValue

Hongli Group Inc.

HLPdata completeness 100%6 fiscal years on file
The thesis, from the filings

Hongli Group Inc. earns about 7% on invested capital, below its ~9% cost of capital, but has diluted owners by 634% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $0.08 and $0.29 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$21.7M1$20.3M1$16M1$14.1M2$19.6M2
Net income$3.2M3$2.93M4$864,7225−$1.88M5$1.94M5
Operating cash flow$1.14M6$2.49M7$884,9178−$414,0348$878,2678
Capital expenditure$1M9$5.1M10$302,39311$32,50611$217,44311
Free cash flow (derived)$134,9826−$2.61M7$582,5248−$446,5408$660,8248
Total debt$5.66M12$26.3M13$12.5M14$10.1M15$14.9M16
Cash & equivalents$484,38917$2.09M18$775,68619$909,71620$1.81M20
Diluted shares10.0M10.0M11.8M17.5M73.4M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$7.87
your share of equity
Profit it earned you last year
$0.26
Free cash flow it threw off
$0.09
Debt you’d be carrying
$2.03

10 shares is a claim on $7.87 of net worth that earned you $0.26 and generated $0.09 of cash last year, against $2.03 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
7% avg · 5y
FY21 21%FY22 9%FY23 4%FY24 -2%FY25 3%

It earned about 7% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+634% shares · 5y

Share count is up 634% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 164% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $0.08 and $0.29 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$0.29
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$582,524
DCF · Growth Exit 5Y
$0.08
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$582,524
Earnings Power Value
$0.27
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$1.94M
  • growthAssumed0.0%
Graham Number
$0.73
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $0.08
The three cases
Bear0.0%−$0.07
Base20.0%$0.08
Bull20.0%$0.08

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 20-F · period ending 2021-12-31 · accession 0001213900-24-037946 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 20-F · period ending 2024-12-31 · accession 0001213900-26-055737 (Revenues)
  3. 20-F · period ending 2021-12-31 · accession 0001213900-24-037946 (NetIncomeLoss)
  4. 20-F · period ending 2022-12-31 · accession 0001213900-25-042120 (NetIncomeLoss)
  5. 20-F · period ending 2023-12-31 · accession 0001213900-26-055737 (NetIncomeLoss)
  6. 20-F · period ending 2021-12-31 · accession 0001213900-24-037946 (NetCashProvidedByUsedInOperatingActivities)
  7. 20-F · period ending 2022-12-31 · accession 0001213900-25-042120 (NetCashProvidedByUsedInOperatingActivities)
  8. 20-F · period ending 2023-12-31 · accession 0001213900-26-055737 (NetCashProvidedByUsedInOperatingActivities)
  9. 20-F · period ending 2021-12-31 · accession 0001213900-24-037946 (PaymentsToAcquirePropertyPlantAndEquipment)
  10. 20-F · period ending 2022-12-31 · accession 0001213900-25-042120 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 20-F · period ending 2023-12-31 · accession 0001213900-26-055737 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 20-F · period ending 2021-12-31 · accession 0001213900-23-040060 (ShortTermBorrowings)
  13. 20-F · period ending 2022-12-31 · accession 0001213900-23-040060 (LongTermDebtCurrent)
  14. 20-F · period ending 2023-12-31 · accession 0001213900-24-037946 (LongTermDebtNoncurrent)
  15. 20-F · period ending 2024-12-31 · accession 0001213900-25-042120 (LongTermDebtCurrent)
  16. 20-F · period ending 2025-12-31 · accession 0001213900-26-055737 (ShortTermBorrowings)
  17. 20-F · period ending 2021-12-31 · accession 0001213900-23-040060 (CashAndCashEquivalentsAtCarryingValue)
  18. 20-F · period ending 2022-12-31 · accession 0001213900-24-037946 (CashAndCashEquivalentsAtCarryingValue)
  19. 20-F · period ending 2023-12-31 · accession 0001213900-25-042120 (CashAndCashEquivalentsAtCarryingValue)
  20. 20-F · period ending 2024-12-31 · accession 0001213900-26-055737 (CashAndCashEquivalentsAtCarryingValue)