Wai Yuen Tong Medicine Holdings Limited (0897) AI Stock Analysis

• Market Cap: HK$382.53M
• Dividend Yield: 7.5%
• Average Volume (3M): 632.59K
• Price to Earnings (P/E): 43.6
• Beta (1Y): 0.42
• Revenue Growth: 59.60%
• EPS Growth: -351.02%
• Country: HK
• Employees: 817
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): <0.01
• Shares Outstanding: 1,125,102,900
• 10 Day Avg. Volume: 746,291
• 30 Day Avg. Volume: 632,591
• PEG Ratio: -0.38
• Price to Book (P/B): 0.34
• Price to Sales (P/S): 0.54
• P/FCF Ratio: 5.39
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 46 Neutral
• Price Target: HK$0.33 ▼(-7.50% Downside)
• Action: Reiterated Date: 11/21/25
• Date: Action: Reiterated 11/21/25

The overall stock score reflects a combination of mixed financial performance and technical indicators, along with a high valuation. The company's stable gross profit margins and manageable leverage are offset by challenges in profitability and cash flow management. Technical analysis suggests a neutral to bearish outlook, and the high P/E ratio indicates potential overvaluation, despite an attractive dividend yield.

Positive Factors

Stable gross profit margins

Stable gross profit margins indicate persistent efficiency in product procurement and production across retail and distribution. That durability helps protect underlying profitability against input cost swings and supports gross cash generation capacity, aiding long-term margin resilience even if operating costs vary.

Manageable leverage

Relatively low leverage gives the company financial flexibility to fund store openings, inventory or product development without excessive interest burden. This lowers default risk, preserves capacity for strategic investments, and supports balance sheet resilience over the next several quarters.

Retail + distribution business model

A dual-channel model (self-operated retail plus trading/distribution) creates diversified revenue streams and direct customer access. It supports scale benefits, brand control in stores, and wholesale margins, making the business more resilient to single-channel shocks and supporting steady structural demand for Chinese medicine products.

Negative Factors

Negative free cash flow

Negative free cash flow signals the company struggles to convert earnings into cash, constraining its ability to fund capex, pay dividends consistently, or build cash buffers. Over multiple quarters this pressures liquidity and forces reliance on external financing or asset sales, increasing execution risk.

Weak profitability margins

Low net and operating margins reflect operational inefficiencies or high fixed costs that erode earnings despite stable gross margins. Persistently weak margins limit retained earnings, depress ROE and reduce ability to reinvest profitably, hampering sustainable earnings growth and shareholder returns.

Volatile revenue growth

Inconsistent revenue performance undermines forecasting and investment planning; while recent growth was strong, historical volatility suggests demand or execution sensitivity. This unpredictability increases risk for capacity decisions, inventory management and long-term margin improvement initiatives.

Wai Yuen Tong Medicine Holdings Limited Business Overview & Revenue Model

Company Description

Wai Yuen Tong Medicine Holdings Limited, an investment holding company, manufactures, processes, and retails traditional Chinese medicines, Western pharmaceutical products, and health food and personal products in Hong Kong, Mainland China, Macau, and internationally. The company offers Chinese medicines and health food products under the Wai Yuen Tong brand name; and Western pharmaceutical and personal care products under the Madame Pearl's and Pearl's brands. It also engages in the investment, holding, and selling of properties; provision of financial services; and agricultural produce exchange market operation. As of March 31, 2022, the company operated 63 retail stores in Hong Kong. The company was founded in 1897 and is headquartered in Kowloon Bay, Hong Kong. Wai Yuen Tong Medicine Holdings Limited is a subsidiary of Rich Time Strategy Limited.

