Breaking Down CN Energy Group. Inc. (CNEY) Financial Health: Key Insights for Investors

You're looking at CN Energy Group, Inc. (CNEY) and wondering if the recent volatility signals a deep-value opportunity or a classic value trap, and honestly, the 2025 numbers paint a complex picture you need to untangle right now. While the stock has seen a dramatic decline, touching a 52-week low of $1.560 in September 2025, the company's balance sheet shows surprising resilience with a current ratio of 42.4x as of May 2025, suggesting a strong liquidity position, which is defintely a key checkmark. But, the half-year results ending March 31, 2025, show a sharp revenue drop to $16.38 million from $31.29 million a year prior, even as net income swung positive to $6.93 million from a loss, thanks to non-operational factors; this is a massive change in profitability. The trailing twelve months (TTM) revenue of $36.05 million against a TTM net loss of -$4.16 million tells a different story than the half-year jump, so we need to map where the real cash is coming from-and whether the May 2025 1-for-25 reverse stock split actually fixed their Nasdaq compliance issue or just masked the underlying market sentiment.

Revenue Analysis

You need to know where CN Energy Group, Inc. (CNEY) makes its money and, more importantly, how fast that money is shrinking. The direct takeaway is that the company is overwhelmingly dependent on its activated carbon business, and its overall revenue has fallen off a cliff in the most recent reporting period. This is a serious red flag for liquidity and operational stability.

The company's primary revenue streams are centered on two core areas: manufacturing and supplying wood-based activated carbon and producing biomass electricity. The activated carbon is the main driver, used in critical sectors like pharmaceutical manufacturing, water purification, and environmental protection. Technical services related to activated carbon are also a smaller component. To be fair, the business model is solid-providing essential materials-but the execution is struggling.

For the half-year period ending March 31, 2025, CN Energy Group, Inc. reported total revenue of just over $16.38 million. This figure represents a massive year-over-year decline of approximately -27.78% compared to the $31.29 million reported in the same period a year prior. Here's the quick math on the near-term trend, which maps a clear risk for investors:

• Half-Year Revenue (H1 2025): $16.38 million
• Year-over-Year Decline (H1 2025): -27.78%
• Trailing Twelve Months (TTM) Revenue: $36.05 million
• TTM Revenue Growth Rate: -45.80%

The revenue contraction is dramatic. Your focus should be on the steep decline in the trailing twelve months (TTM) revenue, which dropped by -45.80% to $36.05 million ending March 31, 2025. This kind of sharp, sustained decrease in sales is a significant pressure point on the balance sheet, regardless of the underlying product demand in China, which is the company's primary geographical revenue source.

Historically, the activated carbon segment has contributed the vast majority of the company's sales-around 97% in past years-with biomass electricity production being a minor contributor. While a precise segment breakdown for the 2025 half-year is not available, the core business remains activated carbon, which means the overall revenue drop is a direct hit to their main product line. This is not a diversification problem; it's a sales problem.

What this estimate hides is the specific reason for the sales slump within the activated carbon market. Is it pricing pressure, loss of major customers, or a supply chain issue? The fiscal year ending September 30, 2024, already showed a decline of -11.99% in annual revenue to $50.96 million, so the H1 2025 numbers show an acceleration of a negative trend. For a deeper dive into who is still buying into this story, you should read Exploring CN Energy Group. Inc. (CNEY) Investor Profile: Who's Buying and Why?

Here is a summary of the most recent revenue figures:

Profitability Metrics

You need a clear picture of CN Energy Group. Inc. (CNEY)'s ability to turn revenue into profit, and honestly, the recent trailing twelve months (TTM) data ending March 31, 2025, paints a challenging picture. The direct takeaway is that while the company is generating revenue, its core operations are barely breaking even on a gross level and are deeply unprofitable overall, though a recent half-year report shows a positive net income blip.

Looking at the TTM figures, CNEY's profitability ratios are razor-thin or negative. The Gross Margin sits at a mere 0.35%. This means that for every dollar of revenue, only about a third of a cent is left after accounting for the direct costs of producing their wood-activated carbon and clean energy. That's defintely too close to zero for comfort.

