Essex Bio-Technology (SEHK:1061) - Share price, News & Analysis

Q: What is the Fair Price of 1061 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

1061 (HK$3.52) is trading above our estimate of [[fair value]] (HK$2.27)

1061 fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	5/6
Past Performance	4/6
Financial Health	5/6
Dividends	4/6

1061 Stock Overview

Essex Bio-Technology Limited, an investment holding company, develops, manufactures, distributes, and sells biopharmaceutical products in the People’s Republic of China and internationally.

Rewards

Price-To-Earnings ratio (5.8x) is below the Hong Kong market (8.6x)

Earnings are forecast to grow 21.07% per year

Earnings grew by 58% over the past year

Risk Analysis

Unstable dividend track record

Essex Bio-Technology Competitors

CK Life Sciences Int'l. (Holdings)

SEHK:775

HK$7.0b

3SBio

SEHK:1530

HK$12.5b

Shanghai Haohai Biological Technology

SEHK:6826

HK$14.2b

RemeGen

SEHK:9995

HK$32.3b

Price History & Performance

Summary of all time highs, changes and price drops for Essex Bio-Technology
Historical stock prices
Current Share Price	HK$3.52
52 Week High	HK$6.78
52 Week Low	HK$3.23
Beta	0.55
1 Month Change	-4.87%
3 Month Change	-8.09%
1 Year Change	-42.76%
3 Year Change	-32.44%
5 Year Change	-17.76%
Change since IPO	255.56%

Recent News & Updates

Jun 22

Is Essex Bio-Technology (HKG:1061) Using Too Much Debt?

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it seems the smart money knows that...

May 02

Essex Bio-Technology (HKG:1061) Has Announced That It Will Be Increasing Its Dividend To HK$0.055

Essex Bio-Technology Limited's ( HKG:1061 ) dividend will be increasing to HK$0.055 on 20th of May. This makes the...

Shareholder Returns

	1061	HK Biotechs	HK Market
7D	-0.3%	-3.2%	-0.9%
1Y	-42.8%	-51.0%	-19.7%

Return vs Industry: 1061 exceeded the Hong Kong Biotechs industry which returned -51% over the past year.

Return vs Market: 1061 underperformed the Hong Kong Market which returned -19.7% over the past year.

Price Volatility

Is 1061's price volatile compared to industry and market?
1061 volatility
1061 Average Weekly Movement	5.1%
Biotechs Industry Average Movement	7.8%
Market Average Movement	6.5%
10% most volatile stocks in HK Market	12.9%
10% least volatile stocks in HK Market	3.2%

Stable Share Price: 1061 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: 1061's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1990	1,379	Haizhou Fang	https://www.essexbio.com

Essex Bio-Technology Limited, an investment holding company, develops, manufactures, distributes, and sells biopharmaceutical products in the People’s Republic of China and internationally. The company operates through Ophthalmic Products and Surgical Products segments. It researches and develops basic fibroblast growth factor products for the treatment of cellular proliferation, differentiation, and migration.

Essex Bio-Technology Fundamentals Summary

How do Essex Bio-Technology's earnings and revenue compare to its market cap?
1061 fundamental statistics
Market Cap	HK$1.96b
Earnings (TTM)	HK$345.97m
Revenue (TTM)	HK$1.64b

5.8x

P/E Ratio

1.2x

P/S Ratio

Is 1061 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
1061 income statement (TTM)
Revenue	HK$1.64b
Cost of Revenue	HK$241.89m
Gross Profit	HK$1.40b
Other Expenses	HK$1.05b
Earnings	HK$345.97m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.60
Gross Margin	85.23%
Net Profit Margin	21.13%
Debt/Equity Ratio	32.3%

How did 1061 perform over the long term?

See historical performance and comparison

Dividends

3.1%

Current Dividend Yield

16%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 1061 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

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 1061?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 1061. This is calculated by dividing 1061's market cap by their current preferred multiple.
What is 1061's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	HK$1.96b

1061 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	1.1x
Enterprise Value/EBITDA	4.4x
PEG Ratio	0.3x

Price to Earnings Ratio vs Peers

How does 1061's PE Ratio compare to its peers?

