Breaking Down IT Tech Packaging, Inc. (ITP) Financial Health: Key Insights for Investors

You're looking at IT Tech Packaging, Inc. (ITP) and seeing a classic micro-cap conundrum: the stock is trading around $0.22 as of late November 2025, with a tiny market capitalization of just $3.70 million, but the operational story has a pulse. Honestly, it's a high-wire act. The company did manage to grow its business, reporting Q3 2025 revenue of $25.60 million, which is a 2.22% jump year-over-year, so they are selling more corrugating medium paper. But here's the quick math: that top-line growth didn't translate to profit, with a net loss of $1.45 million for the quarter, even though that loss was defintely smaller than last year's. The core issue is the razor-thin gross margin, which only nudged up to 7.90%, and that May 2025 public offering of 6.9 million shares at $0.20 per share reminds us that dilution is a constant risk for companies this size. We need to break down if that revenue momentum can finally outrun the cost structure and the capital market pressures; that's the real question.

Revenue Analysis

You need to know where the money is coming from, especially with a company like IT Tech Packaging, Inc. (ITP) that operates in a niche market. The direct takeaway is that ITP's revenue is almost entirely dependent on a single product line, Corrugating Medium Paper (CMP), and while sales volume is up, pricing power remains a challenge.

For the first nine months of the 2025 fiscal year, IT Tech Packaging, Inc. reported total revenue of $61.29 million. This figure represents a year-over-year (YoY) revenue growth rate of 5.32% compared to the same period in the prior year. That's a decent uptick, but it masks a critical concentration risk that investors defintely need to factor into their models.

Here's the quick math on where that revenue comes from:

• Primary Product: Corrugating Medium Paper (CMP).
• Segment Contribution: CMP accounted for virtually 100% of the total revenue in the most recently reported quarter, Q3 2025.
• Regional Focus: The company's operations are based in China, making its revenue streams highly sensitive to domestic market demand and regulatory changes there.

The company is essentially a pure-play paper manufacturer. That's a simple business model, but it also means there are no diversified segments to offset a downturn in the paper industry. If you want a deeper look at the core business philosophy driving this focus, you can review their Mission Statement, Vision, & Core Values of IT Tech Packaging, Inc. (ITP).

The 5.32% revenue growth for the nine months ended September 30, 2025, was primarily driven by an increase in the sales volume of CMP. This tells you they are moving more product, which is a positive sign for operational capacity. But, to be fair, that volume increase was partially offset by a decrease in the average selling prices (ASPs) of CMP products. Simply put, they sold more, but they had to sell it cheaper.

This dynamic creates a margin squeeze, which is a near-term risk. Look at the segment breakdown for the third quarter of 2025, which saw revenue of $25.60 million. The revenue was up 2.07% YoY, but the underlying trend is clear: volume is the engine, not price.

What this estimate hides is the persistent pressure on gross profit, which decreased by 39.45% YoY to $3.38 million for the nine-month period, largely due to the decline in CMP ASPs and increased unit material costs. Your action here is to watch for any signs of successful price increases in Q4 2025 or Q1 2026, or a significant drop in raw material costs, as volume alone won't fix the margin issue.

Profitability Metrics

You're looking at IT Tech Packaging, Inc. (ITP) because you need to know if the core business is working, and the simple answer is that, for 2025 year-to-date (YTD), it is not generating a profit. The company is currently operating at a significant loss, which is a major red flag for investors.

For the nine months ended September 30, 2025, IT Tech Packaging, Inc. reported total revenue of $61.29 million, but its cost structure has led to deeply negative margins across the board. The company is actively fighting a challenging market, but the numbers show the fight is uphill.

• Gross Profit Margin: 5.51%
• Operating Profit Margin: Approx. -9.99%
• Net Profit Margin: Approx. -11.26%

Margin Erosion and Profitability Trends

The trend in profitability is defintely concerning. For the nine-month period ended September 30, 2025, IT Tech Packaging, Inc.'s gross profit plummeted by 39.45% year-over-year (YoY). This caused the gross margin-the profit left after covering the cost of goods sold-to drop a substantial 4.08 percentage points to just 5.51%. This is a clear signal that the company is struggling to manage its input costs, like raw materials for corrugating medium paper (CMP), or that it lacks pricing power in the market.

In the third quarter of 2025 (Q3 2025), the gross margin did show a slight improvement to 7.90% on revenue of $25.60 million, but this is still a thin cushion. The operating loss for Q3 2025 was $0.99 million, showing that even with a slightly better gross margin, the company's selling, general, and administrative expenses continue to push it into the red.

