CSPC Pharmaceutical Group (SEHK:1093) - Share price, News & Analysis

Q: What is the Fair Price of 1093 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

1093 (HK$7.55) is trading below our estimate of [[fair value]] (HK$17.65)

1093 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	2/6
Financial Health	6/6
Dividends	3/6

1093 Stock Overview

Rewards

Trading at 57.2% below our estimate of its fair value

Earnings are forecast to grow 11.56% per year

Trading below our calculated fair Price-To-Earnings ratio

Analysts in good agreement that stock price will rise by 59.4%

Risk Analysis

No risks detected for 1093 from our risk checks.

CSPC Pharmaceutical Group Competitors

Hansoh Pharmaceutical Group

SEHK:3692

HK$74.3b

Sino Biopharmaceutical

SEHK:1177

HK$67.1b

Guangzhou Baiyunshan Pharmaceutical Holdings

SEHK:874

HK$43.0b

China Resources Pharmaceutical Group

SEHK:3320

HK$33.5b

Price History & Performance

Summary of all time highs, changes and price drops for CSPC Pharmaceutical Group
Historical stock prices
Current Share Price	HK$7.55
52 Week High	HK$10.10
52 Week Low	HK$6.95
Beta	0.70
1 Month Change	-2.71%
3 Month Change	-3.08%
1 Year Change	-19.17%
3 Year Change	-10.30%
5 Year Change	8.50%
Change since IPO	1,689.63%

Recent News & Updates

Sep 15

CSPC Pharmaceutical Group (HKG:1093) Could Easily Take On More Debt

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...

Aug 26

CSPC Pharmaceutical Group (HKG:1093) Will Pay A Larger Dividend Than Last Year At CN¥0.10

CSPC Pharmaceutical Group Limited's ( HKG:1093 ) dividend will be increasing from last year's payment of the same...

Shareholder Returns

	1093	HK Pharmaceuticals	HK Market
7D	6.2%	-1.0%	-5.7%
1Y	-19.2%	-38.0%	-29.1%

Return vs Industry: 1093 exceeded the Hong Kong Pharmaceuticals industry which returned -36.6% over the past year.

Return vs Market: 1093 exceeded the Hong Kong Market which returned -28% over the past year.

Price Volatility

Is 1093's price volatile compared to industry and market?
1093 volatility
1093 Average Weekly Movement	5.5%
Pharmaceuticals Industry Average Movement	5.9%
Market Average Movement	6.4%
10% most volatile stocks in HK Market	12.5%
10% least volatile stocks in HK Market	3.1%

Stable Share Price: 1093 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: 1093's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1992	25,147	Cuilong Zhang	https://www.cspc.com.hk

CSPC Pharmaceutical Group Limited, an investment holding company, engages in the research and development, manufacture, and sale of pharmaceutical products in the People’s Republic of China, other Asian regions, the Americas, Europe, and internationally. The company operates through Finished Drugs, Bulk Products, and Functional Food and Others segments. It provides NBP soft capsules and injections for acute ischemic stroke; Oulaining capsules and injections to treat mild to moderate memory and mental impairment; Enxi to treat adult idiopathic Parkinson’s disease; Duomeisu for lymphoma, multiple myeloma, ovarian and breast cancers, and other malignant tumors; Jinyouli to prevent leucopenia and infection induced by chemotherapy; and Keaili for breast cancer.

CSPC Pharmaceutical Group Fundamentals Summary

How do CSPC Pharmaceutical Group's earnings and revenue compare to its market cap?
1093 fundamental statistics
Market Cap	HK$89.96b
Earnings (TTM)	HK$6.01b
Revenue (TTM)	HK$32.33b

15.0x

P/E Ratio

2.8x

P/S Ratio

Is 1093 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
1093 income statement (TTM)
Revenue	CN¥29.65b
Cost of Revenue	CN¥7.71b
Gross Profit	CN¥21.95b
Other Expenses	CN¥16.44b
Earnings	CN¥5.51b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.46
Gross Margin	74.02%
Net Profit Margin	18.58%
Debt/Equity Ratio	1.3%

How did 1093 perform over the long term?

