Shanghai Kindly Medical Instruments (SEHK:1501) - Share price, News & Analysis

Q: What is the Fair Price of 1501 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

1501 (HK$26.7) is trading below our estimate of [[fair value]] (HK$63.93)

1501 fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	6/6
Past Performance	1/6
Financial Health	6/6
Dividends	0/6

1501 Stock Overview

Shanghai Kindly Medical Instruments Co., Ltd.

Rewards

Trading at 58.2% below our estimate of its fair value

Earnings are forecast to grow 26.19% per year

Earnings have grown 21.8% per year over the past 5 years

Risk Analysis

High level of non-cash earnings

Shanghai Kindly Medical Instruments Competitors

China Isotope & Radiation

SEHK:1763

HK$6.1b

Kangji Medical Holdings

SEHK:9997

HK$8.0b

Shanghai Conant Optical

SEHK:2276

HK$2.4b

Shandong Weigao Group Medical Polymer

SEHK:1066

HK$44.8b

Price History & Performance

Summary of all time highs, changes and price drops for Shanghai Kindly Medical Instruments
Historical stock prices
Current Share Price	HK$26.70
52 Week High	HK$34.85
52 Week Low	HK$10.80
Beta	0.21
1 Month Change	20.27%
3 Month Change	69.20%
1 Year Change	-19.46%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-1.11%

Recent News & Updates

Jul 14

Be Wary Of Shanghai Kindly Medical Instruments (HKG:1501) And Its Returns On Capital

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Firstly, we'd want to identify a...

May 17

Shanghai Kindly Medical Instruments' (HKG:1501) Shareholders Will Receive A Smaller Dividend Than Last Year

Shanghai Kindly Medical Instruments Co., Ltd. ( HKG:1501 ) is reducing its dividend to HK$0.32 on the 20th of June. The...

Shareholder Returns

	1501	HK Medical Equipment	HK Market
7D	9.0%	3.4%	0.2%
1Y	-19.5%	-56.3%	-21.9%

Return vs Industry: 1501 exceeded the Hong Kong Medical Equipment industry which returned -53.4% over the past year.

Return vs Market: 1501 exceeded the Hong Kong Market which returned -20.5% over the past year.

Price Volatility

Is 1501's price volatile compared to industry and market?
1501 volatility
1501 Average Weekly Movement	7.3%
Medical Equipment Industry Average Movement	8.4%
Market Average Movement	6.6%
10% most volatile stocks in HK Market	12.8%
10% least volatile stocks in HK Market	3.2%

Stable Share Price: 1501 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: 1501's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2006	1,189	Dongke Liang	https://www.kdl-int.com

Shanghai Kindly Medical Instruments Co., Ltd. engages in the research and development, manufacture, and sale of cardiovascular interventional medical devices in Mainland China, Europe, the United States, and internationally. The company offers interventions products, which includes guiding catheter used to provide a channel for introducing balloon catheter, guidewire or other treatment devices; micro catheter to support the placement of guide wires; guidewire used in percutaneous transluminal angioplasty (PTA) surgical procedures; angiography catheter used to inject and infuse contrast media and fluid; and Y-connector pack used in PTCA surgery.

Shanghai Kindly Medical Instruments Fundamentals Summary

How do Shanghai Kindly Medical Instruments's earnings and revenue compare to its market cap?
1501 fundamental statistics
Market Cap	CN¥3.86b
Earnings (TTM)	CN¥142.96m
Revenue (TTM)	CN¥464.68m

27.0x

P/E Ratio

8.3x

P/S Ratio

Is 1501 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
1501 income statement (TTM)
Revenue	CN¥464.68m
Cost of Revenue	CN¥188.93m
Gross Profit	CN¥275.75m
Other Expenses	CN¥132.79m
Earnings	CN¥142.96m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.85
Gross Margin	59.34%
Net Profit Margin	30.76%
Debt/Equity Ratio	0%

How did 1501 perform over the long term?

See historical performance and comparison

Dividends

1.1%

Current Dividend Yield

30%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 1501 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

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 1501?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 1501. This is calculated by dividing 1501's market cap by their current preferred multiple.
What is 1501's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥3.86b

1501 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	7x
Enterprise Value/EBITDA	23.2x
PEG Ratio	1x

Price to Earnings Ratio vs Peers

How does 1501's PE Ratio compare to its peers?

