Rubber Leaf Inc

Tiny China/HK auto-sealing supplier whose flattering headline margins stem from a one-off related-party disposal gain.

Strengths

• Tier-1 supplier relationships with eGT and Volkswagen; established sealing-strip technology
• Low reported leverage and a 58% net margin — but driven by a non-recurring gain

Risks

• Sold its entire operating subsidiary (RLSP) to a related party (CEO owns 30% of buyer); operating margin -38%, negative OCF
• ROE 998%/ROA 47% are disposal-gain artifacts; current ratio 0.57 and China-governance risk

Notable findings

• Weak liquidityCurrent ratio 0.58 (<1)
• Revenue declineRevenue -13.2% YoY