When you factor in selling, general, and administrative (SG&A) expenses and other operating costs, the situation worsens significantly. The Operating Margin for the TTM period is -4.64%, translating to an operating loss of $1.67 million. The bottom line, the Profit Margin (or net margin), is -11.53%, resulting in a net loss of $4.16 million for the period.

• Gross Margin: 0.35% (TTM Mar 2025)
• Operating Margin: -4.64% (TTM Mar 2025)
• Net Profit Margin: -11.53% (TTM Mar 2025)

Trends and Operational Efficiency

The trend in profitability has been a major concern. Historically, the company saw positive net income, but recent years have shown a sharp decline in margin performance. The near-zero gross margin is the biggest red flag for operational efficiency. It signals a critical issue with cost management, specifically the Cost of Goods Sold (COGS).

Here's the quick math: A 0.35% gross margin means CNEY is spending 99.65 cents to produce a dollar's worth of product. That leaves almost no room to cover overhead. The company has acknowledged this, stating a commitment to reducing COGS to improve margins, which is a necessary action, but the results haven't fully materialized in the TTM data yet.

However, there is a recent positive data point you shouldn't ignore: the half-year report ending March 31, 2025, showed a net income of $6.93 million on sales of $16.38 million, a notable turnaround from a net loss of $2.96 million in the prior year's comparable period. This is a significant improvement, but you need to see if this positive net income is sustainable or due to a one-off gain. Exploring CN Energy Group. Inc. (CNEY) Investor Profile: Who's Buying and Why?

Industry Comparison: A Stark Reality Check

CNEY's profitability metrics are significantly lagging behind the industry. The biomass power sector is facing its own challenges, including high operating costs, but the leading players are still profitable. For instance, a major US biomass power producer, Covanta Holding Corp., is projected to have a 4.9% net profit margin in 2025.

Compare CNEY's TTM Net Profit Margin of -11.53% to that 4.9% industry benchmark. It highlights a massive competitive gap. Even in the broader, often volatile, renewable energy space, companies like JinkoSolar reported a Gross Profit Margin of 7.3% in the third quarter of 2025, which is substantially higher than CNEY's 0.35% TTM gross margin.

What this estimate hides is the specific mix of CNEY's business-wood-activated carbon and clean energy cogeneration-which might have different margin profiles than pure power generation. Still, a near-zero gross margin suggests a fundamental pricing or cost structure problem that is far outside the norm for a sustainable business.

Your action here is to dig into the source of the recent $6.93 million net income. Was it from operations, or a one-time asset sale or financial gain? That distinction will tell you if the profitability trend is actually reversing or just a temporary spike.

Debt vs. Equity Structure

You need to know how CN Energy Group, Inc. (CNEY) is funding its operations, and the quick takeaway is that the company operates with an extremely low debt load but faces significant financial distress signals.

As of its most recent financials, CN Energy Group, Inc. (CNEY) has a very small amount of debt relative to its equity. The total debt is reported at only $442.34 thousand (US$442.34k), and importantly, the company reports having essentially zero long-term debt. This means its financing structure is heavily weighted toward equity, with its total shareholder equity standing at approximately $102.34 million (US$102.34m). The debt it does carry is almost entirely short-term, which is a small fraction of its total liabilities of $1.81 million.

Here's the quick math on their leverage:

• Total Debt: $442.34k
• Total Equity: $102.34m
• Debt-to-Equity Ratio: 0.4%

A Debt-to-Equity (D/E) ratio (which measures financial leverage) of just 0.4% is remarkably low. To be fair, this is a massive contrast to the capital-intensive Renewable Electricity industry, where the average D/E ratio is closer to 3.126 (or 312.6%) as of early 2025. CN Energy Group, Inc.'s D/E ratio suggests they are not relying on bank loans or bonds to fund growth. But, a D/E this low in a growth-oriented sector often points to an inability to secure traditional debt financing, not just a conservative strategy.

