Shanghai Fosun Pharmaceutical (Group) (SHSE:600196) - Share price, News & Analysis

Q: What is the Fair Price of 600196 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

600196 (CN¥30.48) is trading below our estimate of [[fair value]] (CN¥37.75)

600196 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	1/6
Financial Health	4/6
Dividends	4/6

600196 Stock Overview

Shanghai Fosun Pharmaceutical (Group) Co., Ltd.

Rewards

Trading at 19.3% below our estimate of its fair value

Earnings are forecast to grow 22.14% per year

Trading at good value vs. peer average Price-To-Earnings ratio

Trading at good value vs. industry average Price-To-Earnings ratio

Trading below our calculated fair Price-To-Earnings ratio

Risk Analysis

Dividend of 1.84% is not well covered

Large one-off items impacting financial results

Profit margins (8.8%) are lower than last year (13.3%)

Shareholders have been diluted in the past year

Shanghai Fosun Pharmaceutical (Group) Competitors

Changchun High-Tech Industries (Group)

SZSE:000661

CN¥62.9b

Yunnan Baiyao GroupLtd

SZSE:000538

CN¥92.8b

Zhejiang NHU

SZSE:002001

CN¥64.2b

Beijing Tongrentang

SHSE:600085

CN¥59.5b

Price History & Performance

Summary of all time highs, changes and price drops for Shanghai Fosun Pharmaceutical (Group)
Historical stock prices
Current Share Price	CN¥30.48
52 Week High	CN¥59.37
52 Week Low	CN¥30.21
Beta	0.66
1 Month Change	-25.53%
3 Month Change	-29.64%
1 Year Change	-46.83%
3 Year Change	20.90%
5 Year Change	-10.85%
Change since IPO	1,101.56%

Shareholder Returns

	600196	CN Pharmaceuticals	CN Market
7D	-5.3%	-4.6%	-1.9%
1Y	-46.8%	-24.5%	-18.6%

Return vs Industry: 600196 underperformed the CN Pharmaceuticals industry which returned -24.5% over the past year.

Return vs Market: 600196 underperformed the CN Market which returned -18.6% over the past year.

Price Volatility

Is 600196's price volatile compared to industry and market?
600196 volatility
600196 Average Weekly Movement	6.3%
Pharmaceuticals Industry Average Movement	4.7%
Market Average Movement	5.8%
10% most volatile stocks in CN Market	9.3%
10% least volatile stocks in CN Market	3.7%

Stable Share Price: 600196 is not significantly more volatile than the rest of CN stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: 600196's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1994	36,604	Yuqing Chen	https://www.fosunpharma.com

Shanghai Fosun Pharmaceutical (Group) Co., Ltd. develops, manufactures, and sells pharmaceutical products in Mainland China and internationally. It operates in five segments: Pharmaceutical Manufacturing, Medical Devices and Medical Diagnosis, Healthcare Service, Pharmaceutical Distribution and Retail, Other Business segments.

Shanghai Fosun Pharmaceutical (Group) Fundamentals Summary

How do Shanghai Fosun Pharmaceutical (Group)'s earnings and revenue compare to its market cap?
600196 fundamental statistics
Market Cap	CN¥73.97b
Earnings (TTM)	CN¥3.80b
Revenue (TTM)	CN¥43.39b

21.4x

P/E Ratio

1.9x

P/S Ratio

Is 600196 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
600196 income statement (TTM)
Revenue	CN¥43.39b
Cost of Revenue	CN¥23.62b
Gross Profit	CN¥19.77b
Other Expenses	CN¥15.97b
Earnings	CN¥3.80b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.42
Gross Margin	45.56%
Net Profit Margin	8.76%
Debt/Equity Ratio	62.3%

How did 600196 perform over the long term?

See historical performance and comparison

Dividends

1.8%

Current Dividend Yield

38%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 600196 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

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 600196?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 600196. This is calculated by dividing 600196's market cap by their current preferred multiple.
What is 600196's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥73.97b

600196 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	2.3x
Enterprise Value/EBITDA	20.6x
PEG Ratio	1x

Price to Earnings Ratio vs Peers

How does 600196's PE Ratio compare to its peers?

