Hansoh Pharmaceutical Group (SEHK:3692) - Share price, News & Analysis

Q: What is the Fair Price of 3692 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

3692 (HK$15.04) is trading below our estimate of [[fair value]] (HK$28.63)

3692 fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	2/6
Past Performance	2/6
Financial Health	5/6
Dividends	0/6

3692 Stock Overview

Hansoh Pharmaceutical Group Company Limited, an investment holding company, engages in the research, development, manufacture, and sale of pharmaceutical products in the People’s Republic of China.

Rewards

Trading at 47.5% below our estimate of its fair value

Earnings are forecast to grow 15.15% per year

Earnings have grown 11.7% per year over the past 5 years

Risk Analysis

No risks detected for 3692 from our risk checks.

Hansoh Pharmaceutical Group Competitors

Sino Biopharmaceutical

SEHK:1177

HK$80.1b

CSPC Pharmaceutical Group

SEHK:1093

HK$96.5b

Guangzhou Baiyunshan Pharmaceutical Holdings

SEHK:874

HK$49.7b

China Resources Pharmaceutical Group

SEHK:3320

HK$29.7b

Price History & Performance

Summary of all time highs, changes and price drops for Hansoh Pharmaceutical Group
Historical stock prices
Current Share Price	HK$15.04
52 Week High	HK$26.20
52 Week Low	HK$12.00
Beta	0.30
1 Month Change	-3.09%
3 Month Change	11.91%
1 Year Change	-41.93%
3 Year Change	-36.67%
5 Year Change	n/a
Change since IPO	-22.87%

Recent News & Updates

Jun 09

An Intrinsic Calculation For Hansoh Pharmaceutical Group Company Limited (HKG:3692) Suggests It's 44% Undervalued

In this article we are going to estimate the intrinsic value of Hansoh Pharmaceutical Group Company Limited ( HKG:3692...

Shareholder Returns

	3692	HK Pharmaceuticals	HK Market
7D	-5.5%	-2.8%	-0.5%
1Y	-41.9%	-35.7%	-20.6%

Return vs Industry: 3692 underperformed the Hong Kong Pharmaceuticals industry which returned -35.7% over the past year.

Return vs Market: 3692 underperformed the Hong Kong Market which returned -20.6% over the past year.

Price Volatility

Is 3692's price volatile compared to industry and market?
3692 volatility
3692 Average Weekly Movement	6.4%
Pharmaceuticals Industry Average Movement	6.0%
Market Average Movement	6.5%
10% most volatile stocks in HK Market	12.6%
10% least volatile stocks in HK Market	3.2%

Stable Share Price: 3692 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: 3692's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1995	12,150	Huijuan Zhong	https://www.hspharm.com

Hansoh Pharmaceutical Group Company Limited, an investment holding company, engages in the research, development, manufacture, and sale of pharmaceutical products in the People’s Republic of China. The company provides products for therapeutic areas, including central nervous system diseases, oncology, anti-infectives, and metabolic diseases. Its principal products include Mailingda, a drug for the treatment of chronic myelogenous leukemia; and Ameile, Hansoh Xinfu, Pulaile, Zefei, Xinwei, Xinmei, Xintai, Tanneng, Oulanning, Ameining, Zetan, Hengjie, Hengsen, Fulaimei, Fulaidi, and Ruibote drugs.

Hansoh Pharmaceutical Group Fundamentals Summary

How do Hansoh Pharmaceutical Group's earnings and revenue compare to its market cap?
3692 fundamental statistics
Market Cap	HK$90.49b
Earnings (TTM)	HK$3.13b
Revenue (TTM)	HK$11.48b

28.4x

P/E Ratio

7.8x

P/S Ratio

Is 3692 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
3692 income statement (TTM)
Revenue	CN¥9.94b
Cost of Revenue	CN¥870.39m
Gross Profit	CN¥9.06b
Other Expenses	CN¥6.35b
Earnings	CN¥2.71b

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.46
Gross Margin	91.24%
Net Profit Margin	27.31%
Debt/Equity Ratio	18.7%

How did 3692 perform over the long term?

See historical performance and comparison

Dividends

0.6%

Current Dividend Yield

16%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 3692 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

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 3692?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 3692. This is calculated by dividing 3692's market cap by their current preferred multiple.
What is 3692's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥78.34b

3692 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	6.3x
Enterprise Value/EBITDA	19.7x
PEG Ratio	1.9x

Price to Earnings Ratio vs Peers

How does 3692's PE Ratio compare to its peers?

