Modern Chinese Medicine Group Co. Ltd. (1643) AI Stock Analysis

• Market Cap: HK$525.60M
• Dividend Yield: N/A
• Average Volume (3M): 639.13K
• Price to Earnings (P/E): 21.3
• Beta (1Y): 0.41
• Revenue Growth: -15.96%
• EPS Growth: 32.95%
• Country: HK
• Employees: 190
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - General
• EPS (TTM): <0.01
• Shares Outstanding: 720,000,000
• 10 Day Avg. Volume: 382,100
• 30 Day Avg. Volume: 639,133
• PEG Ratio: -0.27
• Price to Book (P/B): 0.44
• Price to Sales (P/S): 0.99
• P/FCF Ratio: -3.82
• 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: 53 Neutral
• Price Target: HK$0.75 ▲(47.25% Upside)

The score is held back primarily by weakening profitability and especially the zero operating/free cash flow in 2024 despite a strong, low-debt balance sheet. Technicals are supportive with the price above major moving averages, but momentum looks stretched (high RSI/Stoch). Valuation appears moderate based on the P/E ratio.

Positive Factors

Strong balance sheet / low leverage

An equity ratio near 90% and negligible debt provide a durable financial buffer, enabling the company to fund R&D, support product rollouts, and withstand revenue volatility without immediate refinancing. This structural strength reduces bankruptcy risk and preserves strategic optionality.

Diversified revenue channels

Multiple sales channels—retail, e-commerce and healthcare partnerships—lessen single-channel concentration risk and support resilient revenue collection. Over the medium term, channel diversity helps sustain sales, aids geographic expansion, and underpins recurring partner-driven demand.

Integrated scientific and traditional TCM approach

Combining modern R&D with traditional Chinese medicine creates a defensible product differentiation and credibility with regulators and healthcare partners. This structural positioning supports new product development, licensing potential, and long-term brand strength in the wellness market.

Negative Factors

Sustained revenue decline

A multi-year top-line contraction erodes scale benefits and pricing leverage, making it harder to absorb fixed costs and fund growth initiatives. Continued revenue decline undermines long-term competitiveness, reduces bargaining power with distributors, and pressures margins and reinvestment capacity.

Significant margin compression

Large declines in gross and net margins indicate structural cost or pricing pressures that weaken profitability sustainability. Margin erosion reduces retained earnings and ROE (which fell sharply), constraining funds for R&D, marketing, and expansion unless operational improvements or price adjustments occur.

Zero operating and free cash flow in 2024

A lack of operating and free cash flow is a critical structural concern: the business may be unable to self-fund capex, working capital or dividends. Even with low debt, persistent zero cash generation increases reliance on external financing and limits strategic flexibility over months to years.

Modern Chinese Medicine Group Co. Ltd. Business Overview & Revenue Model

Company Description

Modern Chinese Medicine Group Co., Ltd., an investment holding company, produces and sells proprietary Chinese medicines for elderlies and aged-middle in the People's Republic of China. It offers therapeutics for the qi-deficiency and blood-statis, cardio-cerebrovascular, digestive and gastrointestinal, gynecological, respiratory system, and nervous system conditions. The company was founded in 1986 and is headquartered in Chengde, China. Modern Chinese Medicine Group Co., Ltd. is a subsidiary of Modern Biotechnology Group Holdings Co., Ltd.

How the Company Makes Money

The company generates revenue primarily through the sale of its herbal products and supplements, which are marketed both domestically and internationally. Key revenue streams include direct sales through retail outlets, online e-commerce platforms, and partnerships with healthcare providers and wellness centers. Additionally, Modern Chinese Medicine Group Co. Ltd. may benefit from collaborations with research institutions for the development of new products, which can also create licensing opportunities. Seasonal promotions, educational workshops on traditional Chinese medicine, and customized wellness programs further enhance its revenue potential.

Modern Chinese Medicine Group Co. Ltd. Financial Statement Overview

Summary

Overall fundamentals are pressured: revenue and margins have declined materially (net margin down to 4.5% in 2024). While the balance sheet is strong with very low leverage (high equity ratio), operating and free cash flow were zero in 2024, raising major concerns about cash generation and liquidity from operations.

Income Statement

The income statement shows a declining revenue trend over the past few years, with total revenue dropping significantly from 2022 to 2024. Gross Profit Margin decreased from 42.7% in 2022 to 25.8% in 2024, and Net Profit Margin also shrank from 22.0% to 4.5% over the same period. The company has faced challenges maintaining profitability as indicated by the reducing EBIT and EBITDA margins.

Balance Sheet

The balance sheet is strong with a high equity ratio of 89.6% in 2024, reflecting financial stability and low leverage. The Debt-to-Equity Ratio is negligible, indicating minimal reliance on debt. Return on Equity dropped to 2.0% in 2024 from 20.8% in 2022, suggesting declining profitability relative to shareholders' equity.