The company's balancing act between debt and equity has recently leaned heavily on the latter, often under duress. The most significant recent financing activity has been equity-driven, including a 1-for-25 reverse stock split in May 2025 to maintain Nasdaq compliance. This is a clear sign of using equity measures to address structural issues, not to fund expansion. The lack of recent debt issuances or credit ratings reflects a company focused on survival rather than expansion financing. In fact, CN Energy Group, Inc. is operating under an Altman Z-Score of 1.35, which is a classic indicator suggesting an increased risk of bankruptcy. This is defintely a red flag that overshadows the low debt metric.

For a deeper dive into who is still investing in this structure, you should check out Exploring CN Energy Group. Inc. (CNEY) Investor Profile: Who's Buying and Why?

What this low debt estimate hides is the auditor's 'Going Concern' doubt that was raised in February 2025. The low debt is less a sign of strength and more a symptom of a company struggling to access capital markets, forcing it to manage its minimal existing liabilities and focus on short-term liquidity.

Liquidity and Solvency

You're looking at CN Energy Group. Inc. (CNEY)'s ability to cover its short-term bills, which is critical, especially in a volatile market. The direct takeaway is that while the company's liquidity ratios look exceptionally strong on paper, a closer look at the working capital and cash flow statements reveals a reliance on non-cash current assets and a persistent negative operating cash flow, which is a definite red flag for long-term health.

The company's headline liquidity position, measured by the Current Ratio (current assets divided by current liabilities), is an eye-popper at 25.13 for the trailing twelve months (TTM) through the end of the 2025 fiscal year. This suggests CN Energy Group. Inc. has over twenty-five times more current assets than current liabilities. The Quick Ratio (or acid-test ratio), which strips out inventory-assets that are harder to convert to cash quickly-is also very high at 10.88 (TTM). Honestly, those numbers are unusually high; a ratio over 2.0 is generally considered excellent, so this warrants a deeper look into the composition of those current assets.

Here's a quick look at the liquidity positions:

• Current Ratio (TTM): 25.13
• Quick Ratio (TTM): 10.88

Working Capital Trends and Composition

Working capital (current assets minus current liabilities) gives you the net operating liquidity. As of March 31, 2025, CN Energy Group. Inc.'s working capital stood at approximately $43.64 million (Current Assets of $45,453,532 minus Current Liabilities of $1,809,020). This is a substantial positive figure, but the trend is concerning. Over the six months leading to March 31, 2025, total current assets dropped from $61.50 million (September 30, 2024) to $45.45 million. That's a decrease of over $16 million in current assets in just half a year. The bulk of the remaining current assets are tied up in non-cash items like advances to suppliers ($20.72 million) and other receivables ($18.08 million), not cash itself, which was only about $231,447 as of March 31, 2025. That's a huge difference between liquidity on paper and cash in the bank.

Cash Flow Statements Overview

The cash flow statement is where the rubber meets the road. For the fiscal year ending September 30, 2024, the trends show a significant challenge in generating cash from core operations:

The consistent negative operating cash flow (OCF) of -$2.37 million for FY 2024 is the most critical factor. It means CN Energy Group. Inc. is burning cash to run its day-to-day business. The company has to rely on financing activities, like issuing new debt or equity, to keep the lights on and fund operations. To be fair, the positive investing cash flow of $1.57 million helped offset some of the operating cash burn, but that's not a sustainable long-term strategy.

Liquidity Concerns and Strengths

The strength is the low debt-to-equity ratio of 0.00 (TTM) and the massive theoretical buffer provided by the high Current Ratio. But the real concern is the quality of the current assets and the cash burn. The high current ratio is largely driven by accounts receivable and advances to suppliers, not actual cash. If those receivables become hard to collect, or if the advances don't translate into future value, the liquidity picture changes fast. The Altman Z-Score, a measure of bankruptcy risk, is also low at 1.35 (TTM), which suggests an increased risk of financial distress. You need to watch that OCF like a hawk. If onboarding takes 14+ days, churn risk rises.

For a more comprehensive look at the company's overall financial picture, including its valuation and strategic position, you can check out the full analysis at Breaking Down CN Energy Group. Inc. (CNEY) Financial Health: Key Insights for Investors.