600196 PE Ratio vs Peers

The above table shows the PE ratio for 600196 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	28.2x
000661 Changchun High-Tech Industries (Group)	15.9x	24.1%	CN¥62.9b
000538 Yunnan Baiyao GroupLtd	37.1x	24.6%	CN¥92.8b
002001 Zhejiang NHU	15.6x	15.9%	CN¥64.2b
600085 Beijing Tongrentang	44.2x	19.8%	CN¥59.5b
600196 Shanghai Fosun Pharmaceutical (Group)	21.4x	22.1%	CN¥74.0b

Price-To-Earnings vs Peers: 600196 is good value based on its Price-To-Earnings Ratio (21.4x) compared to the peer average (28.2x).

Price to Earnings Ratio vs Industry

How does 600196's PE Ratio compare vs other companies in the CN Pharmaceuticals Industry?

Price-To-Earnings vs Industry: 600196 is good value based on its Price-To-Earnings Ratio (21.4x) compared to the CN Pharmaceuticals industry average (29.4x)

Price to Earnings Ratio vs Fair Ratio

What is 600196'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.

600196 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	21.4x
Fair PE Ratio	36.5x

Price-To-Earnings vs Fair Ratio: 600196 is good value based on its Price-To-Earnings Ratio (21.4x) compared to the estimated Fair Price-To-Earnings Ratio (36.5x).

Share Price vs Fair Value

What is the Fair Price of 600196 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 600196 (CN¥30.48) is trading below our estimate of fair value (CN¥37.75)

Significantly Below Fair Value: 600196 is trading below fair value, but not by a significant amount.

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 Fosun Pharmaceutical (Group) forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

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

22.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 600196's forecast earnings growth (22.1% per year) is above the savings rate (3.2%).

Earnings vs Market: 600196's earnings (22.1% per year) are forecast to grow slower than the CN market (25.8% per year).

High Growth Earnings: 600196's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 600196's revenue (10.9% per year) is forecast to grow slower than the CN market (18.2% per year).

High Growth Revenue: 600196's revenue (10.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 600196's Return on Equity is forecast to be low in 3 years time (13%).

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Past Performance

How has Shanghai Fosun Pharmaceutical (Group) performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

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

10.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 600196 has a large one-off loss of CN¥3.2B impacting its June 30 2022 financial results.

Growing Profit Margin: 600196's current net profit margins (8.8%) are lower than last year (13.3%).

Past Earnings Growth Analysis

Earnings Trend: 600196's earnings have grown by 10.2% per year over the past 5 years.

Accelerating Growth: 600196's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 600196 had negative earnings growth (-14.2%) over the past year, making it difficult to compare to the Pharmaceuticals industry average (6%).

Return on Equity

High ROE: 600196's Return on Equity (8.6%) is considered low.

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Financial Health

How is Shanghai Fosun Pharmaceutical (Group)'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: 600196's short term assets (CN¥32.1B) exceed its short term liabilities (CN¥32.0B).

Long Term Liabilities: 600196's short term assets (CN¥32.1B) exceed its long term liabilities (CN¥19.1B).

Debt to Equity History and Analysis

Debt Level: 600196's net debt to equity ratio (31.6%) is considered satisfactory.

Reducing Debt: 600196's debt to equity ratio has increased from 56.6% to 62.3% over the past 5 years.

Debt Coverage: 600196's debt is not well covered by operating cash flow (13.7%).

Interest Coverage: 600196 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Shanghai Fosun Pharmaceutical (Group) 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
Cash Flow Coverage

1.84%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 600196's dividend (1.84%) is higher than the bottom 25% of dividend payers in the CN market (0.52%).

High Dividend: 600196's dividend (1.84%) is low compared to the top 25% of dividend payers in the CN market (2.1%).

Stability and Growth of Payments

Stable Dividend: 600196's dividends per share have been stable in the past 10 years.

Growing Dividend: 600196's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (37.8%), 600196's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 600196 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?

1.1yrs

Average management tenure

CEO

Yuqing Chen (47 yo)

1.92yrs

Tenure

Mr. Yuqing Chen serves as its Co-President at Shanghai Fosun Pharmaceutical (Group) Co., Ltd since October 29, 2020 and serves as Co-Chief Executive Officer from June 1, 2022. He served as Senior Vice Pres...

Leadership Team

Experienced Management: 600196's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.

