Shanghai Pharmaceuticals Holding (SHSE:601607) - Share price, News & Analysis

Q: What is the Fair Price of 601607 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

601607 (CN¥16.99) is trading above our estimate of [[fair value]] (CN¥14.74)

601607 fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	1/6
Past Performance	2/6
Financial Health	4/6
Dividends	5/6

601607 Stock Overview

Rewards

Price-To-Earnings ratio (14.9x) is below the CN market (35.7x)

Earnings are forecast to grow 15.01% per year

Risk Analysis

Dividend of 2.47% is not well covered by earnings

Profit margins (1.9%) are lower than last year (2.7%)

Shareholders have been diluted in the past year

Shanghai Pharmaceuticals Holding Competitors

Huadong Medicine

SZSE:000963

CN¥73.4b

Jointown Pharmaceutical Group

SHSE:600998

CN¥20.9b

China National Medicines

SHSE:600511

CN¥19.3b

Qingdao Baheal Medical

SZSE:301015

CN¥13.9b

Price History & Performance

Summary of all time highs, changes and price drops for Shanghai Pharmaceuticals Holding
Historical stock prices
Current Share Price	CN¥16.99
52 Week High	CN¥28.64
52 Week Low	CN¥16.41
Beta	0.24
1 Month Change	-3.85%
3 Month Change	-9.29%
1 Year Change	-10.58%
3 Year Change	-5.87%
5 Year Change	-32.87%
Change since IPO	930.36%

Shareholder Returns

	601607	CN Healthcare	CN Market
7D	0.1%	-1.3%	1.3%
1Y	-10.6%	-24.2%	-9.7%

Return vs Industry: 601607 exceeded the CN Healthcare industry which returned -24.2% over the past year.

Return vs Market: 601607 matched the CN Market which returned -9.7% over the past year.

Price Volatility

Is 601607's price volatile compared to industry and market?
601607 volatility
601607 Average Weekly Movement	3.4%
Healthcare Industry Average Movement	5.3%
Market Average Movement	6.0%
10% most volatile stocks in CN Market	9.1%
10% least volatile stocks in CN Market	3.9%

Stable Share Price: 601607 is less volatile than 75% of CN stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: 601607's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1994	47,056	Man Cho	https://www.sphchina.com

Shanghai Pharmaceuticals Holding Co., Ltd., an investment holding company, researches, develops, manufactures, distributes, and retails pharmaceutical and healthcare products in the People’s Republic of China. It operates through four segments: Production, Distribution, Retail, and Others. The company offers chemicals and biochemicals, Chinese medicines, healthcare products, and medical devices in various therapeutic areas, including oncology, cerebrocardiovascular, CNS, general infection, immunology, digestive and metabolism, and respiratory.

Shanghai Pharmaceuticals Holding Fundamentals Summary

How do Shanghai Pharmaceuticals Holding's earnings and revenue compare to its market cap?
601607 fundamental statistics
Market Cap	CN¥55.99b
Earnings (TTM)	CN¥4.22b
Revenue (TTM)	CN¥221.12b

14.9x

P/E Ratio

0.3x

P/S Ratio

Is 601607 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
601607 income statement (TTM)
Revenue	CN¥221.12b
Cost of Revenue	CN¥192.34b
Gross Profit	CN¥28.78b
Other Expenses	CN¥24.56b
Earnings	CN¥4.22b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.14
Gross Margin	13.02%
Net Profit Margin	1.91%
Debt/Equity Ratio	58.7%

How did 601607 perform over the long term?

See historical performance and comparison

Dividends

2.5%

Current Dividend Yield

28%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 601607 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

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

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 601607?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 601607. This is calculated by dividing 601607's market cap by their current preferred multiple.
What is 601607's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥55.99b

601607 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	0.3x
Enterprise Value/EBITDA	8.3x
PEG Ratio	1x

Price to Earnings Ratio vs Peers

How does 601607's PE Ratio compare to its peers?

601607 PE Ratio vs Peers

The above table shows the PE ratio for 601607 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	21.1x
000963 Huadong Medicine	31.3x	21.5%	CN¥73.4b
600998 Jointown Pharmaceutical Group	9.8x	20.5%	CN¥20.9b
600511 China National Medicines	10.6x	9.7%	CN¥19.3b
301015 Qingdao Baheal Medical	32.6x	20.6%	CN¥13.9b
601607 Shanghai Pharmaceuticals Holding	14.9x	15.0%	CN¥56.0b

Price-To-Earnings vs Peers: 601607 is good value based on its Price-To-Earnings Ratio (14.9x) compared to the peer average (21.1x).

