SEHK:3613

Stock Analysis Report

Beijing Tong Ren Tang Chinese Medicine

Executive Summary

Beijing Tong Ren Tang Chinese Medicine Company Limited, together with its subsidiaries, engages in the manufacture, retail, and wholesale of Chinese medicine and healthcare products to wholesalers and individuals.

Rewards

Trading at 38.3% below its fair value

Earnings are forecast to grow 10.16% per year

Earnings have grown 16.5% per year over the past 5 years

Risk Analysis

Highly volatile share price over past 3 months



Snowflake Analysis

Solid track record with excellent balance sheet.

Share Price & News

How has Beijing Tong Ren Tang Chinese Medicine's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 3613's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.2%

3613

1.0%

HK Pharmaceuticals

0.6%

HK Market


1 Year Return

-20.3%

3613

5.6%

HK Pharmaceuticals

-1.5%

HK Market

Return vs Industry: 3613 underperformed the Hong Kong Pharmaceuticals industry which returned 5.6% over the past year.

Return vs Market: 3613 underperformed the Hong Kong Market which returned -1.5% over the past year.


Shareholder returns

3613IndustryMarket
7 Day1.2%1.0%0.6%
30 Day-3.2%-8.0%-3.9%
90 Day-22.1%-7.7%-0.3%
1 Year-13.9%-20.3%7.6%5.6%2.0%-1.5%
3 Year8.5%-2.3%43.3%36.5%17.1%5.2%
5 Year10.2%-3.0%31.9%21.1%17.0%-2.2%

Price Volatility Vs. Market

How volatile is Beijing Tong Ren Tang Chinese Medicine's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Beijing Tong Ren Tang Chinese Medicine undervalued compared to its fair value and its price relative to the market?

38.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 3613 (HK$10.28) is trading below our estimate of fair value (HK$16.65)

Significantly Below Fair Value: 3613 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 3613 is poor value based on its PE Ratio (13.6x) compared to the Pharmaceuticals industry average (10.7x).

PE vs Market: 3613 is poor value based on its PE Ratio (13.6x) compared to the Hong Kong market (10.1x).


Price to Earnings Growth Ratio

PEG Ratio: 3613 is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: 3613 is overvalued based on its PB Ratio (2.8x) compared to the HK Pharmaceuticals industry average (1.1x).


Next Steps

Future Growth

How is Beijing Tong Ren Tang Chinese Medicine forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

10.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3613's forecast earnings growth (10.2% per year) is above the savings rate (1.6%).

Earnings vs Market: 3613's earnings (10.2% per year) are forecast to grow slower than the Hong Kong market (11.9% per year).

High Growth Earnings: 3613's earnings are forecast to grow, but not significantly.

Revenue vs Market: 3613's revenue (13.5% per year) is forecast to grow faster than the Hong Kong market (9.7% per year).

High Growth Revenue: 3613's revenue (13.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 3613's Return on Equity is forecast to be high in 3 years time (20.3%)


Next Steps

Past Performance

How has Beijing Tong Ren Tang Chinese Medicine performed over the past 5 years?

16.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 3613 has high quality earnings.

Growing Profit Margin: 3613's current net profit margins (40.1%) are higher than last year (38.5%).


Past Earnings Growth Analysis

Earnings Trend: 3613's earnings have grown by 16.5% per year over the past 5 years.

Accelerating Growth: 3613's earnings growth over the past year (17%) exceeds its 5-year average (16.5% per year).

Earnings vs Industry: 3613 earnings growth over the past year (17%) underperformed the Pharmaceuticals industry 23.4%.


Return on Equity

High ROE: 3613's Return on Equity (20.6%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Beijing Tong Ren Tang Chinese Medicine's financial position?


Financial Position Analysis

Short Term Liabilities: 3613's short term assets (HK$3.0B) exceed its short term liabilities (HK$259.5M).

Long Term Liabilities: 3613's short term assets (HK$3.0B) exceed its long term liabilities (HK$73.3M).


Debt to Equity History and Analysis

Debt Level: 3613's debt to equity ratio (0.04%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if 3613's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 3613's debt is well covered by operating cash flow (51493%).

Interest Coverage: 3613 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 3613 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 3613's debt is covered by short term assets (assets are 2627.3x debt).


Next Steps

Dividend

What is Beijing Tong Ren Tang Chinese Medicine's current dividend yield, its reliability and sustainability?