Board Members

Experienced Board: 600196's board of directors are considered experienced (3.3 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: 600196 insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

SHSE:600196 Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Shares	Max Price
08 Sep 22	BuyCN¥441,250	Xiaohui Guan	Individual	12,500	CN¥35.30
08 Sep 22	BuyCN¥170,300	Deyong Wen	Individual	5,000	CN¥34.06
07 Sep 22	BuyCN¥887,400	Yifang Wu	Individual	25,000	CN¥35.50
07 Sep 22	BuyCN¥1,063,500	Kexin Wang	Individual	30,000	CN¥35.45
07 Sep 22	BuyCN¥533,550	Deyong Wen	Individual	15,000	CN¥35.57

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.2%.

Top Shareholders

Top 25 shareholders own 46.23% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
38.04%	Fosun International Holdings Ltd.	1,015,628,790	CN¥31.0b	0%	no data
1.46%	BlackRock, Inc.	38,973,647	CN¥1.2b	12.98%	no data
1.45%	China Securities Finance Corp, Asset Management Arm	38,736,079	CN¥1.2b	0%	0.22%
0.9%	Central Huijin Asset Management Ltd.	24,067,700	CN¥733.6m	0%	0.24%
0.79%	UBS Asset Management	20,991,060	CN¥639.8m	62.76%	0.02%
0.45%	Schroder Investment Management (Hong Kong) Limited	12,082,500	CN¥368.3m	0%	0.16%
0.33%	Bank Negara Malaysia	8,766,765	CN¥267.2m	0%	no data
0.32%	National Council for Social Security Fund	8,613,512	CN¥262.5m	0%	0.05%
0.3%	Franklin Resources, Inc.	8,035,900	CN¥244.9m	0.1%	0.01%
0.27%	China Asset Management Co., Ltd.	7,157,555	CN¥218.2m	-18.27%	0.06%
0.22%	E Fund Management Co., Ltd.	5,985,352	CN¥182.4m	-61.52%	0.04%
0.22%	China Universal Asset Management Company Ltd.	5,920,966	CN¥180.5m	0%	0.09%
0.2%	CITIC Securities Company Limited, Asset Management Arm	5,408,632	CN¥164.9m	0%	0.46%
0.16%	Fullgoal Fund Management Co., Ltd.	4,153,694	CN¥126.6m	0%	0.04%
0.14%	Yinhua Fund Management Co. Ltd.	3,686,664	CN¥112.4m	0%	0.1%
0.13%	Tianhong Asset Management Co., Ltd.	3,365,144	CN¥102.6m	0%	0.18%
0.12%	GF Fund Management Co., Ltd.	3,333,762	CN¥101.6m	0%	0.04%
0.12%	Dimensional Fund Advisors LP	3,094,619	CN¥94.3m	-8.4%	no data
0.095%	Nomura Asset Management Co., Ltd.	2,547,500	CN¥77.6m	0%	no data
0.091%	Geode Capital Management, LLC	2,431,446	CN¥74.1m	6.85%	no data
0.091%	Hua An Fund Management Co., Ltd.	2,424,581	CN¥73.9m	0%	0.06%
0.086%	JPMorgan Chase & Co, Brokerage and Securities Investments	2,304,556	CN¥70.2m	-34.44%	0.01%
0.086%	Hwabao WP Fund Management Co., Ltd	2,283,441	CN¥69.6m	0%	0.1%
0.085%	Pacific Investment Management Company LLC	2,275,400	CN¥69.4m	0.64%	0.03%
0.074%	Caisse de dépôt et placement du Québec	1,965,427	CN¥59.9m	0%	0.01%

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
600196	SHSE (Shanghai Stock Exchange)	Yes	Domestic Shares	CN	CNY	Aug 1998
600196	XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)	Yes	Domestic Shares	CN	CNY	Aug 1998
2196	SEHK (The Stock Exchange of Hong Kong Ltd.)		Foreign Shares-Foreign Listed	HK	HKD	Oct 2012
SFOS.F	OTCPK (Pink Sheets LLC)		Foreign Shares-Foreign Listed	US	USD	Oct 2012
08HH	BST (Boerse-Stuttgart)		Foreign Shares-Foreign Listed	DE	EUR	Oct 2012
2196	SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)		Foreign Shares-Foreign Listed	HK	HKD	Oct 2012
2196	SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)		Foreign Shares-Foreign Listed	HK	HKD	Oct 2012
08HH	DB (Deutsche Boerse AG)		Foreign Shares-Foreign Listed	DE	EUR	Oct 2012

Data	Last Updated (UTC time)
Company Analysis	2022/09/25 00:00
End of Day Share Price	2022/09/23 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31