See historical performance and comparison

Dividends

2.5%

Current Dividend Yield

36%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 1093 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 1093?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 1093. This is calculated by dividing 1093's market cap by their current preferred multiple.
What is 1093's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥82.52b

1093 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	2.4x
Enterprise Value/EBITDA	9.4x
PEG Ratio	1.3x

Price to Earnings Ratio vs Peers

How does 1093's PE Ratio compare to its peers?

1093 PE Ratio vs Peers

The above table shows the PE ratio for 1093 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	11.7x
3692 Hansoh Pharmaceutical Group	25x	18.3%	HK$74.3b
1177 Sino Biopharmaceutical	7.6x	0.9%	HK$67.1b
874 Guangzhou Baiyunshan Pharmaceutical Holdings	6.6x	0.9%	HK$43.0b
3320 China Resources Pharmaceutical Group	7.7x	-3.0%	HK$33.5b
1093 CSPC Pharmaceutical Group	15x	11.6%	HK$90.0b

Price-To-Earnings vs Peers: 1093 is expensive based on its Price-To-Earnings Ratio (15x) compared to the peer average (11.7x).

Price to Earnings Ratio vs Industry

How does 1093's PE Ratio compare vs other companies in the HK Pharmaceuticals Industry?

Price-To-Earnings vs Industry: 1093 is expensive based on its Price-To-Earnings Ratio (15x) compared to the Hong Kong Pharmaceuticals industry average (8.8x)

Price to Earnings Ratio vs Fair Ratio

What is 1093'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.

1093 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	15x
Fair PE Ratio	15.2x

Price-To-Earnings vs Fair Ratio: 1093 is good value based on its Price-To-Earnings Ratio (15x) compared to the estimated Fair Price-To-Earnings Ratio (15.2x).

Share Price vs Fair Value

What is the Fair Price of 1093 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 1093 (HK$7.55) is trading below our estimate of fair value (HK$17.65)

Significantly Below Fair Value: 1093 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 and analysts are within a statistically confident range of agreement.

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Future Growth

How is CSPC Pharmaceutical Group forecast to perform in the next 1 to 3 years based on estimates from 26 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

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

11.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1093's forecast earnings growth (11.6% per year) is above the savings rate (1.6%).

Earnings vs Market: 1093's earnings (11.6% per year) are forecast to grow slower than the Hong Kong market (17.1% per year).

High Growth Earnings: 1093's earnings are forecast to grow, but not significantly.

Revenue vs Market: 1093's revenue (11.3% per year) is forecast to grow faster than the Hong Kong market (9.8% per year).

High Growth Revenue: 1093's revenue (11.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 1093's Return on Equity is forecast to be low in 3 years time (17.8%).

Discover growth companies

Past Performance

How has CSPC Pharmaceutical Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

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

21.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 1093 has high quality earnings.

Growing Profit Margin: 1093's current net profit margins (18.6%) are lower than last year (22.6%).

Past Earnings Growth Analysis

Earnings Trend: 1093's earnings have grown significantly by 21% per year over the past 5 years.

Accelerating Growth: 1093's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1093 had negative earnings growth (-6.8%) over the past year, making it difficult to compare to the Pharmaceuticals industry average (3.7%).

Return on Equity

High ROE: 1093's Return on Equity (19.1%) is considered low.

Discover strong past performing companies

Financial Health

How is CSPC Pharmaceutical Group'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: 1093's short term assets (CN¥22.8B) exceed its short term liabilities (CN¥8.5B).

Long Term Liabilities: 1093's short term assets (CN¥22.8B) exceed its long term liabilities (CN¥964.1M).

Debt to Equity History and Analysis

Debt Level: 1093 has more cash than its total debt.

Reducing Debt: 1093's debt to equity ratio has reduced from 9.7% to 1.3% over the past 5 years.

