China Traditional Chinese Medicine Holdings Co (0570) AI Stock Analysis

• Market Cap: HK$11.08B
• Dividend Yield: 3.66%
• Average Volume (3M): 51.13M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.43
• Revenue Growth: -9.58%
• EPS Growth: -128.83%
• Country: HK
• Employees: 16,753
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -0.02
• Shares Outstanding: 5,035,802,000
• 10 Day Avg. Volume: 46,853,920
• 30 Day Avg. Volume: 51,130,115
• PEG Ratio: -2.11
• Price to Book (P/B): 0.52
• Price to Sales (P/S): 0.66
• P/FCF Ratio: 5.28
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$1.60
• Price Target Upside: -25.93% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: HK$2.00 ▼(-7.41% Downside)

The overall stock score is primarily influenced by financial performance and technical analysis. The company's strong gross margin and solid balance sheet are overshadowed by declining profitability and cash flow issues. Technical indicators suggest mixed signals, with overbought conditions and some bullish momentum. Valuation concerns are highlighted by a negative P/E ratio, although the dividend yield offers some investor appeal.

Positive Factors

High gross margins

Sustained ~50% gross margins indicate durable product-level pricing power and a favorable cost structure in TCM manufacturing. High gross margins provide a long-term buffer versus raw material swings, support reinvestment in R&D and distribution, and enable margin recovery if operating efficiency improves.

Strong balance sheet and low leverage

A consistently high equity ratio and low leverage give the company long-term financial flexibility to fund capex, expand channels, or withstand demand cycles without heavy refinancing. This conservative capital structure reduces default risk and preserves strategic optionality for growth investments.

Diversified revenue channels and sector tailwind

Multiple sales channels (stores, e-commerce, healthcare partnerships) lower concentration risk and broaden customer access. Combined with structural consumer demand for natural health solutions and rising acceptance of TCM, this supports durable addressable market expansion and long-term revenue potential.

Negative Factors

Sharply declining net profit margin

A collapse in net margin erodes returns to shareholders and weakens internal funding capacity. Persistently thin net income reduces ROE and constrains the company’s ability to finance expansion or sustain dividends, making long-term strategic initiatives harder without improving operating profitability.

Weak cash generation and negative free cash flow

Negative free cash flow and effectively zero operating cash flow in 2024 indicate structural cash conversion issues. Poor cash generation limits ability to fund working capital, capex, and dividends, increasing reliance on external financing or asset sales and raising execution risk over the medium term.

Inconsistent revenue and sharp EPS decline

Negative top-line growth and a dramatic EPS decline signal execution or demand problems that impair scalability. Inconsistent revenue undermines margin recovery, complicates forecasting and investment decisions, and may indicate market-share pressure or ineffective channel execution over the coming months.

China Traditional Chinese Medicine Holdings Co Business Overview & Revenue Model

Company Description

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 People's Republic of China. The company offers granules, finished drugs, decoction pieces, and healthcare products. It is also involved in the plantation and management of Chinese medicinal herbs; manufacturing of traditional Chinese medicines (TCM); trading of pharmaceutical products; provision of TCM marketing, advertising, and consulting services; and retail of pharmaceuticals and decoction products. The company also provides property leasing services. It sells its products to hospitals and retail pharmacies. The company was formerly known as China Traditional Chinese Medicine Co. Limited and changed its name to China Traditional Chinese Medicine Holdings Co. Limited in July 2016. China Traditional China Traditional Chinese Medicine Holdings Co. Limited was founded in 1573 and is headquartered in Wan Chai, Hong Kong.

How the Company Makes Money

China Traditional Chinese Medicine Holdings Co. generates revenue through multiple streams. The primary source of income is the manufacturing and sale of traditional Chinese medicine products, which include both over-the-counter and prescription medicines. The company capitalizes on the growing demand for TCM by offering a wide array of products that address various health conditions and promote overall wellness. Additionally, CTCM benefits from strategic partnerships and collaborations with healthcare providers and institutions, enhancing its distribution network and market reach. A significant portion of its earnings also comes from exporting TCM products to international markets, leveraging the increasing global acceptance of traditional Chinese medicine. The company invests in research and development to innovate and expand its product portfolio, which in turn supports its financial growth.

