Dawnrays Pharmaceutical Holdings Ltd. (2348) AI Stock Analysis

• Market Cap: HK$1.80B
• Dividend Yield: 5.16%
• Average Volume (3M): 355.07K
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.34
• Revenue Growth: 2.89%
• EPS Growth: -68.83%
• Country: HK
• Employees: 1,183
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.07
• Shares Outstanding: 1,503,357,000
• 10 Day Avg. Volume: 239,600
• 30 Day Avg. Volume: 355,066
• PEG Ratio: 0.04
• Price to Book (P/B): 0.52
• Price to Sales (P/S): 1.63
• P/FCF Ratio: 38.71
• 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: 72 Outperform
• Price Target: HK$1.50 ▲(25.00% Upside)

The overall stock score reflects strong financial health and attractive valuation, offset by declining revenue and cash flow challenges. Technical indicators suggest a neutral to slightly bearish outlook, but the low P/E ratio and high dividend yield provide a solid investment case.

Positive Factors

Strong Profit Margins

High gross profit margins indicate efficient cost management, allowing the company to maintain profitability even in challenging revenue environments.

Solid Balance Sheet

Minimal reliance on external debt and a high equity ratio provide financial stability and flexibility, supporting long-term growth and resilience.

Diversified Revenue Streams

Diversified revenue streams from prescription drugs, OTC products, and APIs reduce dependency on any single market, enhancing business stability.

Negative Factors

Declining Revenue

A decline in revenue growth can indicate challenges in market demand or competitive pressures, potentially impacting future profitability and market position.

Weakened Cash Flow

Reduced cash flow generation can strain liquidity, limiting the company's ability to invest in growth opportunities or weather economic downturns.

Earnings Decline

A significant decline in earnings per share suggests reduced profitability, which may affect investor confidence and the company's ability to reinvest in its operations.

Dawnrays Pharmaceutical Holdings Ltd. Business Overview & Revenue Model

Company Description

Dawnrays Pharmaceutical (Holdings) Limited, an investment holding company, develops, manufactures, and sells non-patented pharmaceutical medicines in Mainland China and internationally. It operates in two segments, Intermediates and Bulk Medicines, and Finished Drugs. The company offers antibiotics, including pharmaceutical intermediates, bulk medicines, powder for injections, and oral antibiotics. It also provides and system specific medicines comprising cardiovascular systems; anti-allergic, anti-HBV, and digestive systems; urinary systems; and anti-pyretic analgesic, respiratory, and endocrine system drugs in the form of tablets, capsules, and granules. The company was founded in 1995 and is headquartered in Wan Chai, Hong Kong. Dawnrays Pharmaceutical (Holdings) Limited is a subsidiary of Fortune United Group Limited.

How the Company Makes Money

Dawnrays Pharmaceutical Holdings Ltd. generates revenue through multiple streams, including the sale of prescription medications and OTC products. The company benefits from a diversified product portfolio, which allows it to cater to various market segments and respond to healthcare demands effectively. Additionally, revenue is bolstered by the production and sale of APIs to other pharmaceutical manufacturers. Strategic partnerships with healthcare providers, distributors, and research institutions enhance its market reach and operational capabilities, contributing to its earnings. Furthermore, the company invests in research and development to innovate and expand its product offerings, which can lead to new revenue opportunities.

Dawnrays Pharmaceutical Holdings Ltd. Financial Statement Overview

Summary

Dawnrays Pharmaceutical Holdings Ltd. demonstrates strong profitability with high net profit and EBIT margins. The balance sheet is robust with low debt and high equity ratio. However, declining revenues and weakened cash flow generation pose challenges.

Income Statement

The company shows strong gross profit margins consistently above 50%, indicating efficient cost management. However, revenue has decreased from the previous year, showing a negative growth rate of -7.89%. The net profit margin improved to 53.28% in 2024, reflecting a strong bottom line. EBIT and EBITDA margins are also robust, indicating healthy operational profitability despite revenue decline.

Balance Sheet

The balance sheet is strong with a low debt-to-equity ratio of 0.01, showcasing minimal reliance on external debt. The equity ratio remains high at 82.93%, indicating stable equity financing. Return on equity improved to 16.99%, reflecting effective utilization of shareholder funds. Overall, the company maintains a solid financial position with significant equity backing and low debt levels.

Cash Flow

The free cash flow growth rate is negative, indicating a decline in cash generation capacity. Operating cash flow to net income and free cash flow to net income ratios could not be evaluated due to zero operating cash flow reported in 2024. The cash flow position appears to be weakened, potentially impacting liquidity if not addressed.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.11B	1.06B	1.15B	1.28B	1.17B	1.02B
Gross Profit	509.46M	577.63M	641.52M	766.68M	675.36M	545.55M
EBITDA	226.47M	280.49M	498.94M	505.19M	433.89M	395.71M
Net Income	176.47M	564.94M	326.00M	358.06M	358.18M	268.13M
Balance Sheet
Total Assets	3.88B	4.01B	3.62B	3.67B	3.34B	2.90B
Cash, Cash Equivalents and Short-Term Investments	1.62B	1.37B	1.07B	993.04M	830.22M	932.11M
Total Debt	9.16M	34.72M	120.53M	8.41M	23.52M	2.95M
Total Liabilities	579.69M	682.61M	763.42M	1.02B	941.70M	720.14M
Stockholders Equity	3.30B	3.32B	2.85B	2.64B	2.38B	2.17B
Cash Flow
Free Cash Flow	195.90M	44.58M	126.39M	229.90M	80.07M	163.80M
Operating Cash Flow	250.73M	220.20M	338.40M	434.27M	393.14M	302.90M
Investing Cash Flow	-263.09M	205.17M	-387.57M	-175.01M	-284.20M	26.45M
Financing Cash Flow	-285.41M	-189.44M	2.07M	-92.70M	-129.75M	-327.70M

Dawnrays Pharmaceutical Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.20
• 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:2348, the sentiment is Negative. The current price of 1.2 is below the 20-day moving average (MA) of 1.21, below the 50-day MA of 1.20, and above the 200-day MA of 1.20, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 43.19 is Neutral, neither overbought nor oversold. The STOCH value of 11.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2348.

Dawnrays Pharmaceutical Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2877	73 Outperform	HK$7.07B	7.93	10.85%	5.80%	-20.64%	-25.39%
2348	72 Outperform	HK$1.80B	9.47	5.34%	5.16%	2.89%	-68.83%
1681	72 Outperform	HK$13.78B	12.86	25.92%	3.93%	19.05%	13.68%
2633	69 Neutral	HK$2.43B	8.43	12.97%	15.40%	-1.88%	17.57%
0570	54 Neutral	HK$11.08B	-38.38	-1.26%	3.66%	-9.58%	-128.83%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
0460	43 Neutral	HK$12.60B	-142.11	-1.87%	0.87%	19.21%	-115.91%