Cash Flow

The cash flow statement reveals significant challenges. Operating Cash Flow has been zero in 2024, indicating potential liquidity issues. Free Cash Flow has also been zero for 2024, reflecting poor cash generation from operations. The Free Cash Flow to Net Income Ratio is not calculable due to zero Free Cash Flow, highlighting a critical area of concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	202.20M	214.07M	344.07M	399.66M	360.69M	308.69M
Gross Profit	49.68M	55.20M	104.17M	170.79M	158.43M	136.86M
EBITDA	29.30M	29.82M	74.75M	130.03M	117.02M	106.19M
Net Income	18.98M	9.67M	48.80M	87.83M	81.78M	63.58M
Balance Sheet
Total Assets	532.65M	540.31M	528.53M	501.53M	395.94M	209.26M
Cash, Cash Equivalents and Short-Term Investments	283.25M	229.67M	286.27M	282.26M	176.09M	73.19M
Total Debt	138.00K	135.00K	72.00K	393.00K	410.00K	5.54M
Total Liabilities	47.13M	56.08M	55.64M	78.60M	58.58M	74.43M
Stockholders Equity	485.52M	484.23M	472.89M	422.93M	337.36M	134.83M
Cash Flow
Free Cash Flow	-7.64M	-55.32M	3.38M	114.06M	-12.87M	47.31M
Operating Cash Flow	-7.69M	58.98M	8.48M	125.79M	57.60M	47.92M
Investing Cash Flow	-765.50K	-115.49M	-4.19M	-11.05M	-70.05M	-611.29K
Financing Cash Flow	0.00	-144.00K	-326.00K	-8.73M	115.76M	-5.40M

Modern Chinese Medicine Group Co. Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1643, the sentiment is Positive. The current price of 0.51 is below the 20-day moving average (MA) of 0.68, below the 50-day MA of 0.62, and below the 200-day MA of 0.58, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 60.89 is Neutral, neither overbought nor oversold. The STOCH value of 57.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1643.

Modern Chinese Medicine Group Co. Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1763	74 Outperform	HK$7.01B	15.29	8.59%	2.76%	13.59%	6.31%
2877	73 Outperform	HK$7.15B	8.01	10.85%	5.80%	-20.64%	-25.39%
1643	53 Neutral	HK$525.60M	21.28	3.98%	―	-15.96%	32.95%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
1652	49 Neutral	HK$536.71M	-2.85	-40.38%	―	-43.46%	-96.48%
2325	46 Neutral	HK$565.34M	-0.69	-47.91%	2.15%	-18.98%	-164.82%
2160	43 Neutral	HK$5.03B	359.09	0.22%	―	-4.38%	―

Modern Chinese Medicine Group Co. Ltd. Corporate Events

Modern Chinese Medicine Group to Acquire 30% Stake in HK$41.8 Million Major Transaction

Modern Chinese Medicine Group Co., Ltd. has entered into a sale and purchase agreement to acquire a 30% stake in a target group for HK$41.82 million in cash, a price based on an independent valuation using a market approach. The deal qualifies as a major transaction under Hong Kong listing rules, triggering reporting, announcement, circular and shareholder approval requirements, though no physical general meeting will be held as controlling shareholder Modern Biotechnology Group Holdings Co., Ltd., which owns about 55.83% of the company, has provided written approval. A circular detailing the transaction is expected to be dispatched to shareholders by 9 February 2026, and completion remains conditional on due diligence and other precedent conditions, meaning the acquisition may or may not proceed; investors are urged to exercise caution when dealing in the shares.

The most recent analyst rating on (HK:1643) stock is a Hold with a HK$0.69 price target. To see the full list of analyst forecasts on Modern Chinese Medicine Group Co. Ltd. stock, see the HK:1643 Stock Forecast page.

Modern Chinese Medicine Clarifies 60 Million-Share Option Scheme Capacity in 2024 Report

Modern Chinese Medicine Group Co. Ltd. has clarified details of its share option scheme in relation to its 2024 annual report, confirming that up to 60 million shares, equivalent to 10% of its issued share capital as at the report date, are available for issuance under the scheme and any other share schemes combined. The share option scheme, which became effective in January 2021 before updated listing rule requirements took effect, allows options to be exercised for up to 10 years and gives the board discretion to impose vesting periods on a case-by-case basis; to date, no options have been granted, meaning the full 60 million-share mandate remains available, potentially providing the company with future flexibility in employee incentives and capital management without any immediate dilution for existing shareholders.

The most recent analyst rating on (HK:1643) stock is a Hold with a HK$0.67 price target. To see the full list of analyst forecasts on Modern Chinese Medicine Group Co. Ltd. stock, see the HK:1643 Stock Forecast page.