Charmacy Pharmaceutical Co., Ltd. Class H (2289) AI Stock Analysis

• Market Cap: HK$626.40M
• Dividend Yield: 8.03%
• Average Volume (3M): 283.00
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.34
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: HK
• Employees: 847
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Distribution
• EPS (TTM): 0.22
• Shares Outstanding: 108,000,000
• 10 Day Avg. Volume: 100
• 30 Day Avg. Volume: 283
• PEG Ratio: 8.95
• Price to Book (P/B): 1.61
• Price to Sales (P/S): 0.22
• P/FCF Ratio: 11.01
• 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: 60 Neutral
• Price Target: HK$6.00 ▼(-17.92% Downside)

The score is primarily held back by financial fundamentals—especially high leverage and thin margins—despite a 2024 cash flow rebound. Technicals are supportive with a clear uptrend, but overbought signals add near-term risk. Valuation is helped by a moderate P/E and a high dividend yield.

Charmacy Pharmaceutical Co., Ltd. Class H Business Overview & Revenue Model

Company Description

Charmacy Pharmaceutical Co., Ltd. engages in the trading of pharmaceutical products in the People's Republic of China. The company offers western medicines, Chinese patent medicines, healthcare products, and related consulting services to downstream distributors and terminal chemists. It also operates Charmacy e-Medicine, a B2B e-commerce platform to place orders online and make inquiries and payments. The company was formerly known as Chuangmei Pharmaceutical Co., Ltd. and changed its name to Charmacy Pharmaceutical Co., Ltd. in July 2016. Charmacy Pharmaceutical Co., Ltd. was incorporated in 1984 and is headquartered in Shantou, the People's Republic of China.

How the Company Makes Money

Charmacy Pharmaceutical Co., Ltd. Class H Financial Statement Overview

Summary

Income statement is mixed with flat revenue and thin profitability (gross margin ~7.3%, net margin ~1.2%) despite improved operating profit versus 2023. Balance sheet is a key weakness due to high leverage (debt-to-equity ~2.74x) and ROE (~8.6%) trending down from 2022. Cash flow improved in 2024 with positive operating and free cash flow, but consistency remains unproven after the 2023 weakness.

Income Statement

Revenue has been broadly flat over the last two years (2024 down ~1% after modest growth in 2023), while profitability remains thin: gross margin is ~7.3% and net margin ~1.2% in 2024. Operating profit improved versus 2023 (higher EBIT and EBITDA), but earnings are still below the stronger 2022 level, indicating mixed momentum and limited pricing power typical of distribution businesses.

Balance Sheet

Leverage is a clear constraint: debt-to-equity is high at ~2.74x in 2024 (and consistently elevated historically), which reduces financial flexibility. Return on equity is moderate (~8.6% in 2024) but has trended down materially from 2022, suggesting profitability is not strong enough to comfortably offset the balance-sheet risk.

Cash Flow

Cash generation rebounded in 2024 with positive operating cash flow (~106M) and positive free cash flow (~90M) after negative results in 2023, showing improved working-capital/cash discipline. However, free cash flow growth is sharply negative versus the prior year (reflecting the swing from negative to positive) and cash flow remains relatively small versus the scale of the business, so consistency is not yet proven.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.24B	4.44B	4.40B	4.18B	3.79B	3.99B
Gross Profit	320.54M	324.76M	292.74M	268.61M	234.12M	237.40M
EBITDA	153.32M	155.71M	136.92M	121.03M	107.55M	111.03M
Net Income	48.28M	53.28M	51.34M	90.47M	23.15M	40.56M
Balance Sheet
Total Assets	3.49B	3.46B	3.25B	2.87B	2.76B	2.80B
Cash, Cash Equivalents and Short-Term Investments	509.97M	563.15M	644.76M	503.81M	641.76M	602.02M
Total Debt	1.05B	1.70B	1.37B	1.19B	1.33B	1.25B
Total Liabilities	2.90B	2.84B	2.65B	2.27B	2.26B	2.30B
Stockholders Equity	591.83M	618.69M	597.81M	594.48M	504.10M	502.55M
Cash Flow
Free Cash Flow	274.87M	90.31M	-137.39M	35.46M	-44.58M	79.10M
Operating Cash Flow	280.72M	106.04M	-96.54M	44.05M	-19.54M	131.08M
Investing Cash Flow	-5.82M	-15.64M	39.34M	71.76M	-24.40M	-54.78M
Financing Cash Flow	-233.69M	-31.54M	101.26M	-191.21M	74.40M	-2.68M

Charmacy Pharmaceutical Co., Ltd. Class H Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2192	74 Outperform	HK$7.54B	21.39	6.77%	2.72%	29.81%	10.40%
1931	69 Neutral	HK$2.37B	12.59	5.07%	3.81%	0.33%	-44.28%
2289	60 Neutral	HK$626.40M	12.01	8.12%	8.03%	―	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
9955	40 Underperform	HK$566.22M	-0.51	-69.05%	―	-43.86%	-217.25%

Charmacy Pharmaceutical Co., Ltd. Class H Corporate Events

Charmacy Pharmaceutical Approves Key Resolutions at EGM

Charmacy Pharmaceutical Co., Ltd. held an Extraordinary General Meeting on December 12, 2025, where all proposed resolutions were approved by shareholders. Key decisions included the approval of a new framework loan agreement with Jiangyao Group Co., Ltd., the appointment of Pan-China Certified Public Accountants LLP as the company’s auditors, and the abolishment of the Board of Supervisors. These changes are expected to streamline the company’s governance structure and potentially enhance its financial operations.

Charmacy Pharmaceutical Announces EGM to Discuss Key Resolutions

Charmacy Pharmaceutical Co., Ltd. has announced an extraordinary general meeting (EGM) scheduled for December 12, 2025, to discuss several key resolutions. These include a new framework loan agreement with Jiangyao Group Co., Ltd., the appointment of Pan-China Certified Public Accountants LLP as auditors, and proposed amendments to the company’s articles of association. These resolutions, if approved, could impact the company’s financial arrangements and governance structure, potentially influencing its market positioning and operational efficiency.

Charmacy Pharmaceutical Proposes Auditor Change to Pan-China

Charmacy Pharmaceutical Co., Ltd. announced a proposed change of auditors due to the approaching end of ShineWing’s service term, in compliance with the Administrative Measures for Selection and Appointment of Accounting Firms. ShineWing, the current auditor since 2017, will resign following the upcoming extraordinary general meeting. The company has proposed appointing Pan-China Certified Public Accountants LLP as the new auditor, subject to shareholder approval. The Board and Audit Committee believe Pan-China’s industry experience and technical competence align with the company’s audit requirements, ensuring no compromise in audit standards or effectiveness.