Huadong Medicine Co Ltd

Huadong Medicine maintains a conservative capital structure with a debt-to-equity ratio of 0.09 and a current ratio of 1.62, indicating strong short-term liquidity coverage. The balance sheet shows total assets of 39.04 billion CNY against total liabilities of 14.23 billion CNY, resulting in total equity of 24.81 billion CNY. Despite the low leverage, the risk assessment flags medium liquidity risk and notes that net cash is negative after subtracting total debt, suggesting potential constraints in immediate cash availability despite overall solvency. Long-term debt stands at 2.12 billion CNY, which is modest relative to the equity base.

Profitability metrics demonstrate solid returns, with a return on equity (ROE) of 13.76% and a return on assets (ROA) of 8.75%. The company generated net income of 3.41 billion CNY on revenue of 43.61 billion CNY, yielding a net margin of approximately 7.8%. Operating income was 4.10 billion CNY, reflecting an operating margin of roughly 9.4%. While cohort median comparisons are absent, the ROE exceeds typical thresholds for healthy pharmaceutical firms, indicating efficient use of shareholder capital.

Revenue concentration and geographic exposure details are not provided in the available data, preventing a detailed analysis of segment or regional risk. The company’s activity is broadly classified under Health Care Providers & Services, but specific product lines or customer bases are not disclosed in the input. Without segment data, the revenue mix remains opaque, though the total revenue figure of 43.61 billion CNY suggests a significant market presence.

Growth trajectory analysis is limited due to the absence of historical period data. The current financial snapshot provides a single-period view, with no year-over-year or quarterly trends available to assess momentum or deceleration. Consequently, the sustainability of the current revenue and profit levels cannot be evaluated against past performance.

Risk factors include medium liquidity risk and low dilution risk, with a key flag noting negative net cash after debt subtraction. The dilution risk is assessed as low, supported by the fact that basic and diluted shares outstanding are identical at 1.75 billion shares, indicating no significant in-the-money options or convertible securities currently impacting share count. The negative net cash position warrants monitoring for potential refinancing needs or cash flow volatility.

Recent events are reflected in analyst sentiment, with a mean price target of 47.63 CNY and a median target of 46.55 CNY, implying significant upside from the current market price of 29.38 CNY. The mean recommendation is 1.75, driven by six strong-buy and four buy ratings, with only one hold, indicating strong institutional confidence in the company’s prospects. No specific filing, news, or transcript observations are provided to detail recent operational developments.

Analysts project 63.5% upside to a mean price target of 47.63, signaling strong market confidence in future performance.

Net income CAGR of 10.4% over four years indicates consistent long-term profitability growth despite recent volatility.

Free cash flow surged 28.1% year-over-year, improving liquidity position and supporting potential dividend or buyback capacity.

Operating income fell 5.0% year-over-year, suggesting core business profitability is weakening despite revenue growth.

Revenue growth slowed to 4.1% year-over-year, indicating decelerating top-line momentum in a competitive market environment.

Long-term debt increased to 3.06 billion CNY in FY-1, raising leverage concerns before a projected decrease in FY0.

Medium liquidity risk flags suggest potential challenges in meeting short-term obligations or managing cash flow volatility.

Revenue ¥11.18B, +4,2% YoY; Operating income +6,0% YoY.

• ▍Revenue ¥11.18B, +4,2% YoY
• ▍Operating income +6,0% YoY
• ▍Net income +9,6% YoY
• ▍Net margin 9.0%

Revenue ¥10.99B, +4,5% YoY; Operating income −2,4% YoY.

• ▍Revenue ¥10.99B, +4,5% YoY
• ▍Operating income −2,4% YoY
• ▍Net income +7,7% YoY
• ▍Net margin 8.5%

Revenue ¥10.94B, +3,6% YoY; Operating income +10,1% YoY.

• ▍Revenue ¥10.94B, +3,6% YoY
• ▍Operating income +10,1% YoY
• ▍Net income +8,0% YoY
• ▍Net margin 8.2%

Revenue ¥10.74B; Operating income ¥1.13B.

• ▍Revenue ¥10.74B
• ▍Operating income ¥1.13B
• ▍Net margin 8.5%

Revenue ¥10.43B; Operating income ¥1.11B.

• ▍Revenue ¥10.43B
• ▍Operating income ¥1.11B
• ▍Net margin 9.1%

Revenue ¥10.51B; Operating income ¥1.13B.

• ▍Revenue ¥10.51B
• ▍Operating income ¥1.13B
• ▍Net margin 8.2%

Revenue ¥10.55B; Operating income ¥1.01B.

• ▍Revenue ¥10.55B
• ▍Operating income ¥1.01B
• ▍Net margin 7.9%

Revenue ¥43.61B, +4,1% YoY; Operating income −5,0% YoY.

• ▍Revenue ¥43.61B, +4,1% YoY
• ▍Operating income −5,0% YoY
• ▍Net income −2,8% YoY
• ▍Free cash flow +28,1% YoY
• ▍Net margin 7.8%

Revenue ¥41.91B, +3,2% YoY; Operating income +25,4% YoY.

• ▍Revenue ¥41.91B, +3,2% YoY
• ▍Operating income +25,4% YoY
• ▍Net income +23,7% YoY
• ▍Free cash flow −36,2% YoY
• ▍Net margin 8.4%

Revenue ¥40.62B, +7,7% YoY; Operating income +12,8% YoY.

• ▍Revenue ¥40.62B, +7,7% YoY
• ▍Operating income +12,8% YoY
• ▍Net income +13,6% YoY
• ▍Free cash flow −1,1% YoY
• ▍Net margin 7.0%

Revenue ¥37.71B, +9,1% YoY; Operating income +7,1% YoY.

• ▍Revenue ¥37.71B, +9,1% YoY
• ▍Operating income +7,1% YoY
• ▍Net income +8,6% YoY
• ▍Free cash flow −9,5% YoY
• ▍Net margin 6.6%

Revenue ¥34.56B; Operating income ¥2.85B.

• ▍Revenue ¥34.56B
• ▍Operating income ¥2.85B
• ▍Net margin 6.7%