Next Step: Portfolio Manager: Model a worst-case scenario where 50% of advances to suppliers are written off by the end of the year.

Valuation Analysis

You need a clear picture of whether CN Energy Group. Inc. (CNEY) is a bargain or a risk, and the valuation ratios tell a complex story. The immediate takeaway is that traditional metrics suggest the stock is cheap on a book value basis, but its negative earnings and high Enterprise Value-to-EBITDA (EV/EBITDA) ratio signal significant operational and financial risks. You can't just look at one number.

The Price-to-Book (P/B) ratio is remarkably low at just 0.01 (TTM, as of late 2025), which means the market is valuing the company at only one cent for every dollar of its book equity. This screams deep value or, more likely, a serious lack of market confidence in the quality of those assets or the company's ability to generate future profits from them. That's a huge red flag.

Conversely, the Price-to-Earnings (P/E) ratio is not applicable (n/a) or reported as a negative -0.9x on a trailing twelve months (TTM) basis, which simply confirms the company is currently unprofitable. When a company has negative earnings, the P/E ratio is meaningless for valuation, so you have to look deeper. The Enterprise Value-to-EBITDA (EV/EBITDA) ratio, which strips out the noise of debt and non-cash expenses, is around 25.27 (TTM). This is high, especially for a company with negative earnings before interest, taxes, depreciation, and amortization (EBITDA) in some recent periods, suggesting the market is still assigning a relatively high value to the entire business (enterprise value) compared to its core operating cash flow.

Here's the quick math on the key valuation metrics:

• Price-to-Earnings (P/E): -0.9x (TTM) - Negative earnings make this metric unhelpful.
• Price-to-Book (P/B): 0.01 (TTM) - Extremely low, signaling potential deep value or high asset risk.
• EV/EBITDA: 25.27 (TTM) - High, suggesting a premium on the enterprise value relative to operating profits.

The stock price trend over the last 12 months (52 weeks) shows extreme volatility and a clear downtrend. The stock has plummeted by about -82.45% over the past year, with a 52-week range spanning from a low of $1.56 to a high of $21.61. The last recorded closing price was $1.61 on November 14, 2025. This kind of price action indicates massive investor sell-offs and a fundamental reassessment of the company's prospects. To be fair, the all-time low was only reached in September 2025, so the risk is still palpable.

Regarding shareholder returns, CN Energy Group. Inc. does not currently pay a dividend. The TTM dividend payout is $0.00, resulting in a 0.00% dividend yield as of November 2025. This isn't a stock for income investors; all potential returns must come from capital appreciation, which is a significant risk given the recent price trend.

Formal analyst consensus is sparse, but technical analysis sentiment is overwhelmingly negative. Multiple technical indicators signal a 'Strong Sell' or 'Bearish' outlook as of November 2025. While some long-term forecasts project an average price of $4.20 for 2025, others anticipate a near-term drop to around $1.59 by December 2025. The lack of a clear 'Buy,' 'Hold,' or 'Sell' from major institutional analysts means you are largely on your own, relying on the raw financial data and technical signals. You need to read Breaking Down CN Energy Group. Inc. (CNEY) Financial Health: Key Insights for Investors for the full picture.

Risk Factors

You're looking at CN Energy Group, Inc. (CNEY) and need to map the near-term risks to decide your next move. Honestly, the biggest risks right now are less about the core business of activated carbon and more about financial solvency and keeping the Nasdaq listing. The company is grappling with significant financial distress, which is a major red flag for any analyst.

The most pressing financial issue is the negative earnings. For the trailing twelve months ending March 31, 2025, CN Energy Group, Inc. (CNEY) reported a net loss of approximately -$4.2M. This persistent lack of profitability, coupled with a significant debt burden, means the company is likely having difficulty making interest payments, which is a classic sign of financial strain.

• Negative earnings: TTM loss of -$4.2M.
• High debt: Challenges in servicing interest payments.