Price to Earnings Ratio vs Industry

How does 601607's PE Ratio compare vs other companies in the CN Healthcare Industry?

Price-To-Earnings vs Industry: 601607 is good value based on its Price-To-Earnings Ratio (14.9x) compared to the CN Healthcare industry average (32.4x)

Price to Earnings Ratio vs Fair Ratio

What is 601607'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.

601607 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	14.9x
Fair PE Ratio	25.2x

Price-To-Earnings vs Fair Ratio: 601607 is good value based on its Price-To-Earnings Ratio (14.9x) compared to the estimated Fair Price-To-Earnings Ratio (25.2x).

Share Price vs Fair Value

What is the Fair Price of 601607 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 601607 (CN¥16.99) is trading above our estimate of fair value (CN¥14.74)

Significantly Below Fair Value: 601607 is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Shanghai Pharmaceuticals Holding forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

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

15.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 601607's forecast earnings growth (15% per year) is above the savings rate (3.2%).

Earnings vs Market: 601607's earnings (15% per year) are forecast to grow slower than the CN market (24.6% per year).

High Growth Earnings: 601607's earnings are forecast to grow, but not significantly.

Revenue vs Market: 601607's revenue (10.3% per year) is forecast to grow slower than the CN market (17.8% per year).

High Growth Revenue: 601607'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: 601607's Return on Equity is forecast to be low in 3 years time (10.1%).

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Past Performance

How has Shanghai Pharmaceuticals Holding performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

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

9.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 601607 has high quality earnings.

Growing Profit Margin: 601607's current net profit margins (1.9%) are lower than last year (2.7%).

Past Earnings Growth Analysis

Earnings Trend: 601607's earnings have grown by 9% per year over the past 5 years.

Accelerating Growth: 601607's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 601607 had negative earnings growth (-24.3%) over the past year, making it difficult to compare to the Healthcare industry average (2.5%).

Return on Equity

High ROE: 601607's Return on Equity (7.3%) is considered low.

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Financial Health

How is Shanghai Pharmaceuticals Holding's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

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

Financial Position Analysis

Short Term Liabilities: 601607's short term assets (CN¥134.9B) exceed its short term liabilities (CN¥95.2B).

Long Term Liabilities: 601607's short term assets (CN¥134.9B) exceed its long term liabilities (CN¥12.4B).

Debt to Equity History and Analysis

Debt Level: 601607's net debt to equity ratio (9.4%) is considered satisfactory.

Reducing Debt: 601607's debt to equity ratio has increased from 40% to 58.7% over the past 5 years.

Debt Coverage: 601607's debt is not well covered by operating cash flow (8.4%).

Interest Coverage: 601607's interest payments on its debt are well covered by EBIT (10.6x coverage).

Balance Sheet

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Dividend

What is Shanghai Pharmaceuticals Holding current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.47%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 601607's dividend (2.47%) is higher than the bottom 25% of dividend payers in the CN market (0.45%).

High Dividend: 601607's dividend (2.47%) is in the top 25% of dividend payers in the CN market (1.88%)

Stability and Growth of Payments

Stable Dividend: 601607's dividends per share have been stable in the past 10 years.

Growing Dividend: 601607's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (28.3%), 601607's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 601607 is paying a dividend but the company has no free cash flows.

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Management

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

6.1yrs

Average management tenure

CEO

Man Cho (61 yo)

9.17yrs

Tenure

CN¥6,441,000

Compensation

Mr. Man Cho has been the President of Shanghai Pharmaceuticals Holding Co., Ltd. since June 5, 2013 and serves as its Executive Director. Mr. Cho was a Director of Oncternal Therapeutics, Inc. since Decemb...

CEO Compensation Analysis

Compensation vs Market: Man's total compensation ($USD950.98K) is above average for companies of similar size in the CN market ($USD245.62K).

Compensation vs Earnings: Man's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: 601607's management team is seasoned and experienced (6.1 years average tenure).

Board Members

Experienced Board: 601607's board of directors are considered experienced (9.2 years average tenure).

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 been diluted in the past year, with total shares outstanding growing by 30.1%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/16 00:00
End of Day Share Price	2022/08/16 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31