Debt Coverage: 1093's debt is well covered by operating cash flow (1551.9%).

Interest Coverage: 1093 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is CSPC Pharmaceutical Group current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

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

2.52%

Current Dividend Yield

Dividend Yield vs Market

CSPC Pharmaceutical Group Dividend Yield vs Market

How does CSPC Pharmaceutical Group dividend yield compare to the market?
Segment	Dividend Yield
Company (CSPC Pharmaceutical Group)	2.5%
Market Bottom 25% (HK)	3.0%
Market Top 25% (HK)	8.9%
Industry Average (Pharmaceuticals)	2.9%
Analyst forecast in 3 Years (CSPC Pharmaceutical Group)	2.4%

Notable Dividend: 1093's dividend (2.52%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.98%).

High Dividend: 1093's dividend (2.52%) is low compared to the top 25% of dividend payers in the Hong Kong market (8.85%).

Stability and Growth of Payments

Stable Dividend: 1093's dividend payments have been volatile in the past 10 years.

Growing Dividend: 1093's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (36%), 1093's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (50.8%), 1093's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

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

3.0yrs

Average management tenure

CEO

Cuilong Zhang (53 yo)

4.17yrs

Tenure

CN¥9,108,000

Compensation

Mr. Cuilong Zhang has been the Vice Chairman of CSPC Pharmaceutical Group Ltd since May 21, 2019 and serves as its Chief Executive Officer since May 27, 2022. He was Rotating Chief Executive Officer of CSP...

CEO Compensation Analysis

Cuilong Zhang's Compensation vs CSPC Pharmaceutical Group Earnings

How has Cuilong Zhang's remuneration changed compared to CSPC Pharmaceutical Group's earnings?
Date	Total Comp.	Salary	Company Earnings
Jun 30 2022	n/a	n/a	CN¥6b
Mar 31 2022	n/a	n/a	CN¥6b
Dec 31 2021	CN¥9m	CN¥693k	CN¥6b
Sep 30 2021	n/a	n/a	CN¥6b
Jun 30 2021	n/a	n/a	CN¥6b
Mar 31 2021	n/a	n/a	CN¥5b
Dec 31 2020	CN¥9m	CN¥693k	CN¥5b
Sep 30 2020	n/a	n/a	CN¥4b
Jun 30 2020	n/a	n/a	CN¥4b
Mar 31 2020	n/a	n/a	CN¥4b
Dec 31 2019	CN¥7m	CN¥693k	CN¥4b
Sep 30 2019	n/a	n/a	CN¥4b
Jun 30 2019	n/a	n/a	CN¥3b
Mar 31 2019	n/a	n/a	CN¥3b
Dec 31 2018	CN¥4m	CN¥298k	CN¥3b

Compensation vs Market: Cuilong's total compensation ($USD1.26M) is above average for companies of similar size in the Hong Kong market ($USD926.98K).

Compensation vs Earnings: Cuilong's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: 1093's management team is considered experienced (3 years average tenure).

Board Members

Experienced Board: 1093's board of directors are considered experienced (8 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

SEHK:1093 Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Shares	Max Price
01 Apr 22	BuyHK$1,999,863	Kin Man Chak	Individual	3,840,000	HK$0.52
01 Apr 22	BuyHK$8,850,002	Qingxi Wang	Individual	3,000,000	HK$2.95
26 Nov 21	BuyHK$16,510,004	Dongchen Cai	Individual	2,000,000	HK$8.26
24 Nov 21	BuyHK$8,009,998	Dongchen Cai	Individual	1,000,000	HK$8.01
23 Nov 21	BuyHK$48,319,194	Dongchen Cai	Individual	6,000,000	HK$8.05

Ownership Breakdown

What is the ownership structure of 1093?
Owner Type	Number of Shares	Ownership Percentage
Private Companies	755,676,313	6.3%
Individual Insiders	2,801,969,350	23.5%
Institutions	4,016,858,768	33.7%
General Public	4,341,015,301	36.4%

