SEHK:570

Stock Analysis Report

China Traditional Chinese Medicine Holdings

Executive Summary

China Traditional Chinese Medicine Holdings Co.

Snowflake

Fundamentals

Undervalued with excellent balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has China Traditional Chinese Medicine Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-1.6%

570

3.9%

HK Pharmaceuticals

3.3%

HK Market


1 Year Return

-24.3%

570

5.6%

HK Pharmaceuticals

1.6%

HK Market

Return vs Industry: 570 underperformed the Hong Kong Pharmaceuticals industry which returned 5.6% over the past year.

Return vs Market: 570 underperformed the Hong Kong Market which returned 1.6% over the past year.


Shareholder returns

570IndustryMarket
7 Day-1.6%3.9%3.3%
30 Day-5.7%2.8%-0.009%
90 Day2.2%6.5%-5.1%
1 Year-22.0%-24.3%7.5%5.6%5.3%1.6%
3 Year-3.0%-9.2%55.2%47.2%16.1%4.4%
5 Year-5.8%-13.3%29.0%18.5%20.4%0.3%

Price Volatility Vs. Market

How volatile is China Traditional Chinese Medicine Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is China Traditional Chinese Medicine Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: 570 (HK$3.64) is trading below our estimate of fair value (HK$13.99)

Significantly Undervalued: 570 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 570 is good value based on its PE Ratio (10.8x) compared to the Pharmaceuticals industry average (11x).

PE vs Market: 570 is poor value based on its PE Ratio (10.8x) compared to the Hong Kong market (10.4x).


Price to Earnings Growth Ratio

Low PEG Ratio: 570 is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: 570 is good value based on its PB Ratio (1x) compared to the HK Pharmaceuticals industry average (1.2x).


Next Steps

Future Growth

How is China Traditional Chinese Medicine Holdings forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

19.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 570's forecast earnings growth (19.3% per year) is above the savings rate (2%).

Earnings vs Market: 570's earnings (19.3% per year) are forecast to grow faster than the Hong Kong market (11.3% per year).

High Growth Earnings: 570's earnings are forecast to grow, but not significantly.

Revenue vs Market: 570's revenue (18.8% per year) is forecast to grow faster than the Hong Kong market (10.2% per year).

High Growth Revenue: 570's revenue (18.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: 570's Return on Equity is forecast to be low in 3 years time (11.8%).


Next Steps

Past Performance

How has China Traditional Chinese Medicine Holdings performed over the past 5 years?

28.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 570's earnings have grown significantly by 28.6% per year over the past 5 years.

Accelerating Growth: 570's earnings growth over the past year (15.4%) is below its 5-year average (28.6% per year).

Earnings vs Industry: 570 earnings growth over the past year (15.4%) underperformed the Pharmaceuticals industry 21.6%.


Return on Equity

High ROE: 570's Return on Equity (9.2%) is considered low.


Return on Assets

ROA vs Industry: 570's Return on Assets is below or equal to the Pharmaceuticals industry average last year.


Return on Capital Employed

ROCE Improving: 570 has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is China Traditional Chinese Medicine Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 570's short term assets (CN¥15.1B) exceeds its short term liabilities (CN¥10.9B)

Long Term Liabilities: 570's short term assets (15.1B) exceeds its long term liabilities (2.2B)


Debt to Equity History and Analysis

Debt Level: 570's debt to equity ratio (33.4%) is considered satisfactory

Reducing Debt: 570's debt to equity ratio has reduced from 38% to 33.4% over the past 5 years.

Debt Coverage: 570's debt is not well covered by operating cash flow (17.9%).

Interest Coverage: 570's interest payments on its debt are well covered by EBIT (9.7x coverage).


Balance Sheet

Inventory Level: 570 has a high level of physical assets or inventory.

Debt Coverage by Assets: 570's debt is covered by short term assets (assets are 2.465610x debt).


Next Steps

Dividend

What is China Traditional Chinese Medicine Holdings's current dividend yield, its reliability and sustainability?

3.03%

Current Dividend Yield


Dividend Yield vs Market

company3.0%marketbottom25%2.3%markettop25%6.3%industryaverage1.7%forecastin3Years3.7%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 570's dividend (3.04%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.26%).

