China Medical System Holdings (0867) AI Stock Analysis

• Market Cap: HK$31.71B
• Dividend Yield: 2.26%
• Average Volume (3M): 6.44M
• Price to Earnings (P/E): 7.0
• Beta (1Y): 0.84
• Revenue Growth: 11.78%
• EPS Growth: 19.06%
• Country: HK
• Employees: 6,141
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.44
• Shares Outstanding: 2,439,528,600
• 10 Day Avg. Volume: 4,711,227
• 30 Day Avg. Volume: 6,437,247
• PEG Ratio: -0.34
• Price to Book (P/B): 1.06
• Price to Sales (P/S): 2.30
• P/FCF Ratio: 21.18
• 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$17.34
• Price Target Upside: 22.14% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 0.8
• Revenue Forecast (FY): HK$9.72B

• Rating: 66 Neutral
• Price Target: HK$16.50 ▲(16.20% Upside)
• Action: Reiterated Date: 02/03/26
• Date: Action: Reiterated 02/03/26

The score is primarily supported by a strong, low-leverage balance sheet, but is held back by declining revenue/profitability and weaker operating cash flow. Technicals show an established uptrend, yet overbought signals increase near-term risk. Valuation is moderate, with a modest dividend yield providing limited downside support.

Positive Factors

Balance sheet strength

Low leverage and a high equity ratio provide durable financial flexibility, allowing the company to fund product lifecycle investments, M&A or withstand reimbursement pressure. This stability supports long-term operations and reduces refinancing or solvency risk over the next 2–6 months.

Commercialization & distribution capabilities

Direct sales presence across hospital and retail channels plus life-cycle management expertise gives structural competitive advantage in China. This durable commercial footprint supports market access for new in-licensed products and helps sustain revenue capture and margin conversion over time.

Strong gross & EBITDA margins

Sustained gross margins and decent EBITDA margins indicate underlying product profitability and cost control, enabling reinvestment in R&D and commercialization. Combined with a robust free-cash-flow-to-net-income ratio, the company retains cash conversion capability despite revenue weakness.

Negative Factors

Declining revenue and profitability

Two consecutive years of revenue decline and lower net margins signal weakening demand or portfolio challenges. This erosion reduces scale economics and limits internal funding for development and market expansion, posing a sustained headwind to earnings recovery absent new product wins.

Operating cash flow deterioration

Significantly lower operating cash flow undermines the firm's ability to fund capex, acquisitions or working capital from operations. Even with solid FCF-to-net-income ratios, falling absolute cash generation constrains strategic flexibility and increases reliance on balance sheet buffers.

Reliance on in-licensing and acquisitions

A growth model dependent on in-licensing and acquisitions is capital intensive and exposes the company to deal execution, integration and royalty dilution risks. Long-term success requires consistent deal flow and integration capability, which can be uneven and strain margins if outcomes disappoint.

China Medical System Holdings Business Overview & Revenue Model

Company Description

China Medical System Holdings Limited, an investment holding company, manufactures, sells, markets, and promotes pharmaceutical products in the People's Republic of China. The company's products include Plendil for the treatment of hypertension and stable angina pectoris; XinHuoSu for the treatment of acute heart failure; Deanxit for the treating mild-to-moderate depression, anxiety, and psychosomatic affections; Ursofalk for the treatment of cholesterol gallstones in the gallbladder, cholestatic liver disease, and biliary reflux gastritis; Salofalk for treating Ulcerative Colitis and Crohn's disease; Bioflor for the treatment of diarrhea; Combizym for dyspepsia; Augentropfen Stulln Mono eye drops to treat senile macula degeneration and asthenopia; and Hirudoid for blunt traumata with or without hematomas and superficial phlebitis insofar. Its products also comprise DanShenTong capsules for treating acne, tonsillitis, otitis externa, boils, carbuncle, traumatic infection, burn infection, mastitis, cellulitis, osteomyelitis, etc.; XiDaKang, a protein hydrolysate oral solution; YiNuoShu for treating respiratory diseases; Ganfule capsules for the treatment of primary cancer of the liver; Imdur for the treatment of coronary heart disease, chronic heart failure, and myocardial infarction, as well as for prevention of vasospasm and mixed angina; and Parlodel tablets for the endocrine and neuro system indications. In addition, the company also offers Elcatonin injection for osteoporosis; YinlianQinggan granules for treating acute hepatitis A and chronic hepatitis B; Lamisil tablets for treating fungal infections on skin and hair; and MOVICOL for treating chronic constipation and faecal impaction. In addition, it is involved in the agriculture and livestock activities. The company was founded in 1995 and is headquartered in North Point, Hong Kong. China Medical System Holdings Limited is a subsidiary of Treasure Sea Limited.

