SEHK:2607

Stock Analysis Report

Shanghai Pharmaceuticals Holding

Executive Summary

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.


Snowflake Analysis

Good value average dividend payer.


Similar Companies

Share Price & News

How has Shanghai Pharmaceuticals Holding's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2607 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.2%

2607

-4.6%

HK Healthcare

-3.3%

HK Market


1 Year Return

-17.7%

2607

-27.4%

HK Healthcare

-9.6%

HK Market

Return vs Industry: 2607 exceeded the Hong Kong Healthcare industry which returned -26.9% over the past year.

Return vs Market: 2607 underperformed the Hong Kong Market which returned -9.8% over the past year.


Shareholder returns

2607IndustryMarket
7 Day-5.2%-4.6%-3.3%
30 Day-2.0%-7.0%-3.8%
90 Day6.1%-5.8%-0.2%
1 Year-15.2%-17.7%-25.7%-27.4%-6.3%-9.6%
3 Year-22.9%-28.2%-33.3%-37.2%11.2%-0.05%
5 Year-4.5%-14.4%-27.2%-33.2%12.7%-6.0%

Price Volatility Vs. Market

How volatile is Shanghai Pharmaceuticals Holding's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Shanghai Pharmaceuticals Holding undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 2607 (HK$14.68) is trading below our estimate of fair value (HK$63.66)

Significantly Below Fair Value: 2607 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2607 is good value based on its PE Ratio (14.4x) compared to the Healthcare industry average (16x).

PE vs Market: 2607 is poor value based on its PE Ratio (14.4x) compared to the Hong Kong market (9.9x).


Price to Earnings Growth Ratio

PEG Ratio: 2607 is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: 2607 is good value based on its PB Ratio (1.4x) compared to the HK Healthcare industry average (1.5x).


Next Steps

Future Growth

How is Shanghai Pharmaceuticals Holding forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

9.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2607's forecast earnings growth (9.6% per year) is above the savings rate (1.6%).

Earnings vs Market: 2607's earnings (9.6% per year) are forecast to grow slower than the Hong Kong market (11.7% per year).

High Growth Earnings: 2607's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2607's revenue (13% per year) is forecast to grow faster than the Hong Kong market (9.7% per year).

High Growth Revenue: 2607's revenue (13% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2607's Return on Equity is forecast to be low in 3 years time (11.9%).


Next Steps

Past Performance

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

9.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2607 has high quality earnings.

Growing Profit Margin: 2607's current net profit margins (2.1%) are lower than last year (2.8%).


Past Earnings Growth Analysis

Earnings Trend: 2607's earnings have grown by 9.6% per year over the past 5 years.

Accelerating Growth: 2607's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 2607 had negative earnings growth (-7%) over the past year, making it difficult to compare to the Healthcare industry average (10.4%).


Return on Equity

High ROE: 2607's Return on Equity (9.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Shanghai Pharmaceuticals Holding's financial position?


Financial Position Analysis

Short Term Liabilities: 2607's short term assets (CN¥99.1B) exceed its short term liabilities (CN¥74.6B).

Long Term Liabilities: 2607's short term assets (CN¥99.1B) exceed its long term liabilities (CN¥12.3B).


Debt to Equity History and Analysis

Debt Level: 2607's debt to equity ratio (61.2%) is considered high.

Reducing Debt: 2607's debt to equity ratio has increased from 24.8% to 61.2% over the past 5 years.

Debt Coverage: 2607's debt is not well covered by operating cash flow (14.5%).

Interest Coverage: 2607's interest payments on its debt are well covered by EBIT (18.9x coverage).


Balance Sheet

Inventory Level: 2607 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2607's debt is covered by short term assets (assets are 3.3x debt).


Next Steps

Dividend

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

2.07%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%2.3%markettop25%6.4%industryaverage2.7%forecastin3Years2.9%

Current dividend yield vs market & industry

Notable Dividend: 2607's dividend (2.07%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.32%).

High Dividend: 2607's dividend (2.07%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.41%).


Stability and Growth of Payments

Stable Dividend: 2607's dividends per share have been stable in the past 10 years.

Growing Dividend: 2607's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (29.8%), 2607's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2607's dividends in 3 years are forecast to be well covered by earnings (31.1% payout ratio).


Next Steps

Management

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

4.0yrs

Average management tenure


CEO

Man Cho (58yo)

6.7yrs

Tenure

CN¥3,973,000

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 is a Director of Oncternal Therapeutics, Inc. since Decembe ...


