Henan Lingrui Pharmaceutical (SHSE:600285) - Share price, News & Analysis

Q: What is the Fair Price of 600285 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

600285 (CN¥11.89) is trading below our estimate of [[fair value]] (CN¥38.17)

600285 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	4/6
Financial Health	6/6
Dividends	5/6

600285 Stock Overview

Henan Lingrui Pharmaceutical Co., Ltd. produces and sells medicines in China.

Rewards

Trading at 68.9% below our estimate of its fair value

Earnings are forecast to grow 17.72% per year

Earnings grew by 14.5% over the past year

Risk Analysis

Unstable dividend track record

Henan Lingrui Pharmaceutical Competitors

Shanghai Haixin Group

SHSE:600851

CN¥6.5b

Guangdong Taienkang Pharmaceutical

SZSE:301263

CN¥6.3b

Shanxi Zhendong PharmaceuticalLtd

SZSE:300158

CN¥6.1b

Changzhou Qianhong BiopharmaLTD

SZSE:002550

CN¥7.1b

Price History & Performance

Summary of all time highs, changes and price drops for Henan Lingrui Pharmaceutical
Historical stock prices
Current Share Price	CN¥11.89
52 Week High	CN¥17.97
52 Week Low	CN¥9.57
Beta	0.39
1 Month Change	-5.18%
3 Month Change	-5.33%
1 Year Change	8.19%
3 Year Change	46.25%
5 Year Change	7.51%
Change since IPO	278.85%

Shareholder Returns

	600285	CN Pharmaceuticals	CN Market
7D	5.2%	4.2%	3.3%
1Y	8.2%	-16.7%	-11.4%

Return vs Industry: 600285 exceeded the CN Pharmaceuticals industry which returned -16.7% over the past year.

Return vs Market: 600285 exceeded the CN Market which returned -11.4% over the past year.

Price Volatility

Is 600285's price volatile compared to industry and market?
600285 volatility
600285 Average Weekly Movement	4.4%
Pharmaceuticals Industry Average Movement	5.5%
Market Average Movement	6.0%
10% most volatile stocks in CN Market	9.2%
10% least volatile stocks in CN Market	3.9%

Stable Share Price: 600285 is less volatile than 75% of CN stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: 600285's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1992	2,500	Jianjun Cheng	https://www.lingrui.com

Henan Lingrui Pharmaceutical Co., Ltd. produces and sells medicines in China. The company offers its products in ten dosage forms, such as adhesive plasters, tablets, capsules, granules, tinctures, etc. covering approximately 100 product varieties. Its products include Tongluoqutong plasters, Peiyuantongnao capsules, Danlutongdu tablets, stomachache free tablets, Shenqi Hypoglycemic capsules, and others.

Henan Lingrui Pharmaceutical Fundamentals Summary

How do Henan Lingrui Pharmaceutical's earnings and revenue compare to its market cap?
600285 fundamental statistics
Market Cap	CN¥6.64b
Earnings (TTM)	CN¥395.74m
Revenue (TTM)	CN¥2.79b

17.0x

P/E Ratio

2.4x

P/S Ratio

Is 600285 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
600285 income statement (TTM)
Revenue	CN¥0
Cost of Revenue	CN¥0
Gross Profit	CN¥0
Other Expenses	CN¥0
Earnings	CN¥0

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.70
Gross Margin	73.20%
Net Profit Margin	14.20%
Debt/Equity Ratio	6.4%

How did 600285 perform over the long term?

See historical performance and comparison

Dividends

4.2%

Current Dividend Yield

70%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 600285 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

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 600285?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 600285. This is calculated by dividing 600285's market cap by their current preferred multiple.
What is 600285's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥6.64b

600285 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	2.1x
Enterprise Value/EBITDA	13x
PEG Ratio	1x

Price to Earnings Ratio vs Peers

How does 600285's PE Ratio compare to its peers?