Comparison with Industry Averages

When you stack IT Tech Packaging, Inc.'s profitability against the broader paper and packaging sector, the gap is stark. While the industry is facing its own cost headwinds, IT Tech Packaging, Inc.'s margins are significantly underperforming. For context, the packaging sector's average operating margin is cited around 18.2%, and even a major competitor like Graphic Packaging Holding Company (GPK) maintains an operating margin of about 10.3%, which is considered in line with its history. IT Tech Packaging, Inc.'s YTD operating margin of roughly -9.99% indicates a fundamental disconnect from industry profitability norms.

Analysis of Operational Efficiency

Here's the quick math on their biggest operational problem: the company's net loss for the nine-month period was $6.90 million, but the suspended Tengsheng Paper subsidiary alone accounted for $6.6 million in losses. That single idle facility is responsible for about 75% of the total net loss, representing a catastrophic failure in asset utilization.

This massive drag on earnings is why the company has issued an explicit going concern warning-it raises substantial doubt about its ability to continue operating. The company is running its active equipment to cover massive non-cash depreciation costs, not to generate sustainable operating profit. This is a classic case where a non-performing asset is masking the true operational performance of the rest of the business.

If you want a deeper look at the shareholder base and who is still betting on this turnaround, you should read Exploring IT Tech Packaging, Inc. (ITP) Investor Profile: Who's Buying and Why?

Action: Finance needs to model the impact of a complete write-down or sale of the Tengsheng subsidiary by the end of the year to show a clean operating profit baseline.

Debt vs. Equity Structure

You're looking at IT Tech Packaging, Inc. (ITP) and wondering how they pay for their operations-is it mostly debt or shareholder money? The short answer is that the company is overwhelmingly financed by equity, making it one of the least leveraged companies in the paper sector right now. This is defintely a low-risk balance sheet.

As of late 2025, IT Tech Packaging, Inc.'s total debt stands at a remarkably low $9.6 million. To put that in perspective, the company's total shareholder equity is around $156.0 million. Here's the quick math on how that capital structure breaks down:

• Total Debt: $9.6 million
• Total Equity: $156.0 million

The debt itself is heavily skewed toward short-term obligations, which is something to keep an eye on. Their short-term debt is $8.3 million, leaving only about $1.1 million in long-term debt. That means the bulk of their debt is due within the next twelve months, but given their overall equity cushion, the near-term repayment risk is minimal.

The most telling figure is the Debt-to-Equity (D/E) ratio, which measures total liabilities against shareholder equity. IT Tech Packaging, Inc.'s D/E ratio is approximately 6.5% (or 0.065). That is incredibly low. For context, the industry average for Paper Products is around 0.97 (or 97%), and the median for the broader Paper and Allied Products sector is even higher, closer to 1.90 (or 190%).

This means for every dollar of shareholder equity, IT Tech Packaging, Inc. has only about $0.07 in debt, while a typical industry peer carries nearly a dollar or more. This is a conservative financing approach that limits interest expense but also suggests they aren't aggressively using cheap debt to expand, which can be a double-edged sword for growth-focused investors. For a deeper dive into who is betting on this equity-heavy structure, you should check out Exploring IT Tech Packaging, Inc. (ITP) Investor Profile: Who's Buying and Why?.

In terms of recent financing, the company has leaned into equity over debt. In May 2025, IT Tech Packaging, Inc. announced a public offering of common stock, selling 6,899,500 shares at $0.20 per share, with gross proceeds expected to be approximately $1.4 million. This was a move to secure working capital through equity funding, not debt refinancing. They are clearly prioritizing a clean balance sheet, as there have been no major debt issuances or credit rating changes reported in 2025.

The company's financing strategy is simple: rely on equity and retained earnings, not leverage. This table summarizes the key metrics you need to know for the 2025 fiscal year:

Liquidity and Solvency

You need to know if IT Tech Packaging, Inc. (ITP) has enough near-term cash to cover its bills. The short answer is yes, but the margin is thin on the most stringent measure. For a paper and packaging company operating in a capital-intensive industry, their liquidity position is generally adequate, though it warrants close monitoring.

Looking at the most recent data (as of November 2025), ITP's Current Ratio sits at approximately 1.53. This means the company has $1.53 in current assets (cash, receivables, inventory) for every $1.00 in current liabilities (bills due within a year). A ratio above 1.0 is the minimum you want to see, so this is a decent starting point. However, the Quick Ratio (or acid-test ratio), which strips out inventory-the least liquid current asset-is only about 1.01. This is defintely a tight squeeze, meaning that without selling inventory, their most liquid assets barely cover short-term debt.