CEO Compensation Analysis

Compensation vs Market: Man's total compensation ($USD566.37K) is about average for companies of similar size in the Hong Kong market ($USD577.68K).

Compensation vs Earnings: Man's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Man Cho
President & Executive Director6.7yrsCN¥3.97m0.00070% CN¥391.3k
Bo Shen
CFO, VP6.7yrsCN¥3.49m0.0025% CN¥1.4m
Yongzhong Li
VP & Executive Director6.7yrsCN¥3.94mno data
Suet Wing Leung
Joint Company Secretary1.3yrsno datano data
Jinzhu Chen
Secretary of Board & Joint Company Secretary0.5yrsno datano data
Jinqi Yu
General Manager0yrsCN¥754.00kno data

4.0yrs

Average Tenure

47.5yo

Average Age

Experienced Management: 2607's management team is considered experienced (4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Man Cho
President & Executive Director6.7yrsCN¥3.97m0.00070% CN¥391.3k
Bo Shen
CFO, VP6.7yrsCN¥3.49m0.0025% CN¥1.4m
Yongzhong Li
VP & Executive Director6.7yrsCN¥3.94mno data
Jun Zhou
Chairman of the Board6.7yrsno datano data
Jiangnan Cai
Independent Non-Executive Director6.7yrsCN¥200.00kno data
Youli Xu
Chief Supervisor3.7yrsno datano data
Liang Hong
Independent Non-Executive Director6.7yrsCN¥230.00kno data
An Li
Non-Executive Director6.7yrsno datano data
Dawei Ge
Non-Executive Vice Chairman0.7yrsno datano data
Zhaoyang Gu
Independent Non-Executive Director0yrsno datano data

6.7yrs

Average Tenure

51.5yo

Average Age

Experienced Board: 2607's board of directors are considered experienced (6.7 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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

Shanghai Pharmaceuticals Holding Co., Ltd's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Shanghai Pharmaceuticals Holding Co., Ltd
  • Ticker: 2607
  • Exchange: SEHK
  • Founded: 1994
  • Industry: Health Care Distributors
  • Sector: Healthcare
  • Market Cap: CN¥50.328b
  • Listing Market Cap: CN¥55.898b
  • Shares outstanding: 2.84b
  • Website: https://www.sphchina.com

Number of Employees


Location

  • Shanghai Pharmaceuticals Holding Co., Ltd
  • Shanghai Pharmaceutical Building
  • No.200 Taicang Road
  • Shanghai
  • 200020
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
601607SHSE (Shanghai Stock Exchange)YesDomestic SharesCNCNYJul 1996
601607XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)YesDomestic SharesCNCNYJul 1996
2607SEHK (The Stock Exchange of Hong Kong Ltd.)Foreign Shares-Foreign ListedHKHKDMay 2011
SHPM.FOTCPK (Pink Sheets LLC)Foreign Shares-Foreign ListedUSUSDMay 2011
S1RDB (Deutsche Boerse AG)Foreign Shares-Foreign ListedDEEURMay 2011
2607SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)Foreign Shares-Foreign ListedHKHKDMay 2011
2607SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)Foreign Shares-Foreign ListedHKHKDMay 2011
SHPM.YOTCPK (Pink Sheets LLC)ADR REPS SHS HUSUSDMar 2013

Biography

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 Production, Distribution, Retail, and Others segments. The company offers chemicals and biochemicals, Chinese medicines, healthcare products, and medical devices in various therapeutic areas, including digestion and immune system, cardiovascular, anti-infection, nervous system and mental disorder, and oncology. It provides approximately 700 varieties of drugs and 20 dosage forms. The company also engages in the provision of pharmaceutical distribution, warehousing, logistics, and other value-added pharmaceutical supply chain solutions and related services to pharmaceutical manufacturers and dispensers, such as hospitals, distributors, and retail pharmacies. In addition, it operates a network of retail pharmacy stores, as well as engages in consulting service, assets management, investment holding operations, etc. Further, the company manufactures and trades in medicines, and medical equipment and instruments. It operates approximately 2,000 chained pharmacies in 16 provinces. The company was incorporated in 1994 and is headquartered in Shanghai, the People's Republic of China. Shanghai Pharmaceuticals Holding Co., Ltd. is a subsidiary of Shanghai Pharmaceutical (Group) Co., Ltd. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 13:07
End of Day Share Price2020/02/26 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.