The company's debt usage is alarming due to its liabilities and recent pre-tax loss. Its balance sheet is unhealthy, making the stock highly risky. It must convert its CN¥376m loss into profit to enhance its financial health.

Despite North Huajin Chemical Industries Ltd's appealing low price-to-sales ratio, its weaker revenue projection and subpar projected growth could explain its lower valuation. Investors seem to expect restrained future growth, hence accepting a lesser price for the stock.