Here's the quick math on working capital (Current Assets minus Current Liabilities): for the second quarter of 2025, ITP's short-term assets of approximately $35.8 million exceeded their short-term liabilities of about $18.7 million, resulting in a positive working capital of roughly $17.1 million. A positive working capital is a strength, but the trend shows some pressure. In Q2 2025, the change in working capital was actually a decrease of $158.21 thousand, suggesting a slight tightening of the screws on the balance sheet.

The cash flow statement for the second quarter of 2025 tells a more dynamic story:

• Operating Cash Flow (OCF): The company generated $1.36 million from core operations in Q2 2025, which is a positive sign, though some reports show a quarterly negative OCF of -$1.11 million as of June 2025. This volatility is a key risk.
• Investing Cash Flow (ICF): The company spent a modest $30 thousand on investing activities, which is very low for a manufacturer and suggests minimal capital expenditure (CapEx) for expansion or maintenance.
• Financing Cash Flow (FCF): ITP brought in $1.65 million from financing activities, which could be new debt or equity, helping to shore up the cash position, which ended the period at approximately $6.47 million.

The main liquidity strength is that current assets are greater than current liabilities, and ITP is not heavily weighted with long-term debt. But, the risk is in that 1.01 Quick Ratio. It means they rely on timely collection of receivables and efficient inventory management to pay their immediate bills. For a deeper dive into the company's long-term strategy, check out the Mission Statement, Vision, & Core Values of IT Tech Packaging, Inc. (ITP).

The low capital expenditure is also a concern; a lack of investment in property, plant, and equipment (PP&E) can hurt future competitiveness and operational efficiency. You need to see that OCF stabilize and grow to comfortably fund CapEx without relying on financing.

Valuation Analysis

You're looking at IT Tech Packaging, Inc. (ITP) and trying to figure out if it's a deep-value play or a value trap. Honestly, the valuation picture is complex because the company is currently unprofitable, which immediately throws out the most common metric. The stock is trading at roughly $0.218 per share as of late November 2025, and it has been a rough ride, with the price down 2.83% over the last 12 months.

When a company has negative earnings, its Price-to-Earnings (P/E) ratio is useless for comparison. Here's the quick math: with a trailing twelve months (TTM) Earnings Per Share (EPS) of approximately ($1.02), the P/E ratio is negative, so we have to look deeper. The stock is cheap, but it's cheap for a reason. Its 52-week price range, for example, runs from a low of $0.151 to a high of $1.07, showing extreme volatility.

Key Valuation Ratios: What the Numbers Say

We need to focus on metrics that look past the net loss. The Enterprise Value-to-EBITDA (EV/EBITDA) ratio is the best place to start, as it measures the total value of the company (Enterprise Value) against its operating cash flow proxy (Earnings Before Interest, Taxes, Depreciation, and Amortization). This ratio is currently a very low 1.23. For a manufacturing company in the Basic Materials sector, a ratio this low often signals the market is pricing in significant risk or very little future growth.

Plus, the Price-to-Book (P/B) ratio is incredibly low at just 0.02. This means the stock is trading for just two cents for every dollar of its net asset value on the balance sheet. That's a massive discount to book value, which is usually the sign of a deeply undervalued stock, but it could also mean the market doesn't believe the book value is real or that the company has serious going-concern issues. Its TTM Revenue is around $78.94 million, but the market capitalization is only about $4.07 million, which is a huge disconnect.

• P/E Ratio: Negative (TTM EPS is -$1.02).
• P/B Ratio: Extremely low at 0.02.
• EV/EBITDA: Very low at 1.23.

Dividends and Analyst Sentiment

If you're looking for income, IT Tech Packaging, Inc. (ITP) is not the place to be. The company has not paid a dividend in years, so the dividend yield is 0%. This isn't a surprise for a company focused on navigating a turnaround, but it's defintely something to note if you rely on cash flow from your investments.

What this estimate hides is the lack of traditional Wall Street coverage. There is no clear analyst consensus of Buy, Hold, or Sell from major brokerage firms, with some sources explicitly stating 'N/A' for the consensus rating. While some technical models suggest a 'Sell Candidate' sentiment, the lack of institutional coverage means you are largely on your own for fundamental analysis. You should look at the company's long-term strategy, which you can read about here: Mission Statement, Vision, & Core Values of IT Tech Packaging, Inc. (ITP).

So, is it overvalued or undervalued? Based purely on the P/B and EV/EBITDA, IT Tech Packaging, Inc. (ITP) is technically undervalued compared to industry norms. But, the negative earnings and lack of analyst coverage signal that the market views the risk of a continued turnaround failure as substantial. It's a classic high-risk, high-reward situation where the low valuation is compensation for the uncertainty.

Risk Factors

You need to know the cold, hard reality of IT Tech Packaging, Inc. (ITP) before making a move, and honestly, the biggest near-term risk is the explicit going concern warning issued as of September 30, 2025. That's the most serious signal a company can give you. It means management has flagged substantial doubt about their ability to continue operating for the next twelve months due to continued losses and operational headwinds.

