MeiHua Holdings GroupLtd (SHSE:600873) - Share price, News & Analysis

Q: What is the Fair Price of 600873 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

600873 (CN¥11.4) is trading below our estimate of [[fair value]] (CN¥65.66)

600873 fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	2/6
Past Performance	6/6
Financial Health	6/6
Dividends	5/6

600873 Stock Overview

MeiHua Holdings Group Co.,Ltd provides amino acid nutrition and health solutions.

Rewards

Trading at 82.6% below our estimate of its fair value

Earnings are forecast to grow 14.88% per year

Earnings grew by 170.9% over the past year

Risk Analysis

Unstable dividend track record

MeiHua Holdings GroupLtd Competitors

Angel Yeast

SHSE:600298

CN¥42.4b

Juewei Food

SHSE:603517

CN¥35.5b

Chongqing Fuling Zhacai Group

SZSE:002507

CN¥30.6b

Chacha Food Company

SZSE:002557

CN¥28.8b

Price History & Performance

Summary of all time highs, changes and price drops for MeiHua Holdings GroupLtd
Historical stock prices
Current Share Price	CN¥11.40
52 Week High	CN¥11.39
52 Week Low	CN¥5.41
Beta	0.44
1 Month Change	20.25%
3 Month Change	25.28%
1 Year Change	105.04%
3 Year Change	130.30%
5 Year Change	99.65%
Change since IPO	3.24%

Shareholder Returns

	600873	CN Food	CN Market
7D	4.6%	4.0%	2.3%
1Y	105.0%	-9.1%	-8.1%

Return vs Industry: 600873 exceeded the CN Food industry which returned -9.1% over the past year.

Return vs Market: 600873 exceeded the CN Market which returned -8.1% over the past year.

Price Volatility

Is 600873's price volatile compared to industry and market?
600873 volatility
600873 Average Weekly Movement	6.5%
Food Industry Average Movement	7.3%
Market Average Movement	7.3%
10% most volatile stocks in CN Market	10.2%
10% least volatile stocks in CN Market	5.1%

Stable Share Price: 600873 is not significantly more volatile than the rest of CN stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: 600873's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2002	12,952	Jun He	https://www.meihuagrp.com

MeiHua Holdings Group Co.,Ltd provides amino acid nutrition and health solutions. Its products include food additives, including sodium glutamate, natamycin, disodium 5'-ribonucleotide, disodium inosinate, xanthan gum, pullulan, and trehalose; condiments, such as monosodium glutamate (MSG); amino acid for feed comprising valine, L-lysine sulphate and HCL, L-threonine, L-tryptophane, corn gluten meal for feedstuffs, corn husk powder, corn fiber feed, and boutique MSG residue. The company also provides pharmaceutical amino acids consisting of L-glutamine, L-leucine, L-isoleucine, L-valine, BCAA, L-proline, inosine, vernine, and adenosine; colloids; enteric, cellulose, gelatin, and pullulan capsules; and fertilizers, which include soil conditioners.

MeiHua Holdings GroupLtd Fundamentals Summary

How do MeiHua Holdings GroupLtd's earnings and revenue compare to its market cap?
600873 fundamental statistics
Market Cap	CN¥34.39b
Earnings (TTM)	CN¥3.10b
Revenue (TTM)	CN¥24.24b

11.2x

P/E Ratio

1.4x

P/S Ratio

Is 600873 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
600873 income statement (TTM)
Revenue	CN¥24.24b
Cost of Revenue	CN¥18.94b
Gross Profit	CN¥5.30b
Other Expenses	CN¥2.20b
Earnings	CN¥3.10b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.02
Gross Margin	21.85%
Net Profit Margin	12.79%
Debt/Equity Ratio	48.6%

How did 600873 perform over the long term?

See historical performance and comparison

Dividends

3.5%

Current Dividend Yield

40%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 600873 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 600873?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 600873. This is calculated by dividing 600873's market cap by their current preferred multiple.
What is 600873's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥34.39b

600873 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.5x
Enterprise Value/EBITDA	7.4x
PEG Ratio	0.8x

Price to Earnings Ratio vs Peers

How does 600873's PE Ratio compare to its peers?

