Kangji Medical Holdings (SEHK:9997) - Share price, News & Analysis

Q: What is the Fair Price of 9997 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

9997 (HK$6.54) is trading below our estimate of [[fair value]] (HK$31.6)

9997 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	5/6
Past Performance	4/6
Financial Health	6/6
Dividends	2/6

9997 Stock Overview

Kangji Medical Holdings Limited, through its subsidiaries, designs, develops, manufactures, and sale of minimally invasive surgical instruments and accessories in China.

Rewards

Trading at 79.3% below our estimate of its fair value

Earnings are forecast to grow 18.05% per year

Earnings grew by 82.5% over the past year

Risk Analysis

High level of non-cash earnings

Kangji Medical Holdings Competitors

China Isotope & Radiation

SEHK:1763

HK$6.2b

Shanghai Kindly Medical Instruments

SEHK:1501

HK$4.5b

Shanghai Conant Optical

SEHK:2276

HK$2.4b

Shandong Weigao Group Medical Polymer

SEHK:1066

HK$46.3b

Price History & Performance

Summary of all time highs, changes and price drops for Kangji Medical Holdings
Historical stock prices
Current Share Price	HK$6.54
52 Week High	HK$11.84
52 Week Low	HK$5.98
Beta	-0.94
1 Month Change	-9.92%
3 Month Change	-5.90%
1 Year Change	-40.00%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-76.30%

Recent News & Updates

Jun 12

Kangji Medical Holdings (HKG:9997) Is Reinvesting At Lower Rates Of Return

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 16

Kangji Medical Holdings' (HKG:9997) Shareholders Will Receive A Bigger Dividend Than Last Year

Kangji Medical Holdings Limited's ( HKG:9997 ) dividend will be increasing to HK$0.17 on 28th of June. Based on the...

Shareholder Returns

	9997	HK Medical Equipment	HK Market
7D	-0.6%	2.8%	-0.7%
1Y	-40.0%	-53.4%	-20.5%

Return vs Industry: 9997 exceeded the Hong Kong Medical Equipment industry which returned -53.4% over the past year.

Return vs Market: 9997 underperformed the Hong Kong Market which returned -20.5% over the past year.

Price Volatility

Is 9997's price volatile compared to industry and market?
9997 volatility
9997 Average Weekly Movement	5.5%
Medical Equipment Industry Average Movement	8.3%
Market Average Movement	6.6%
10% most volatile stocks in HK Market	12.9%
10% least volatile stocks in HK Market	3.1%

Stable Share Price: 9997 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: 9997's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2004	722	Ming Zhong	https://www.kangjimedical.com

Kangji Medical Holdings Limited, through its subsidiaries, designs, develops, manufactures, and sale of minimally invasive surgical instruments and accessories in China. It offers disposable trocars, polymer ligation clips, disposable electrocoagulation forceps, ultrasonic scalpels, and other types of disposable hand-held instruments; and reusable trocars, reusable forceps, and other reusable products. The company’s products are used in obstetrics and gynecology, general surgery, urology, and thoracic surgery specialties.

Kangji Medical Holdings Fundamentals Summary

How do Kangji Medical Holdings's earnings and revenue compare to its market cap?
9997 fundamental statistics
Market Cap	CN¥7.01b
Earnings (TTM)	CN¥456.79m
Revenue (TTM)	CN¥690.26m

15.4x

P/E Ratio

10.2x

P/S Ratio

Is 9997 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
9997 income statement (TTM)
Revenue	CN¥690.26m
Cost of Revenue	CN¥127.34m
Gross Profit	CN¥562.93m
Other Expenses	CN¥106.14m
Earnings	CN¥456.79m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Aug 25, 2022

Earnings per share (EPS)	0.37
Gross Margin	81.55%
Net Profit Margin	66.18%
Debt/Equity Ratio	0%

How did 9997 perform over the long term?

See historical performance and comparison

Dividends

2.5%

Current Dividend Yield

38%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 9997 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 9997?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 9997. This is calculated by dividing 9997's market cap by their current preferred multiple.
What is 9997's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥7.01b

9997 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	5.6x
Enterprise Value/EBITDA	9x
PEG Ratio	0.9x

Price to Earnings Ratio vs Peers

How does 9997's PE Ratio compare to its peers?