How the Company Makes Money

Wai Yuen Tong Medicine Holdings Limited generates revenue primarily through the sale of its traditional Chinese medicine products and health supplements. The company has established a strong distribution network, including retail outlets and online platforms, which allows it to reach a broad customer base. Key revenue streams include the sale of proprietary herbal formulations, dietary supplements, and wellness products. Additionally, the company benefits from partnerships with various healthcare providers and distributors, enhancing its market presence and driving sales. The increasing consumer trend towards health and wellness, coupled with Wai Yuen Tong's focus on quality and effective marketing strategies, contributes significantly to its earnings.

Wai Yuen Tong Medicine Holdings Limited Financial Statement Overview

Summary

The company exhibits a mixed financial performance. While gross profit margins are stable and leverage is manageable, challenges exist with profitability and cash flow management. Revenue growth is inconsistent, and operational inefficiencies impact margins.

Income Statement

The company shows a mixed performance in its income statement. The gross profit margin is stable, indicating efficient production, but the net profit margin is low, suggesting challenges in managing expenses. Revenue growth is volatile, with a significant increase in the latest period, but historical fluctuations raise concerns about sustainability. EBIT and EBITDA margins are weak, reflecting operational inefficiencies.

Balance Sheet

The balance sheet reflects moderate financial stability. The debt-to-equity ratio is relatively low, indicating manageable leverage. However, return on equity is minimal, suggesting limited profitability from shareholder investments. The equity ratio is adequate, showing a reasonable proportion of assets financed by equity.

Cash Flow

Cash flow analysis reveals potential liquidity issues. Free cash flow growth is negative, indicating declining cash generation. The operating cash flow to net income ratio is low, suggesting challenges in converting income into cash. The free cash flow to net income ratio is moderate, but overall cash flow management needs improvement.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	721.27M	745.30M	783.88M	1.29B	1.39B	1.11B
Gross Profit	359.73M	376.45M	394.81M	609.54M	574.15M	448.26M
EBITDA	90.23M	122.72M	116.33M	115.88M	156.19M	-102.78M
Net Income	-13.83M	7.10M	-15.36M	-20.52M	-108.91M	-376.00M
Balance Sheet
Total Assets	1.69B	1.74B	2.10B	7.01B	7.60B	7.96B
Cash, Cash Equivalents and Short-Term Investments	135.68M	146.55M	196.78M	625.01M	683.74M	688.93M
Total Debt	301.48M	435.41M	560.07M	1.76B	1.80B	1.77B
Total Liabilities	508.14M	555.68M	709.65M	3.33B	3.64B	4.01B
Stockholders Equity	1.18B	1.18B	1.39B	2.35B	2.52B	2.57B
Cash Flow
Free Cash Flow	107.95M	75.16M	157.04M	58.13M	90.14M	298.99M
Operating Cash Flow	129.03M	102.32M	191.69M	91.58M	116.18M	358.49M
Investing Cash Flow	-1.78M	280.89M	-84.62M	15.06M	-15.91M	-81.78M
Financing Cash Flow	-107.01M	-405.69M	-469.97M	-67.25M	-115.27M	-266.48M

Wai Yuen Tong Medicine Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.36
• 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:0897, the sentiment is Negative. The current price of 0.36 is above the 20-day moving average (MA) of 0.35, below the 50-day MA of 0.36, and below the 200-day MA of 0.37, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 43.17 is Neutral, neither overbought nor oversold. The STOCH value of >-0.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0897.

Wai Yuen Tong Medicine Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0239	74 Outperform	HK$754.17M	4.94	9.75%	7.52%	-24.96%	-26.43%
3737	68 Neutral	HK$643.72M	20.07	1.87%	9.43%	-1.99%	-81.52%
0858	54 Neutral	HK$198.90M	-0.15	-32.04%	―	-11.89%	-290.48%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
0897	46 Neutral	HK$382.53M	43.63	-1.16%	7.50%	59.60%	-351.02%
0455	44 Neutral	HK$215.00M	-3.19	-13.08%	―	-19.28%	-42.27%
1498	41 Neutral	HK$168.51M	-2.22	-33.22%	―	-17.32%	55.74%