China Traditional Chinese Medicine Holdings Co Financial Statement Overview

Summary

The company maintains a strong gross margin and a solid balance sheet with low leverage. However, declining profitability, inconsistent revenue growth, and cash flow issues pose significant risks. The net profit margin has sharply declined, and free cash flow has turned negative, raising concerns about financial sustainability.

Income Statement

The company has demonstrated strong gross profit margins, averaging around 50% over the years, which is commendable in maintaining a healthy cost structure. However, the net profit margin has severely declined from 7.09% in 2023 to 0.33% in 2024, indicating significant pressure on profitability. Revenue growth has been inconsistent, with a notable decline in 2024. EBIT and EBITDA margins have also decreased, reflecting challenges in operational efficiency.

Balance Sheet

The balance sheet is relatively strong with a healthy equity base, reflected by an equity ratio of over 60% consistently. The debt-to-equity ratio has remained low, indicating conservative leverage. However, the return on equity has decreased significantly due to lower net income, which could be a concern for investors seeking returns.

Cash Flow

Cash flow management is a concern, with free cash flow turning negative in recent years, except for 2023. Operating cash flow is weak, particularly in 2024, with zero reported, which raises sustainability issues. The free cash flow to net income ratio is unfavorable, highlighting inefficiencies in converting earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.59B	16.51B	18.12B	14.30B	19.05B	14.81B
Gross Profit	7.43B	7.86B	9.27B	7.20B	11.83B	9.13B
EBITDA	1.64B	1.82B	2.56B	2.16B	3.59B	3.16B
Net Income	-264.83M	54.07M	1.29B	764.49M	1.93B	1.66B
Balance Sheet
Total Assets	34.53B	35.06B	37.07B	35.62B	36.39B	33.09B
Cash, Cash Equivalents and Short-Term Investments	5.27B	5.34B	3.69B	3.46B	4.14B	5.03B
Total Debt	3.60B	4.02B	5.16B	5.04B	5.06B	5.22B
Total Liabilities	11.13B	11.13B	13.13B	12.67B	13.73B	12.19B
Stockholders Equity	20.70B	21.20B	21.16B	20.17B	19.72B	18.06B
Cash Flow
Free Cash Flow	-343.51M	2.07B	680.20M	565.09M	-81.17M	-1.02B
Operating Cash Flow	-569.70M	2.58B	1.17B	1.09B	796.03M	228.47M
Investing Cash Flow	165.25M	-379.24M	-477.62M	-374.15M	-536.94M	-1.07B
Financing Cash Flow	-47.07M	-1.39B	-584.31M	-557.28M	-724.32M	-1.01B

China Traditional Chinese Medicine Holdings Co Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0570, the sentiment is Neutral. The current price of 2.16 is above the 20-day moving average (MA) of 2.15, below the 50-day MA of 2.25, and below the 200-day MA of 2.20, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 52.62 is Neutral, neither overbought nor oversold. The STOCH value of 82.64 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:0570.

China Traditional Chinese Medicine Holdings Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2877	73 Outperform	HK$7.07B	7.93	10.85%	5.80%	-20.64%	-25.39%
1681	72 Outperform	HK$13.78B	12.86	25.92%	3.93%	19.05%	13.68%
0719	58 Neutral	HK$10.64B	11.78	7.48%	4.47%	1.65%	-16.38%
0570	54 Neutral	HK$11.08B	-38.73	-1.26%	3.66%	-9.58%	-128.83%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
0460	43 Neutral	HK$12.60B	-142.11	-1.87%	0.87%	19.21%	-115.91%

China Traditional Chinese Medicine Holdings Co Corporate Events

China TCM Sets February EGM, Closes Register for Connected Transactions Vote

China Traditional Chinese Medicine Holdings Co. has scheduled an extraordinary general meeting (EGM) for 2 February 2026 to seek shareholder approval for the renewal of certain continuing connected transaction agreements and the transactions contemplated under them. To determine shareholders’ eligibility to attend and vote, the company will close its register of members from 28 January to 2 February 2026, during which no share transfers will be registered, and it has set 27 January 2026 as the deadline for lodging transfer documents, with a circular, EGM notice and proxy form to be dispatched to shareholders in due course, underscoring the company’s ongoing governance processes and regulatory compliance in managing related-party dealings.