1501 PE Ratio vs Peers

The above table shows the PE ratio for 1501 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	14.8x
1763 China Isotope & Radiation	15.6x	14.5%	HK$6.1b
9997 Kangji Medical Holdings	15.1x	18.1%	HK$8.0b
2276 Shanghai Conant Optical	11.2x	n/a	HK$2.4b
1066 Shandong Weigao Group Medical Polymer	17.2x	13.7%	HK$44.8b
1501 Shanghai Kindly Medical Instruments	27x	26.2%	HK$4.5b

Price-To-Earnings vs Peers: 1501 is expensive based on its Price-To-Earnings Ratio (27x) compared to the peer average (14.8x).

Price to Earnings Ratio vs Industry

How does 1501's PE Ratio compare vs other companies in the Asian Medical Equipment Industry?

Price-To-Earnings vs Industry: 1501 is expensive based on its Price-To-Earnings Ratio (27x) compared to the Hong Kong Medical Equipment industry average (16.8x)

Price to Earnings Ratio vs Fair Ratio

What is 1501'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.

1501 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	27x
Fair PE Ratio	17.6x

Price-To-Earnings vs Fair Ratio: 1501 is expensive based on its Price-To-Earnings Ratio (27x) compared to the estimated Fair Price-To-Earnings Ratio (17.6x).

Share Price vs Fair Value

What is the Fair Price of 1501 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 1501 (HK$26.7) is trading below our estimate of fair value (HK$63.93)

Significantly Below Fair Value: 1501 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: Target price is less than 20% higher than the current share price.

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Future Growth

How is Shanghai Kindly Medical Instruments forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

6/6

Future Growth Score 6/6

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

26.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1501's forecast earnings growth (26.2% per year) is above the savings rate (1.6%).

Earnings vs Market: 1501's earnings (26.2% per year) are forecast to grow faster than the Hong Kong market (16.8% per year).

High Growth Earnings: 1501's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 1501's revenue (27.7% per year) is forecast to grow faster than the Hong Kong market (10.1% per year).

High Growth Revenue: 1501's revenue (27.7% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 1501's Return on Equity is forecast to be high in 3 years time (24.6%)

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Past Performance

How has Shanghai Kindly Medical Instruments 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

21.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 1501 has a high level of non-cash earnings.

Growing Profit Margin: 1501's current net profit margins (30.8%) are lower than last year (33.9%).

Past Earnings Growth Analysis

Earnings Trend: 1501's earnings have grown significantly by 21.8% per year over the past 5 years.

Accelerating Growth: 1501's earnings growth over the past year (17.8%) is below its 5-year average (21.8% per year).

Earnings vs Industry: 1501 earnings growth over the past year (17.8%) underperformed the Medical Equipment industry 35.4%.

Return on Equity

High ROE: 1501's Return on Equity (9.8%) is considered low.

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Financial Health

How is Shanghai Kindly Medical Instruments'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: 1501's short term assets (CN¥858.4M) exceed its short term liabilities (CN¥153.2M).

Long Term Liabilities: 1501's short term assets (CN¥858.4M) exceed its long term liabilities (CN¥30.4M).

Debt to Equity History and Analysis

Debt Level: 1501 is debt free.

Reducing Debt: 1501 has not had any debt for past 5 years.

Debt Coverage: 1501 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 1501 has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Shanghai Kindly Medical Instruments's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

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

1.13%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 1501's dividend (1.13%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.87%).

High Dividend: 1501's dividend (1.13%) is low compared to the top 25% of dividend payers in the Hong Kong market (8.36%).

Stability and Growth of Payments

Stable Dividend: 1501 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are stable.

Growing Dividend: 1501 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: 1501 is not paying a notable dividend for the Hong Kong market.

Cash Payout to Shareholders

Cash Flow Coverage: 1501 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?

3.3yrs

Average management tenure

CEO

Dongke Liang (44 yo)

12.17yrs

Tenure

Dr. Dongke Liang has been Executive Chairman of the Board at Shanghai Kindly Medical Instruments Co., Ltd. since April 26, 2016 and also has been its General Manager since June 30, 2010 and Executive Direc...

Leadership Team

Experienced Management: 1501's management team is considered experienced (3.3 years average tenure).

Board Members

Experienced Board: 1501's board of directors are not considered experienced ( 2 years average tenure), which suggests a new board.

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.

Recent Insider Transactions

Ownership Breakdown

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

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