600873 PE Ratio vs Peers

The above table shows the PE ratio for 600873 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	37x
600298 Angel Yeast	35.5x	22.9%	CN¥42.4b
603517 Juewei Food	41.3x	24.2%	CN¥35.5b
002507 Chongqing Fuling Zhacai Group	40.4x	16.8%	CN¥30.6b
002557 Chacha Food Company	29.4x	17.4%	CN¥28.8b
600873 MeiHua Holdings GroupLtd	11.2x	14.9%	CN¥34.4b

Forward PE

Price-To-Earnings vs Peers: 600873 is good value based on its Price-To-Earnings Ratio (11.2x) compared to the peer average (37x).

Price to Earnings Ratio vs Industry

How does 600873's PE Ratio compare vs other companies in the CN Food Industry?

Price-To-Earnings vs Industry: 600873 is good value based on its Price-To-Earnings Ratio (11.2x) compared to the CN Food industry average (42.9x)

Price to Earnings Ratio vs Fair Ratio

What is 600873's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

600873 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	11.2x
Fair PE Ratio	31.5x

Price-To-Earnings vs Fair Ratio: 600873 is good value based on its Price-To-Earnings Ratio (11.2x) compared to the estimated Fair Price-To-Earnings Ratio (31.5x).

Share Price vs Fair Value

What is the Fair Price of 600873 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 600873 (CN¥11.4) is trading below our estimate of fair value (CN¥65.66)

Significantly Below Fair Value: 600873 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 600873 is good value based on its PEG Ratio (0.8x)

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Future Growth

How is MeiHua Holdings GroupLtd forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

14.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 600873's forecast earnings growth (14.9% per year) is above the savings rate (3.2%).

Earnings vs Market: 600873's earnings (14.9% per year) are forecast to grow slower than the CN market (23.9% per year).

High Growth Earnings: 600873's earnings are forecast to grow, but not significantly.

Revenue vs Market: 600873's revenue (10.3% per year) is forecast to grow slower than the CN market (17.5% per year).

High Growth Revenue: 600873's revenue (10.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 600873's Return on Equity is forecast to be high in 3 years time (21.8%)

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Past Performance

How has MeiHua Holdings GroupLtd performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

13.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 600873 has high quality earnings.

Growing Profit Margin: 600873's current net profit margins (12.8%) are higher than last year (6.2%).

Past Earnings Growth Analysis

Earnings Trend: 600873's earnings have grown by 13.2% per year over the past 5 years.

Accelerating Growth: 600873's earnings growth over the past year (170.9%) exceeds its 5-year average (13.2% per year).

Earnings vs Industry: 600873 earnings growth over the past year (170.9%) exceeded the Food industry -5.9%.

Return on Equity

High ROE: 600873's Return on Equity (26.3%) is considered high.

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Financial Health

How is MeiHua Holdings GroupLtd's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 600873's short term assets (CN¥9.2B) exceed its short term liabilities (CN¥5.7B).

Long Term Liabilities: 600873's short term assets (CN¥9.2B) exceed its long term liabilities (CN¥4.8B).

Debt to Equity History and Analysis

Debt Level: 600873's net debt to equity ratio (16.3%) is considered satisfactory.

Reducing Debt: 600873's debt to equity ratio has reduced from 55.6% to 48.6% over the past 5 years.

Debt Coverage: 600873's debt is well covered by operating cash flow (82.5%).

Interest Coverage: 600873 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is MeiHua Holdings GroupLtd current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.51%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 600873's dividend (3.51%) is higher than the bottom 25% of dividend payers in the CN market (0.47%).

High Dividend: 600873's dividend (3.51%) is in the top 25% of dividend payers in the CN market (1.92%)

Stability and Growth of Payments

Stable Dividend: 600873's dividend payments have been volatile in the past 10 years.

Growing Dividend: 600873's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (39.9%), 600873's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (31.3%), 600873's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

CN¥12m

CEO Compensation

CEO

Jun He (48 yo)

5.42yrs

Tenure

CN¥12,110,000

Compensation

Jun He has been a General Manager of Meihua Holdings Group Co., Ltd. since January 17, 2017. Jun He served as the Deputy General Manager of Meihua Holdings Group Co., Ltd.until January 17, 2017. Jun He se...

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/01 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31