High Dividend: 570's dividend (3.04%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.25%).

Stable Dividend: 570's dividend payments have been volatile in the past 10 years.

Growing Dividend: 570's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.2%), 570's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 570's dividends in 3 years are forecast to be well covered by earnings (29.6% payout ratio).


Next Steps

Management

What is the CEO of China Traditional Chinese Medicine Holdings's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Xiaochun Wang (51yo)

2.6yrs

Tenure

CN¥2,160,000

Compensation

Mr. Wang Xiaochun has been Managing Director of China Traditional Chinese Medicine Holdings Co. Limited (alternatively China Traditional Chinese Medicine Co. Limited and formerly Wing Shan International Lt ...


CEO Compensation Analysis

Compensation vs. Market: Xiaochun's total compensation ($USD304.52K) is about average for companies of similar size in the Hong Kong market ($USD555.74K).

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


Management Age and Tenure

2.3yrs

Average Tenure

51yo

Average Age

Experienced Management: 570's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

1.5yrs

Average Tenure

53.5yo

Average Age

Experienced Board: 570's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellCN¥547,800,04731 Mar 19
Xiaochun Wang
EntityIndividual
Role
Chief Executive Officer
CEO, President
Shares110,000,000
Max PriceCN¥4.98

Ownership Breakdown


Management Team

  • Xiaochun Wang (51yo)

    CEO, President

    • Tenure: 2.6yrs
    • Compensation: CN¥2.16m
  • Dongji Zhao (51yo)

    VP & Joint Company Secretary

    • Tenure: 2.3yrs
    • Compensation: CN¥1.56m
  • Xian Wu (58yo)

    Executive Chairman

    • Tenure: 6.7yrs
  • Suet Lun Leung (35yo)

    Joint Company Secretary

    • Tenure: 3yrs
  • Wenming Yang (55yo)

    VP & Executive Director

    • Tenure: 0.8yrs
  • Xingkai Wang (39yo)

    Chief Financial Officer

    • Tenure: 0.8yrs

Board Members

  • Xiaochun Wang (51yo)

    CEO, President

    • Tenure: 2.6yrs
    • Compensation: CN¥2.16m
  • Rong Xie (67yo)

    Independent Non-Executive Director

    • Tenure: 6.7yrs
    • Compensation: CN¥254.00k
  • Ling Qin (59yo)

    Independent Non-Executive Director

    • Tenure: 0.7yrs
  • Xian Wu (58yo)

    Executive Chairman

    • Tenure: 6.7yrs
  • Hailson Yu (63yo)

    Independent Non-Executive Director

    • Tenure: 5.9yrs
    • Compensation: CN¥254.00k
  • Shanhua Yang (52yo)

    Non-Executive Director

    • Tenure: 1.6yrs
  • Kaipin Kui (34yo)

    Non Executive Director

    • Tenure: 1.4yrs
    • Compensation: CN¥146.00k
  • Wenming Yang (55yo)

    VP & Executive Director

    • Tenure: 0.8yrs
  • Binghua Yang (38yo)

    Non-Executive Director

    • Tenure: 0.8yrs
  • Kan Wang (34yo)

    Non-Executive Director

    • Tenure: 0.8yrs

Company Information

China Traditional Chinese Medicine Holdings Co. Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: China Traditional Chinese Medicine Holdings Co. Limited
  • Ticker: 570
  • Exchange: SEHK
  • Founded:
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: HK$18.381b
  • Shares outstanding: 5.04b
  • Website: https://www.china-tcm.com.cn

Number of Employees


Location

  • China Traditional Chinese Medicine Holdings Co. Limited
  • Ronggui high tech Park Keyuan Road
  • Shunde District
  • Foshan
  • Guangdong Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
570SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDMay 1993
570SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMay 1993
570SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMay 1993

Biography

China Traditional Chinese Medicine Holdings Co. Limited, an investment holding company, engages in the research and development, production, and sale of Chinese medicine and pharmaceutical products in the  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/17 12:34
End of Day Share Price2019/10/17 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.