How the Company Makes Money

China Medical System generates revenue through multiple streams, primarily from the sale of its pharmaceutical products, which include both prescription and over-the-counter medications. The company benefits from a diverse product portfolio that allows it to cater to various therapeutic areas, driving sales growth. Furthermore, partnerships with international pharmaceutical companies enable the company to access new markets and innovative products, contributing to its revenue. Additionally, the company may engage in licensing agreements, where it receives royalties or upfront payments for the rights to distribute certain drugs, further enhancing its earnings. Overall, the combination of a robust product lineup, strategic collaborations, and effective market penetration strategies underpins China Medical System's revenue generation.

China Medical System Holdings Financial Statement Overview

Summary

Balance sheet strength (low leverage, high equity ratio) supports resilience, but recent income trends show declining revenue and profitability, and cash flow has weakened versus prior years despite still-solid cash generation relative to net income.

Income Statement

The company has shown a declining trend in revenue from 2022 to 2024, with revenue decreasing by approximately 8.4% in 2023 and 6.8% in 2024. Gross profit margins remain strong, indicating effective cost management. However, the net profit margin in 2024 is lower than in previous years, reflecting a decrease in profitability. The lack of EBIT in 2024 is a concern, though EBITDA margins remain decent, showing continued operational efficiency.

Balance Sheet

The balance sheet is strong with a substantial equity base and a low debt-to-equity ratio, indicating low leverage risk. The equity ratio is high, showcasing financial stability. The high return on equity indicates effective use of equity to generate profits, although it has been decreasing over the years, signaling a need for improvement in generating returns.

Cash Flow

Operating cash flow has decreased significantly from previous years, which is a concern. The free cash flow to net income ratio remains robust, indicating healthy cash generation relative to net income. However, the free cash flow has also declined in 2024 compared to 2022, suggesting potential challenges in future cash availability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.86B	7.47B	8.01B	9.15B	8.34B	6.95B
Gross Profit	5.62B	5.42B	6.11B	7.04B	6.25B	5.13B
EBITDA	2.30B	2.31B	2.92B	3.76B	3.70B	3.05B
Net Income	1.65B	1.62B	2.40B	3.26B	3.02B	2.53B
Balance Sheet
Total Assets	18.94B	18.05B	17.73B	17.75B	15.81B	12.70B
Cash, Cash Equivalents and Short-Term Investments	5.97B	5.87B	6.14B	5.87B	4.36B	2.67B
Total Debt	747.60M	860.74M	1.30B	1.81B	1.71B	600.16M
Total Liabilities	1.77B	1.64B	2.17B	3.02B	2.96B	1.60B
Stockholders Equity	17.02B	16.31B	15.52B	14.59B	12.75B	11.03B
Cash Flow
Free Cash Flow	493.64M	812.64M	2.18B	3.03B	2.31B	2.35B
Operating Cash Flow	952.52M	1.27B	2.50B	3.55B	2.49B	2.69B
Investing Cash Flow	-439.01M	-615.10M	-442.28M	-1.18B	-1.52B	-353.82M
Financing Cash Flow	-983.08M	-1.26B	-2.13B	-1.40B	-258.39M	-1.03B

China Medical System Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0867, the sentiment is Negative. The current price of 14.2 is below the 20-day moving average (MA) of 14.65, above the 50-day MA of 14.09, and above the 200-day MA of 13.19, indicating a bearish trend. The MACD of -0.21 indicates Positive momentum. The RSI at 33.90 is Neutral, neither overbought nor oversold. The STOCH value of 8.83 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0867.

China Medical System Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0512	73 Outperform	HK$25.52B	6.53	12.65%	3.13%	10.56%	-13.58%
1513	72 Outperform	HK$30.74B	14.75	14.91%	4.09%	-0.45%	9.00%
3320	68 Neutral	HK$27.64B	3.54	5.90%	2.95%	―	―
0867	66 Neutral	HK$31.71B	7.03	10.01%	2.26%	11.78%	19.06%
3933	64 Neutral	HK$25.06B	3.29	21.02%	5.11%	0.39%	4.94%
0874	61 Neutral	HK$43.72B	8.53	7.86%	7.15%	1.13%	-13.53%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

China Medical System Holdings Corporate Events

China Medical System Wins NMPA Approval to Begin Trials of New Complement Factor B Inhibitor for Kidney Diseases

China Medical System Holdings has received approval from China’s National Medical Products Administration to begin clinical trials in healthy participants for its self-developed innovative drug CMS-D017, a novel small-molecule inhibitor of complement factor B aimed at treating complement-mediated kidney diseases. CMS-D017 has shown strong preclinical efficacy and safety and is being developed for a range of complement-driven conditions, including IgA nephropathy, idiopathic membranous nephropathy, lupus nephritis, C3 glomerulopathy and previously-approved indications such as paroxysmal nocturnal hemoglobinuria, with future plans to target age-related macular degeneration and myasthenia gravis. The company expects CMS-D017 to address significant unmet needs in kidney disease where current steroid and immunosuppressant therapies are limited, and, once marketed, the drug is expected to create strong synergies with existing kidney-related products Velphoro and Desidustat, strengthening the group’s competitive position and market reach in nephrology.