The financial risks are clear when you look at the 2025 fiscal data. For the nine months ended September 30, 2025, IT Tech Packaging, Inc. reported a net loss of $6.9 million, which is a loss of ($0.51) per share. Here's the quick math: while the company technically has a current ratio of 1.92, the working capital is artificially inflated by a Value Added Tax (VAT) recoverable of $13,307,848. When you strip that out-which you defintely should, since production is suspended-the net working capital is only about $3.79 million. That's a tight cushion when you're bleeding cash.

Operational and external risks compound the financial pressure. The company operates in the highly competitive paper products market in North China, and their profitability is vulnerable to increases in the unit cost of raw materials. Plus, the core business has been hobbled by suspended production at key facilities. The Tengsheng Paper operation was suspended through September 2025, and offset printing paper production was also halted, though it's expected to resume by the end of 2025.

We've also seen market action that adds uncertainty. The stock price stability itself became a new major risk noted in October 2025, following unusual trading activity observed in September 2025. This kind of volatility, especially for a company with a small market capitalization of around $3.70 million, can spook investors fast. For a deeper dive into the company's full financial picture, you can review our full analysis at Breaking Down IT Tech Packaging, Inc. (ITP) Financial Health: Key Insights for Investors.

Management is taking steps to mitigate these risks, focusing on governance and shoring up capital. They held their 2025 Annual General Meeting on October 31, 2025, to elect new directors and ratify an independent accounting firm. More practically, they are trying to retain talent by approving the 2025 Omnibus Equity Incentive Plan. On the financial side, they raised capital in May 2025 by issuing 6,899,500 shares at $0.20, bringing in approximately $1.4 million gross. Still, these actions are only a start against the magnitude of the losses.

Here are the key financial risks highlighted in the Q3 2025 filings:

• Going Concern Warning: Explicitly stated due to continued losses and cost pressures.
• Operational Suspension: Production at Tengsheng Paper was suspended through September 2025, making a large VAT asset unrecoverable short-term.
• Negative Financial Efficiency: The Altman Z-Score is low at 1.04, which historically suggests an increased risk of bankruptcy.

To put the financial strain into perspective, here are the core loss figures for the 2025 fiscal year to date:

Finance: Track the Q4 2025 resumption of offset printing paper production closely for any material impact on Q4 revenue.

Growth Opportunities

You're looking for a clear path forward with IT Tech Packaging, Inc. (ITP), and honestly, the growth story is less about explosive new markets and more about operational stability and product mix optimization. The direct takeaway is that near-term growth hinges on successfully bringing the high-margin offset printing paper line back online, which is expected to resume at the end of 2025.

The company's strategic location in North China, near the massive Beijing and Tianjin industrial region, is a permanent structural advantage. Plus, their core business model, which relies on recycled paper for most products, offers a sustainable cost edge, especially in a resource-constrained market. This focus on Corrugating Medium Paper (CMP) volume is what drove the nine-month 2025 revenue increase.

Here's the quick math on recent performance and what's driving it:

The revenue growth is positive, but the widening net loss and drop in EBITDA show the pressure on margins-a common issue when average selling prices (ASPs) for products like CMP decline, even if sales volume increases. You need to watch that gross profit closely; it decreased by 39.45% for the nine months ended September 30, 2025. That's a defintely a headwind.

Future Revenue and Earnings Drivers

The biggest near-term opportunity for IT Tech Packaging, Inc. (ITP) is a shift in its product mix. The company has three main product categories: CMP, offset printing paper, and tissue paper products. The offset printing paper production was suspended for a period, but its scheduled resumption at the end of 2025 is a critical catalyst. This product typically carries a higher margin than CMP, so its return to the sales mix should immediately help gross profit and, by extension, earnings.

The volume of Corrugating Medium Paper (CMP) sales is still the primary revenue driver, with sales volume increasing by 1.07% in Q3 2025. This steady volume growth, combined with a slight increase in CMP average selling prices (ASPs) in Q3 2025, offers a stable, albeit low-margin, foundation. The company is also making internal moves to better align interests for the long haul:

• Approved the 2025 Omnibus Equity Incentive Plan to retain key talent.
• Elected new directors to serve until the 2027 Annual Meeting, strengthening governance.
• Maintains a diversified product line, including tissue paper and single-use face masks.

What this estimate hides is the intense competition in the paper products industry, which will keep pressure on those ASPs. For a deeper dive into the shareholder base and market sentiment, you should be Exploring IT Tech Packaging, Inc. (ITP) Investor Profile: Who's Buying and Why?