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

• Market Cap: HK$399.41M
• Dividend Yield: 7.5%
• Average Volume (3M): 632.59K
• Price to Earnings (P/E): 43.6
• Beta (1Y): 0.13
• 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$0.32 ▼(-10.28% 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 margins point to durable production and procurement efficiency in the core Chinese-medicine product mix. That stability helps preserve top-line profitability through input cost swings, supports consistent unit economics across retail and distribution channels, and gives management room to address SG&A without immediate margin erosion.

Manageable leverage

Relatively low debt levels provide financial flexibility for a consumer healthcare retailer/distributor to fund store investment, inventory, or strategic initiatives without large interest burdens. Manageable leverage reduces refinancing risk in downturns and preserves capacity for M&A or capex to support longer-term growth priorities.

Diversified retail and distribution model

Operating both consumer-facing retail stores and wholesale/distribution channels creates multiple durable revenue streams and distribution control. Retail supports brand, margin capture and consumer data; distribution scales product reach and smooths demand swings. This structural mix eases single-channel concentration risks over time.

Negative Factors

Weak cash generation

Negative free cash flow growth and a low operating cash flow to net income ratio indicate persistent difficulty converting earnings into spendable cash. Over months this constrains capital expenditure, inventory financing and dividend sustainability, and may force external funding or slower strategic execution if not remedied.

Low net margins and weak operating profitability

Low net profit and weak EBIT/EBITDA margins signal structural cost or pricing issues across operations. Persistent margin weakness limits retained earnings for reinvestment, reduces returns to shareholders and makes the business more sensitive to input cost inflation or competitive price pressure unless management improves cost structure or raises prices sustainably.

Inconsistent revenue growth

Volatile revenue trends undermine forecasting and operational planning for retail and distribution. Inconsistent top-line performance can reflect dependence on episodic product demand or uneven store execution, making it harder to scale margins and justify fixed cost investments, and increasing execution risk over the next several quarters.

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 makes money primarily by selling products and services tied to Chinese medicine and healthcare through (1) retail and (2) distribution/trading channels. (1) Retail sales: The group generates revenue from sales to consumers in its self-operated retail network, selling Chinese herbal medicines, proprietary Chinese medicines, health supplements and other wellness/healthcare products. Revenue is recognized at the point of sale, with gross profit driven by product mix, retail pricing, procurement costs, and store operating efficiency. (2) Trading and distribution: The group also earns revenue by supplying Chinese medicine and healthcare products through wholesale/trading arrangements, where income comes from the margin between procurement/manufacturing costs (where applicable) and selling prices to downstream customers. Additional revenue drivers commonly associated with this model—such as providing Chinese medicine consultation services in-store, developing house brands, or leveraging e-commerce/online sales—are null because specific confirmation and relative contribution are not available here. Information on material partnerships, major customer concentration, and segment-level revenue/profit contributions is null.

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: Negative
• RSI: Neutral
• STOCH: Neutral

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 0.34, above the 50-day MA of 0.35, and below the 200-day MA of 0.37, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 44.31 is Neutral, neither overbought nor oversold. The STOCH value of 47.78 is Neutral, 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	4.94	9.88%	7.52%	-24.96%	-26.43%
3737	68 Neutral	HK$770.77M	20.07	1.87%	9.43%	-1.99%	-81.52%
0858	54 Neutral	HK$196.35M	-0.15	-30.35%	―	-11.89%	-290.48%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
0897	46 Neutral	HK$399.41M	43.63	-1.17%	7.50%	59.60%	-351.02%
0455	44 Neutral	HK$212.85M	-3.16	-11.18%	―	-19.28%	-42.27%
1498	41 Neutral	HK$168.51M	-2.22	-36.23%	―	-17.32%	55.74%

Wai Yuen Tong Medicine Holdings Limited Corporate Events

Wai Yuen Tong Tightens Nomination Committee Mandate to Bolster Governance and Board Diversity

Wai Yuen Tong Medicine Holdings has amended and restated the terms of reference for its nomination committee, effective 16 March 2026, to align with Hong Kong Listing Rules, the Corporate Governance Code and applicable laws. The committee must comprise at least three directors with a majority of independent non-executive directors, include at least one director of a different gender, and be chaired by the board chairman or an independent non-executive director.

The updated charter clarifies meeting procedures, quorum, and frequency, and formalizes the committee’s authority to seek information, invite management, and obtain independent professional advice at the company’s expense. It also reinforces the committee’s role in annually reviewing board structure, skills, and diversity, maintaining a board skills matrix, and identifying and recommending suitably qualified candidates for directorships, underscoring a stronger focus on board effectiveness and diversity in the group’s governance.

The most recent analyst rating on (HK:0897) stock is a Hold with a HK$0.34 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.