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

• Market Cap: HK$427.54M
• Dividend Yield: 7.5%
• Average Volume (3M): 632.59K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.46
• 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$0.37 ▲(3.33% Upside)

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

Distribution network & omnichannel sales

A broad retail and online distribution footprint supports durable revenue reach and customer access across channels. This structural advantage helps sustain product availability, supports brand recognition in TCM, and lowers go-to-market costs versus peers, aiding long-term sales resilience.

Stable gross profit margins

Consistently stable gross margins indicate reliable production economics and pricing power for core formulations. This supports long-term margin sustainability even if revenue fluctuates, giving the company flexibility to invest in R&D, marketing and channel expansion without immediate margin erosion.

Manageable leverage and adequate equity ratio

Relatively low leverage and a reasonable equity ratio provide financial flexibility to fund capex, R&D or network expansion without excessive refinancing risk. This balance-sheet cushion supports sustained operations through industry cycles and reduces vulnerability to interest rate or liquidity shocks.

Negative Factors

Negative free cash flow growth

Declining free cash flow is a structural concern: it reduces the company's ability to self-fund operations, capex, and shareholder returns. Persistent negative FCF increases reliance on external financing, raising long-term funding costs and constraining strategic investments or recovery initiatives.

Weak net profitability and margin pressure

Low net margins and weak EBIT/EBITDA imply operational inefficiencies or elevated SG&A and other costs. Over time this undermines return on capital and limits reinvestment capacity. Unless structural cost improvements or higher-margin product mix emerges, profitability will remain constrained.

Volatile revenue growth and collapsing EPS

Large negative EPS growth and inconsistent top-line expansion signal volatility in demand and earnings power. This raises uncertainty about sustainable cash generation and investor returns. Structural recovery requires steadier revenue streams or material margin and efficiency improvements to restore earnings.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	745.30M	745.30M	783.88M	1.29B	1.39B	1.11B
Gross Profit	376.45M	376.45M	394.81M	609.54M	574.15M	448.26M
EBITDA	40.23M	122.72M	116.33M	115.88M	156.19M	-102.78M
Net Income	7.10M	7.10M	-15.36M	-20.52M	-108.91M	-376.00M
Balance Sheet
Total Assets	1.74B	1.74B	2.10B	7.01B	7.60B	7.96B
Cash, Cash Equivalents and Short-Term Investments	146.55M	146.55M	196.78M	625.01M	683.74M	688.93M
Total Debt	435.41M	435.41M	560.07M	1.76B	1.80B	1.77B
Total Liabilities	555.68M	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	88.04M	75.16M	157.04M	58.13M	90.14M	298.99M
Operating Cash Flow	115.20M	102.32M	191.69M	91.58M	116.18M	358.49M
Investing Cash Flow	231.81M	280.89M	-84.62M	15.06M	-15.91M	-81.78M
Financing Cash Flow	-384.56M	-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 below the 20-day moving average (MA) of 0.39, below the 50-day MA of 0.41, and below the 200-day MA of 0.37, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 37.65 is Neutral, neither overbought nor oversold. The STOCH value of 14.90 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$744.82M	10.50	9.75%	7.52%	-24.96%	-26.43%
3737	68 Neutral	HK$694.54M	28.90	1.87%	9.43%	-1.99%	-81.52%
0858	54 Neutral	HK$226.95M	-0.71	-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$427.54M	-28.86	-1.16%	7.50%	59.60%	-351.02%
0455	44 Neutral	HK$273.06M	-4.06	-13.08%	―	-19.28%	-42.27%
1498	41 Neutral	HK$184.55M	-3.69	-33.22%	―	-17.32%	55.74%

Wai Yuen Tong Medicine Holdings Limited Corporate Events

Wai Yuen Tong Reports Decline in Interim Financial Results

Wai Yuen Tong Medicine Holdings Limited reported a decline in its interim financial results for the six months ended September 30, 2025, with revenue decreasing by 6.9% and profit attributable to owners dropping by 88.2% compared to the same period in 2024. Despite the challenging financial performance, the company maintained a stable net asset value and slightly improved its gearing ratio, indicating a cautious approach to financial management amid market challenges.

The most recent analyst rating on (HK:0897) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on Wai Yuen Tong Medicine Holdings Limited stock, see the HK:0897 Stock Forecast page.

Wai Yuen Tong Issues Profit Warning Amid Market Challenges

Wai Yuen Tong Medicine Holdings Limited has issued a profit warning, indicating a significant decrease in profit for the six months ending September 2025. The expected decline from approximately HK$23.7 million to HK$3.0 million is attributed to weakened consumer sentiment, reduced net gains from property disposals, and lower net fair value gains on investment properties. Despite these challenges, the company managed to partially offset the impact through reduced administrative expenses and finance costs.

The most recent analyst rating on (HK:0897) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on Wai Yuen Tong Medicine Holdings Limited stock, see the HK:0897 Stock Forecast page.

Wai Yuen Tong Announces Board Meeting to Review Interim Results

Wai Yuen Tong Medicine Holdings Limited has announced a board meeting scheduled for November 24, 2025, to discuss and approve the interim results for the six months ending September 30, 2025, and to consider the payment of an interim dividend. This meeting is significant as it will provide insights into the company’s financial performance and potential shareholder returns, impacting its market positioning and stakeholder interests.

The most recent analyst rating on (HK:0897) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on Wai Yuen Tong Medicine Holdings Limited stock, see the HK:0897 Stock Forecast page.