2.24%

Current Dividend Yield


Dividend Yield vs Market

company2.2%marketbottom25%2.2%markettop25%6.3%industryaverage1.8%forecastin3Years2.9%

Current dividend yield vs market & industry

Notable Dividend: 3613's dividend (2.24%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.24%).

High Dividend: 3613's dividend (2.24%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.31%).


Stability and Growth of Payments

Stable Dividend: 3613 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 3613's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.5%), 3613's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 3613's dividends in 3 years are forecast to be well covered by earnings (33.8% payout ratio).


Next Steps

Management

What is the CEO of Beijing Tong Ren Tang Chinese Medicine's salary, the management and board of directors tenure and is there insider trading?

0.7yrs

Average management tenure


CEO

Huan Ping Zhang (59yo)

0.7yrs

Tenure

HK$1,725,000

Compensation

Mr. Zhang Huan Ping has been the Chief Executive Officer of Beijing Tong Ren Tang Chinese Medicine Company Limited since April 18, 2019. Mr. Ping served as the Deputy General Manager of Beijing Tong Ren Ta ...


CEO Compensation Analysis

Compensation vs Market: Huan Ping's total compensation ($USD220.33K) is below average for companies of similar size in the Hong Kong market ($USD461.77K).

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


Management Age and Tenure

0.7yrs

Average Tenure

54yo

Average Age

Experienced Management: 3613's management team is not considered experienced ( 0.7 years average tenure), which suggests a new team.


Board Age and Tenure

6.7yrs

Average Tenure

57.5yo

Average Age

Experienced Board: 3613's board of directors are considered experienced (6.7 years average tenure).


Insider Trading

Insider Buying: 3613 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyHK$208,00026 Nov 19
Yong Ding
EntityIndividual
Role
Chairman of the Board
Chairman
Shares20,000
Max PriceHK$10.40
BuyHK$373,14018 Dec 18
Yong Ding
EntityIndividual
Role
Chairman of the Board
Chairman
Shares30,000
Max PriceHK$12.44

Ownership Breakdown

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


Management Team

  • Yong Ding (56yo)

    Chairman

    • Tenure: 0.8yrs
  • Huan Ping Zhang (59yo)

    CEO & Executive Director

    • Tenure: 0.7yrs
    • Compensation: HK$1.73m
  • Man Lin (43yo)

    CFO, Company Secretary & Executive Director

    • Tenure: 8.8yrs
    • Compensation: HK$1.73m
  • Xia Li (52yo)

    Chief Engineer

    • Tenure: 0yrs

Board Members

  • Yong Ding (56yo)

    Chairman

    • Tenure: 0.8yrs
  • Jasper Tsang (72yo)

    Independent Non-Executive Director

    • Tenure: 2.3yrs
    • Compensation: HK$240.00k
  • Frank Chan (47yo)

    Independent Non-Executive Director

    • Tenure: 6.7yrs
    • Compensation: HK$240.00k
  • Huan Ping Zhang (59yo)

    CEO & Executive Director

    • Tenure: 0.7yrs
    • Compensation: HK$1.73m
  • Zhong Zhao (61yo)

    Independent Non-Executive Director

    • Tenure: 6.7yrs
    • Compensation: HK$240.00k
  • Man Lin (43yo)

    CFO, Company Secretary & Executive Director

    • Tenure: 8.8yrs
    • Compensation: HK$1.73m

Company Information

Beijing Tong Ren Tang Chinese Medicine Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Beijing Tong Ren Tang Chinese Medicine Company Limited
  • Ticker: 3613
  • Exchange: SEHK
  • Founded: 2004
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: HK$8.505b
  • Shares outstanding: 837.10m
  • Website: https://www.tongrentangcm.com

Number of Employees


Location

  • Beijing Tong Ren Tang Chinese Medicine Company Limited
  • Office Tower
  • Room 1405-1409
  • Wanchai
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
3613SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDMay 2013
TQRDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 2013
3613SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMay 2013
3613SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMay 2013

Biography

Beijing Tong Ren Tang Chinese Medicine Company Limited, together with its subsidiaries, engages in the manufacture, retail, and wholesale of Chinese medicine and healthcare products to wholesalers and indi ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/07 12:45
End of Day Share Price2019/12/06 00:00
Earnings2019/06/30
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.