600285 PE Ratio vs Peers

The above table shows the PE ratio for 600285 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	33.2x
600851 Shanghai Haixin Group	64.7x	n/a	CN¥6.5b
301263 Guangdong Taienkang Pharmaceutical	41x	n/a	CN¥6.3b
300158 Shanxi Zhendong PharmaceuticalLtd	2.4x	n/a	CN¥6.1b
002550 Changzhou Qianhong BiopharmaLTD	23.6x	n/a	CN¥7.1b
600285 Henan Lingrui Pharmaceutical	17x	17.7%	CN¥6.6b

Price-To-Earnings vs Peers: 600285 is good value based on its Price-To-Earnings Ratio (17x) compared to the peer average (33.2x).

Price to Earnings Ratio vs Industry

How does 600285's PE Ratio compare vs other companies in the CN Pharmaceuticals Industry?

Price-To-Earnings vs Industry: 600285 is good value based on its Price-To-Earnings Ratio (17x) compared to the CN Pharmaceuticals industry average (31x)

Price to Earnings Ratio vs Fair Ratio

What is 600285'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.

600285 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	17x
Fair PE Ratio	27x

Price-To-Earnings vs Fair Ratio: 600285 is good value based on its Price-To-Earnings Ratio (17x) compared to the estimated Fair Price-To-Earnings Ratio (27x).

Share Price vs Fair Value

What is the Fair Price of 600285 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 600285 (CN¥11.89) is trading below our estimate of fair value (CN¥38.17)

Significantly Below Fair Value: 600285 is trading below fair value by more than 20%.

Analyst Price Targets

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

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is Henan Lingrui Pharmaceutical forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

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

17.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 600285's forecast earnings growth (17.7% per year) is above the savings rate (3.2%).

Earnings vs Market: 600285's earnings (17.7% per year) are forecast to grow slower than the CN market (24.6% per year).

High Growth Earnings: 600285's earnings are forecast to grow, but not significantly.

Revenue vs Market: 600285's revenue (14.3% per year) is forecast to grow slower than the CN market (17.8% per year).

High Growth Revenue: 600285's revenue (14.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 600285's Return on Equity is forecast to be low in 3 years time (16.4%).

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Past Performance

How has Henan Lingrui Pharmaceutical performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

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

10.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 600285 has high quality earnings.

Growing Profit Margin: 600285's current net profit margins (14.2%) are lower than last year (14.2%).

Past Earnings Growth Analysis

Earnings Trend: 600285's earnings have grown by 10.1% per year over the past 5 years.

Accelerating Growth: 600285's earnings growth over the past year (14.5%) exceeds its 5-year average (10.1% per year).

Earnings vs Industry: 600285 earnings growth over the past year (14.5%) exceeded the Pharmaceuticals industry 6.3%.

Return on Equity

High ROE: 600285's Return on Equity (16.3%) is considered low.

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Financial Health

How is Henan Lingrui Pharmaceutical'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: 600285's short term assets (CN¥2.2B) exceed its short term liabilities (CN¥1.5B).

Long Term Liabilities: 600285's short term assets (CN¥2.2B) exceed its long term liabilities (CN¥70.8M).

Debt to Equity History and Analysis

Debt Level: 600285 has more cash than its total debt.

Reducing Debt: 600285's debt to equity ratio has reduced from 14.1% to 6.4% over the past 5 years.

Debt Coverage: 600285's debt is well covered by operating cash flow (451.9%).

Interest Coverage: 600285 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Henan Lingrui Pharmaceutical 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

4.21%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 600285's dividend (4.21%) is higher than the bottom 25% of dividend payers in the CN market (0.46%).

High Dividend: 600285's dividend (4.21%) is in the top 25% of dividend payers in the CN market (1.91%)

Stability and Growth of Payments

Stable Dividend: 600285's dividend payments have been volatile in the past 10 years.

Growing Dividend: 600285's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (69.8%), 600285's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (44.3%), 600285'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¥1m

CEO Compensation

CEO

Jianjun Cheng

11.17yrs

Tenure

CN¥1,418,600

Compensation

Jianjun Cheng has been General Manager of Henan Lingrui Pharmaceutical Co. Ltd. since June 2011.

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	2022/08/10 00:00
End of Day Share Price	2022/08/10 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31