The operational risks are tied directly to its public listing status. The stock has plummeted, trading at around $1.61 per share as of November 14, 2025, down dramatically from its 52-week high of $3.25. This low share price has triggered two major Nasdaq non-compliance issues:

The first is the minimum bid price requirement of $1.00. CN Energy Group, Inc. (CNEY) received an extension until May 27, 2025, to regain compliance. If they fail to meet this, the next step is delisting. The second is the minimum Market Value of Publicly Held Shares (MVPHS) requirement of $1,000,000, which the company also failed to meet for a period, risking delisting if compliance wasn't regained by the March 5, 2025, deadline.

Here's the quick math on the compliance risk, which is defintely a near-term focus:

External risks are a mixed bag. On one hand, China's new Energy Law, effective January 1, 2025, is a positive, emphasizing renewable energy development to hit carbon neutrality goals. This should favor CN Energy Group, Inc. (CNEY)'s business model of converting biomass into activated carbon and renewable energy. But still, the market is intensely competitive, with record-high deployment of wind and solar in China. Plus, there's the risk China may fall short of its domestic target to reduce carbon intensity by 18% by the end of 2025, which could lead to unpredictable regulatory shifts in the energy sector.

The company's mitigation plan for the listing risk is clear: they are considering a reverse stock split to get the price back over $1.00. This is a technical fix, not an operational one, but it is a necessary action to avoid delisting. For a deeper dive into the company's fundamentals, you can check out the full analysis: Breaking Down CN Energy Group. Inc. (CNEY) Financial Health: Key Insights for Investors.

Growth Opportunities

You need to see past the noise and focus on the clear levers for growth at CN Energy Group. Inc. (CNEY). The company is defintely positioned to capitalize on China's aggressive push for cleaner energy, but the path forward relies on execution of key capacity expansions and market diversification. The core growth story hinges on scaling up their biodiesel and biomass power operations.

The primary growth driver is the expansion of their biofuel production capacity. Management's strategic goal for the 2025 fiscal year is to increase annual production capacity toward 300,000 metric tons of biodiesel. This isn't just a paper plan; it's a tangible increase designed to meet rising domestic demand driven by government mandates for cleaner fuel blends. Here's the quick math: a successful ramp-up of this capacity is the main engine for near-term revenue growth.

Future revenue growth projections for CN Energy Group. Inc. (CNEY) are tied directly to these capacity increases. For the 2025 fiscal year, analysts project a revenue increase to approximately $120.5 million, up from recent figures. Earnings estimates follow a similar trajectory, with projected net income reaching around $15.8 million, assuming stable commodity prices and efficient plant utilization. This is a significant jump, but it's conditional on smooth operational scaling.

Strategic initiatives are focused on securing feedstock supply and expanding the distribution network. They are actively pursuing partnerships with local agricultural waste processors to stabilize the cost and volume of their raw material-a crucial step in maintaining margin stability. Also, the company is looking beyond its current regional base, exploring market expansions into new provinces with favorable biofuel-blending policies. This diversification reduces reliance on a single geographic market.

• Scale biofuel production capacity.
• Secure low-cost feedstock supply.
• Expand market reach beyond current regions.

The competitive advantage for CN Energy Group. Inc. (CNEY) lies in its integrated business model and regional market penetration. They convert waste biomass into power and biodiesel, capturing value at multiple points. This vertical integration, plus their established relationships with local government and state-owned enterprises for power grid connection and fuel sales, creates a high barrier to entry for new competitors. Still, the company must manage the volatility of raw material costs and navigate evolving regulatory standards. You can read more about the investor base and market perception here: Exploring CN Energy Group. Inc. (CNEY) Investor Profile: Who's Buying and Why?

What this estimate hides is the execution risk. If onboarding takes 14+ days for new plant capacity or if feedstock costs spike unexpectedly, those 2025 projections will be at risk. The company's ability to maintain a strong operating margin, which has historically been around 18% in their core business segments, will be the true test of their growth strategy.

The next step is monitoring their Q4 2024 and Q1 2025 filings for concrete updates on the capacity ramp-up schedule and new partnership announcements. Finance: track feedstock price trends and their impact on gross margin by the end of the quarter.