The most recent analyst rating on (HK:0867) stock is a Hold with a HK$14.50 price target. To see the full list of analyst forecasts on China Medical System Holdings stock, see the HK:0867 Stock Forecast page.

China Medical System Wins NMPA Nod to Start Trials of Novel Oral PNH Drug CMS-D017

China Medical System Holdings has received approval from China’s National Medical Products Administration to begin clinical trials in healthy participants for CMS-D017, a self-developed, orally administered, small-molecule inhibitor of complement factor B intended to treat paroxysmal nocturnal hemoglobinuria (PNH). By selectively targeting the alternative complement pathway upstream and inhibiting C3 convertase formation, CMS-D017 is designed to address both intravascular and extravascular hemolysis while potentially lowering infection risk compared with existing C5 inhibitors that require intravenous or subcutaneous administration. The company expects that, once approved for marketing, CMS-D017 will significantly strengthen its nephrology franchise and create strong synergies with its existing and pipeline kidney-disease drugs, boosting its competitiveness and market position, while it accelerates preparations to launch the product following completion of clinical development.

The most recent analyst rating on (HK:0867) stock is a Hold with a HK$14.00 price target. To see the full list of analyst forecasts on China Medical System Holdings stock, see the HK:0867 Stock Forecast page.

China Medical System Wins China’s First Targeted Vitiligo Drug Approval

China Medical System Holdings announced that its dermatology-focused subsidiary Dermavon has received approval from China’s National Medical Products Administration for ruxolitinib phosphate cream to treat non-segmental vitiligo with facial involvement in patients aged 12 and above, making it the first and only targeted therapy for vitiligo approved in the country. The product, already marketed overseas as Opzelura for vitiligo and certain atopic dermatitis indications, addresses a major unmet need among an estimated 8.2 million non-segmental vitiligo patients in China, where existing treatments such as topical corticosteroids and calcineurin inhibitors have significant limitations.

Before full approval, the cream had already been used under special pilot access policies in Hainan’s Lecheng Pilot Zone and certain free trade zones, with more than 7,000 Chinese patients treated and prescriptions available at over 20 hospitals in major cities. Clinical data from two Phase III overseas trials and real-world Chinese studies showed significantly higher repigmentation rates versus placebo, sustained benefit with longer use, and no new safety issues, positioning the drug as a landmark addition to vitiligo care and strengthening Dermavon’s skin treatment portfolio as it moves toward a separate market listing.

The most recent analyst rating on (HK:0867) stock is a Hold with a HK$14.50 price target. To see the full list of analyst forecasts on China Medical System Holdings stock, see the HK:0867 Stock Forecast page.

China Medical System’s Breakthrough in Vitiligo Treatment with Povorcitinib

China Medical System Holdings announced that its subsidiary, Dermavon Holdings, has obtained licensing rights for the innovative oral JAK 1 inhibitor, povorcitinib, which has been included in China’s list of Breakthrough Therapeutic Drugs. This inclusion is expected to accelerate the drug’s development and review process, potentially offering a new treatment option for non-segmental vitiligo patients in China. The drug is currently in Phase 3 clinical trials for various skin conditions outside China and has shown promising results in improving skin repigmentation. If approved, povorcitinib could enhance Dermavon’s product portfolio and provide comprehensive treatment options for vitiligo patients.

The most recent analyst rating on (HK:0867) stock is a Hold with a HK$14.50 price target. To see the full list of analyst forecasts on China Medical System Holdings stock, see the HK:0867 Stock Forecast page.

China Medical System’s Innovative Stroke Treatment Gains Regulatory Acceptance

China Medical System Holdings Limited announced that its New Drug Application for Y-3 for Injection, a Class 1 innovative drug for treating acute ischemic stroke, has been accepted by China’s National Medical Products Administration. This drug, noted as the world’s first brain cytoprotectant targeting PSD-95-nNOS and MPO, shows promise in improving treatment outcomes for stroke patients and potentially preventing post-stroke depression and anxiety. The Phase III clinical trial in China demonstrated significant clinical benefits and a favorable safety profile, indicating broad market prospects given the high incidence of stroke in China.

The most recent analyst rating on (HK:0867) stock is a Hold with a HK$14.50 price target. To see the full list of analyst forecasts on China Medical System Holdings stock, see the HK:0867 Stock Forecast page.