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

Top Shareholders

Top 25 shareholders own 58.16% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
23.46%	Dongchen Cai	2,795,121,670	CN¥21.1b	0%	no data
7.1%	UBS Asset Management	846,205,884	CN¥6.4b	-4.23%	0.16%
6.12%	Common Success International Limited	728,796,313	CN¥5.5b	0%	no data
4.87%	BlackRock, Inc.	579,695,709	CN¥4.4b	-6.32%	0.01%
2.95%	The Vanguard Group, Inc.	351,001,138	CN¥2.7b	1.41%	0.01%
2.58%	Harding Loevner LP	307,568,600	CN¥2.3b	-11.31%	0.87%
2.15%	First Sentier Investors (Australia) IM Ltd	256,189,034	CN¥1.9b	0%	0.55%
1.22%	Norges Bank Investment Management	145,205,037	CN¥1.1b	0%	0.02%
0.98%	State Street Global Advisors, Inc.	116,341,210	CN¥878.4m	7.93%	0.01%
0.96%	Matthews International Capital Management, LLC	114,596,960	CN¥865.2m	-0.73%	0.7%
0.79%	Caisse de dépôt et placement du Québec	94,612,120	CN¥714.3m	0%	0.12%
0.79%	Bosera Asset Management Co., Ltd.	93,924,000	CN¥709.1m	169.63%	0.54%
0.71%	Dimensional Fund Advisors LP	85,035,282	CN¥642.0m	2.25%	0.02%
0.52%	Hang Seng Investment Management Limited	62,462,791	CN¥471.6m	2.87%	0.73%
0.41%	Wellington Management Group LLP	49,364,807	CN¥372.7m	-0.56%	0.01%
0.32%	Amundi Asset Management	38,401,521	CN¥289.9m	187.86%	0.01%
0.32%	RBC Global Asset Management Inc.	37,541,853	CN¥283.4m	-0.21%	0.03%
0.28%	Geode Capital Management, LLC	33,732,186	CN¥254.7m	3.44%	no data
0.28%	Bellevue Asset Management AG	33,166,640	CN¥250.4m	0%	0.35%
0.26%	Goldman Sachs Asset Management, L.P.	30,627,695	CN¥231.2m	-0.31%	0.01%
0.24%	China Asset Management Co., Ltd.	28,116,564	CN¥212.3m	-2.69%	0.06%
0.23%	Massive Top Limited	26,880,000	CN¥202.9m	0%	no data
0.22%	Northern Trust Global Investments	26,643,447	CN¥201.2m	2.41%	0.01%
0.2%	Neuberger Berman Investment Advisers LLC	24,240,000	CN¥183.0m	-1.3%	0.02%
0.2%	UBS SDIC Fund Management Co. Ltd.	24,064,640	CN¥181.7m	0%	0.48%

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
CHJT.F	OTCPK (Pink Sheets LLC)	Yes	Ordinary Shares	US	USD	Jun 1994
1093	SEHK (The Stock Exchange of Hong Kong Ltd.)	Yes	Ordinary Shares	HK	HKD	Jun 1994
CVG	DB (Deutsche Boerse AG)	Yes	Ordinary Shares	DE	EUR	Jun 1994
1093	SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)	Yes	Ordinary Shares	HK	HKD	Jun 1994
1093	SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)	Yes	Ordinary Shares	HK	HKD	Jun 1994
1093 N	BMV (Bolsa Mexicana de Valores)	Yes	Ordinary Shares	MX	MXN	Jun 1994
CSPC.Y	OTCPK (Pink Sheets LLC)		UNSPON ADS EACH REP 4 ORD SHS	US	USD	May 2018
CVGU	DB (Deutsche Boerse AG)		UNSPON ADS EACH REP 4 ORD SHS	DE	EUR	May 2018

Data	Last Updated (UTC time)
Company Analysis	2022/09/29 00:00
End of Day Share Price	2022/09/29 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31