3692 PE Ratio vs Peers

The above table shows the PE ratio for 3692 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	8.7x
1177 Sino Biopharmaceutical	4.7x	-36.4%	HK$80.1b
1093 CSPC Pharmaceutical Group	15.1x	11.3%	HK$96.5b
874 Guangzhou Baiyunshan Pharmaceutical Holdings	7x	0.8%	HK$49.7b
3320 China Resources Pharmaceutical Group	7.9x	9.7%	HK$29.7b
3692 Hansoh Pharmaceutical Group	28.4x	15.1%	HK$89.1b

Price-To-Earnings vs Peers: 3692 is expensive based on its Price-To-Earnings Ratio (28.4x) compared to the peer average (8.7x).

Price to Earnings Ratio vs Industry

How does 3692's PE Ratio compare vs other companies in the HK Pharmaceuticals Industry?

Price-To-Earnings vs Industry: 3692 is expensive based on its Price-To-Earnings Ratio (28.4x) compared to the Hong Kong Pharmaceuticals industry average (7.8x)

Price to Earnings Ratio vs Fair Ratio

What is 3692'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.

3692 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	28.4x
Fair PE Ratio	17.3x

Price-To-Earnings vs Fair Ratio: 3692 is expensive based on its Price-To-Earnings Ratio (28.4x) compared to the estimated Fair Price-To-Earnings Ratio (17.2x).

Share Price vs Fair Value

What is the Fair Price of 3692 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 3692 (HK$15.04) is trading below our estimate of fair value (HK$28.63)

Significantly Below Fair Value: 3692 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 Hansoh Pharmaceutical Group forecast to perform in the next 1 to 3 years based on estimates from 13 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

15.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3692's forecast earnings growth (15.1% per year) is above the savings rate (1.6%).

Earnings vs Market: 3692's earnings (15.1% per year) are forecast to grow slower than the Hong Kong market (16.7% per year).

High Growth Earnings: 3692's earnings are forecast to grow, but not significantly.

Revenue vs Market: 3692's revenue (11.7% per year) is forecast to grow faster than the Hong Kong market (9.9% per year).

High Growth Revenue: 3692's revenue (11.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 3692's Return on Equity is forecast to be low in 3 years time (15.1%).

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Past Performance

How has Hansoh 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

11.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 3692 has high quality earnings.

Growing Profit Margin: 3692's current net profit margins (27.3%) are lower than last year (29.6%).

Past Earnings Growth Analysis

Earnings Trend: 3692's earnings have grown by 11.7% per year over the past 5 years.

Accelerating Growth: 3692's earnings growth over the past year (5.6%) is below its 5-year average (11.7% per year).

Earnings vs Industry: 3692 earnings growth over the past year (5.6%) underperformed the Pharmaceuticals industry 15.2%.

Return on Equity

High ROE: 3692's Return on Equity (13.5%) is considered low.

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Financial Health

How is Hansoh Pharmaceutical Group'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: 3692's short term assets (CN¥23.2B) exceed its short term liabilities (CN¥3.0B).

Long Term Liabilities: 3692's short term assets (CN¥23.2B) exceed its long term liabilities (CN¥4.1B).

Debt to Equity History and Analysis

Debt Level: 3692 has more cash than its total debt.

Reducing Debt: Insufficient data to determine if 3692's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 3692's debt is well covered by operating cash flow (68.9%).

Interest Coverage: 3692 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

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

Dividend Score

0/6

Dividend Score 0/6

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

0.58%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 3692's dividend (0.58%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.84%).

High Dividend: 3692's dividend (0.58%) is low compared to the top 25% of dividend payers in the Hong Kong market (8.33%).

Stability and Growth of Payments

Stable Dividend: 3692 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are stable.

Growing Dividend: 3692 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: 3692 is not paying a notable dividend for the Hong Kong market.

Cash Payout to Shareholders

Cash Flow Coverage: 3692 is not paying a notable dividend for the Hong Kong market.

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Management

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

6.7yrs

Average management tenure

CEO

Huijuan Zhong (61 yo)

6.67yrs

Tenure

Ms. Huijuan Zhong is the Chairlady, Chief Executive Officer, President and Executive Director of Hansoh Pharmaceutical Group Company Limited since December 2, 2015. Ms. Zhong was appointed as a Director of...

Leadership Team

Experienced Management: 3692's management team is seasoned and experienced (6.7 years average tenure).

Board Members

Experienced Board: 3692's board of directors are considered experienced (4.8 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.

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/08/17 00:00
End of Day Share Price	2022/08/17 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31