9997 PE Ratio vs Peers

The above table shows the PE ratio for 9997 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	17.9x
1763 China Isotope & Radiation	15.8x	14.5%	HK$6.2b
1501 Shanghai Kindly Medical Instruments	26.8x	26.2%	HK$4.5b
2276 Shanghai Conant Optical	11.2x	n/a	HK$2.4b
1066 Shandong Weigao Group Medical Polymer	17.7x	13.7%	HK$46.3b
9997 Kangji Medical Holdings	15.4x	18.1%	HK$8.1b

Price-To-Earnings vs Peers: 9997 is good value based on its Price-To-Earnings Ratio (15.4x) compared to the peer average (17.9x).

Price to Earnings Ratio vs Industry

How does 9997's PE Ratio compare vs other companies in the Asian Medical Equipment Industry?

Price-To-Earnings vs Industry: 9997 is good value based on its Price-To-Earnings Ratio (15.4x) compared to the Hong Kong Medical Equipment industry average (16.8x)

Price to Earnings Ratio vs Fair Ratio

What is 9997'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.

9997 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	15.4x
Fair PE Ratio	14.7x

Price-To-Earnings vs Fair Ratio: 9997 is expensive based on its Price-To-Earnings Ratio (15.4x) compared to the estimated Fair Price-To-Earnings Ratio (14.7x).

Share Price vs Fair Value

What is the Fair Price of 9997 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 9997 (HK$6.54) is trading below our estimate of fair value (HK$31.6)

Significantly Below Fair Value: 9997 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 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 Kangji Medical Holdings forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

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

18.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 9997's forecast earnings growth (18.1% per year) is above the savings rate (1.6%).

Earnings vs Market: 9997's earnings (18.1% per year) are forecast to grow faster than the Hong Kong market (16.8% per year).

High Growth Earnings: 9997's earnings are forecast to grow, but not significantly.

Revenue vs Market: 9997's revenue (23.1% per year) is forecast to grow faster than the Hong Kong market (10.1% per year).

High Growth Revenue: 9997's revenue (23.1% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 9997's Return on Equity is forecast to be high in 3 years time (23.1%)

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Past Performance

How has Kangji Medical Holdings 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

31.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 9997 has a high level of non-cash earnings.

Growing Profit Margin: 9997's current net profit margins (66.2%) are higher than last year (48.9%).

Past Earnings Growth Analysis

Earnings Trend: 9997's earnings have grown significantly by 31% per year over the past 5 years.

Accelerating Growth: 9997's earnings growth over the past year (82.5%) exceeds its 5-year average (31% per year).

Earnings vs Industry: 9997 earnings growth over the past year (82.5%) exceeded the Medical Equipment industry 35.4%.

Return on Equity

High ROE: 9997's Return on Equity (14%) is considered low.

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Financial Health

How is Kangji Medical Holdings'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: 9997's short term assets (CN¥3.2B) exceed its short term liabilities (CN¥116.6M).

Long Term Liabilities: 9997's short term assets (CN¥3.2B) exceed its long term liabilities (CN¥13.4M).

Debt to Equity History and Analysis

Debt Level: 9997 is debt free.

Reducing Debt: 9997 has not had any debt for past 5 years.

Debt Coverage: 9997 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 9997 has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Kangji Medical Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

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

2.48%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 9997's dividend (2.48%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.88%).

High Dividend: 9997's dividend (2.48%) is low compared to the top 25% of dividend payers in the Hong Kong market (8.38%).

Stability and Growth of Payments

Stable Dividend: Too early to tell whether 9997's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if 9997's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (37.6%), 9997's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (42.9%), 9997'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?

2.4yrs

Average management tenure

CEO

Ming Zhong (46 yo)

18yrs

Tenure

Mr. Ming Zhong serves Chairman and Executive Director of Kangji Medical Holdings Limited since March 7, 2020 and Chief Executive Officer since August 24, 2004. Mr. Zhong is mainly responsible for overall m...

Leadership Team

Experienced Management: 9997's management team is considered experienced (2.4 years average tenure).

Board Members

Experienced Board: 9997's board of directors are not considered experienced ( 2.4 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.

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/08/06 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31