The most recent analyst rating on (HK:0570) stock is a Sell with a HK$1.60 price target. To see the full list of analyst forecasts on China Traditional Chinese Medicine Holdings Co stock, see the HK:0570 Stock Forecast page.

China TCM Delays Circular on Renewal of Connected Transactions to January 2026

China Traditional Chinese Medicine Holdings Co. Limited has announced a delay in sending to shareholders a circular relating to the renewal of certain continuing connected transactions. The circular, which will include details of the transaction agreements, recommendations from the Independent Board Committee, and advice from the Independent Financial Adviser, was originally expected to be dispatched around 16 December 2025 but will now be sent on or before 15 January 2026, as the company needs more time to prepare and finalise the required information; the postponement slightly extends the timetable for shareholder review and approval at the forthcoming extraordinary general meeting but does not alter the substance of the proposed transactions.

The most recent analyst rating on (HK:0570) stock is a Sell with a HK$1.60 price target. To see the full list of analyst forecasts on China Traditional Chinese Medicine Holdings Co stock, see the HK:0570 Stock Forecast page.

China Traditional Chinese Medicine Holdings Co. Announces Board Committee Changes

China Traditional Chinese Medicine Holdings Co. Limited announced a change in its board committee composition, with Mr. Liu Haijian being re-designated as a member of the Remuneration and Evaluation Committee, effective November 26, 2025. This strategic move is expected to enhance the company’s corporate governance by aligning its remuneration system with long-term performance goals and shareholder value growth, thereby improving decision-making quality and management precision.

The most recent analyst rating on (HK:0570) stock is a Sell with a HK$1.60 price target. To see the full list of analyst forecasts on China Traditional Chinese Medicine Holdings Co stock, see the HK:0570 Stock Forecast page.

China Traditional Chinese Medicine Holdings Announces Board Composition

China Traditional Chinese Medicine Holdings Co. Limited has announced the composition of its board of directors, detailing the roles and functions of each member. This update provides transparency in governance and may impact the company’s strategic direction and decision-making processes, potentially affecting stakeholders’ interests and the company’s position within the traditional Chinese medicine industry.

The most recent analyst rating on (HK:0570) stock is a Sell with a HK$1.60 price target. To see the full list of analyst forecasts on China Traditional Chinese Medicine Holdings Co stock, see the HK:0570 Stock Forecast page.

China Traditional Chinese Medicine Holdings Renews Key Agreements for 2026-2028

China Traditional Chinese Medicine Holdings Co. Limited has announced the renewal of three key agreements with Sinopharm Group Finance and CNPGC for the period from 2026 to 2028. These agreements include the Financial Services Framework Agreement, the Master Purchase Agreement, and the Master Supply Agreement, which involve financial services, material purchases, and product sales. The transactions are classified as continuing connected transactions under Hong Kong’s listing rules, requiring compliance with specific regulatory requirements. This renewal is expected to strengthen the company’s financial operations and supply chain, enhancing its market position and benefiting stakeholders.

The most recent analyst rating on (HK:0570) stock is a Sell with a HK$1.60 price target. To see the full list of analyst forecasts on China Traditional Chinese Medicine Holdings Co stock, see the HK:0570 Stock Forecast page.

China Traditional Chinese Medicine Holdings Renews Financial Services Agreement

China Traditional Chinese Medicine Holdings Co. Limited has entered into a New Financial Services (2025) Framework Agreement with Sinopharm Group Finance, effective from November 19, 2025, to December 31, 2025. This agreement, which includes deposit, loan, and other financial services, is designed to continue the financial relationship between the two entities. The agreement’s terms are similar to a previous arrangement set to expire, and it ensures that financial services are provided on favorable terms without requiring additional security from the company. The announcement highlights the company’s strategic financial planning and its implications for maintaining operational stability and compliance with listing rules.

The most recent analyst rating on (HK:0570) stock is a Sell with a HK$1.60 price target. To see the full list of analyst forecasts on China Traditional Chinese Medicine Holdings Co stock, see the HK:0570 Stock Forecast page.