1061 PE Ratio vs Peers

The above table shows the PE ratio for 1061 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	52.5x
775 CK Life Sciences Int'l. (Holdings)	55.1x	n/a	HK$7.0b
1530 3SBio	6.5x	6.6%	HK$12.5b
6826 Shanghai Haohai Biological Technology	14.3x	20.6%	HK$14.2b
9995 RemeGen	133x	80.0%	HK$32.3b
1061 Essex Bio-Technology	5.8x	21.1%	HK$2.0b

Price-To-Earnings vs Peers: 1061 is good value based on its Price-To-Earnings Ratio (5.8x) compared to the peer average (52.5x).

Price to Earnings Ratio vs Industry

How does 1061's PE Ratio compare vs other companies in the Asian Biotechs Industry?

Price-To-Earnings vs Industry: 1061 is good value based on its Price-To-Earnings Ratio (5.8x) compared to the Hong Kong Biotechs industry average (12.1x)

Price to Earnings Ratio vs Fair Ratio

What is 1061'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.

1061 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	5.8x
Fair PE Ratio	11.7x

Price-To-Earnings vs Fair Ratio: 1061 is good value based on its Price-To-Earnings Ratio (5.8x) compared to the estimated Fair Price-To-Earnings Ratio (11.7x).

Share Price vs Fair Value

What is the Fair Price of 1061 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 1061 (HK$3.52) is trading above our estimate of fair value (HK$2.27)

Significantly Below Fair Value: 1061 is trading above our estimate of fair value.

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 Essex Bio-Technology forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

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

21.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1061's forecast earnings growth (21.1% per year) is above the savings rate (1.6%).

Earnings vs Market: 1061's earnings (21.1% per year) are forecast to grow faster than the Hong Kong market (17.2% per year).

High Growth Earnings: 1061's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 1061's revenue (17% per year) is forecast to grow faster than the Hong Kong market (10.1% per year).

High Growth Revenue: 1061's revenue (17% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 1061's Return on Equity is forecast to be high in 3 years time (29.6%)

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Past Performance

How has Essex Bio-Technology 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

15.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 1061 has high quality earnings.

Growing Profit Margin: 1061's current net profit margins (21.1%) are lower than last year (22.4%).

Past Earnings Growth Analysis

Earnings Trend: 1061's earnings have grown by 15.9% per year over the past 5 years.

Accelerating Growth: 1061's earnings growth over the past year (58%) exceeds its 5-year average (15.9% per year).

Earnings vs Industry: 1061 earnings growth over the past year (58%) exceeded the Biotechs industry 7.5%.

Return on Equity

High ROE: 1061's Return on Equity (19.9%) is considered low.

Discover strong past performing companies

Financial Health

How is Essex Bio-Technology's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 1061's short term assets (HK$1.5B) exceed its short term liabilities (HK$689.6M).

Long Term Liabilities: 1061's short term assets (HK$1.5B) exceed its long term liabilities (HK$439.6M).

Debt to Equity History and Analysis

Debt Level: 1061 has more cash than its total debt.

Reducing Debt: 1061's debt to equity ratio has increased from 28.7% to 32.3% over the past 5 years.

Debt Coverage: 1061's debt is well covered by operating cash flow (73.1%).

Interest Coverage: 1061 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Essex Bio-Technology 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

3.12%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 1061's dividend (3.12%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.87%).

High Dividend: 1061's dividend (3.12%) is low compared to the top 25% of dividend payers in the Hong Kong market (8.33%).

Stability and Growth of Payments

Stable Dividend: 1061's dividend payments have been volatile in the past 10 years.

Growing Dividend: 1061's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (15.8%), 1061's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (40.9%), 1061's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

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

21.6yrs

Average management tenure

CEO

Haizhou Fang (56 yo)

no data

Tenure

HK$2,477,422

Compensation

Mr. Haizhou Fang serves as the Managing Director and Executive Director of Essex Bio-Technology Limited and served as its General Manager. Mr. Fang is qualified as a Senior Pharmaceutical Engineer (Profess...

CEO Compensation Analysis

Compensation vs Market: Insufficient data to establish whether Haizhou's total compensation is reasonable compared to companies of similar size in the Hong Kong market.

Compensation vs Earnings: Haizhou's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: 1061's management team is seasoned and experienced (21.6 years average tenure).

Board Members

Experienced Board: 1061's board of directors are seasoned and experienced ( 17.9 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.

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/08/19 00:00
End of Day Share Price	2022/08/19 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31