Hua Medicine (2552) AI Stock Analysis

• Market Cap: $4.07B
• Dividend Yield: N/A
• Average Volume (3M): 10.31M
• Price to Earnings (P/E): 3.6
• Beta (1Y): 0.97
• Revenue Growth: 238.71%
• EPS Growth: N/A
• Country: HK
• Employees: 168
• Sector: Healthcare
• Sector Strength: 47
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 1.30
• Shares Outstanding: 1,056,213,700
• 10 Day Avg. Volume: 17,285,278
• 30 Day Avg. Volume: 10,314,579
• PEG Ratio: -0.39
• Price to Book (P/B): -9.93
• Price to Sales (P/S): 5.26
• P/FCF Ratio: -3.19
• Enterprise Value/Market Cap: 0.49
• Enterprise Value/Revenue: 7.75
• Enterprise Value/Gross Profit: 15.91
• Enterprise Value/Ebitda: -5.75
• 1Y Price Target: $4.98
• Price Target Upside: 16.69% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 65 Neutral
• Price Target: HK$5.00 ▲(17.10% Upside)

The overall stock score is driven by a strong valuation, suggesting potential undervaluation, and positive technical indicators indicating bullish momentum. However, significant financial performance challenges, including profitability and balance sheet concerns, weigh heavily on the score.

Hua Medicine Business Overview & Revenue Model

Company Description

Hua Medicine (Shanghai) Ltd. operates as a clinical-stage drug development company that focuses on therapies for the treatment of diabetes in China. It develops Dorzagliatin or HMS5552, an oral drug for the treatment of Type 2 Diabetes (T2D); and Dorzagliatin in combination with Metformin, Sitagliptin, and Empagliflozin that is in Phase I clinical trial for treatment of T2D. The company also offers Dorzagliatin in combination with Pioglitazone for NASH; in combination with GLP-1 for Alzheimer diseases; and in combination with late stage T2D and Type 1 Diabetes. In addition, it is developing mGLUR5 for the treatment of Parkinson's disease levodopa-induced dyskinesia. The company was incorporated in 2011 and is based in Beijing, China.

How the Company Makes Money

Hua Medicine generates revenue primarily through the development and commercialization of its proprietary drug, dorzagliatin. The company's revenue model is centered around bringing this drug to market, achieving regulatory approvals, and forming strategic partnerships with other pharmaceutical companies for distribution and marketing. Additionally, Hua Medicine may engage in licensing agreements, allowing other companies to utilize its research and development outcomes, thus providing additional income streams. These partnerships and collaborations are significant contributors to its earnings, as they help the company expand its market reach and leverage shared resources.

Hua Medicine Financial Statement Overview

Summary

Hua Medicine faces significant challenges with profitability and financial stability. Despite revenue growth in 2024, ongoing losses and a weak balance sheet pose substantial risks. Cash flow fluctuations further add to the uncertainty, necessitating strategic financial improvements for long-term sustainability.

Income Statement

The company shows volatile revenue growth with a significant increase in 2024. However, profitability remains a concern due to persistent negative net income and EBIT margins. The gross profit margin improved, indicating better cost management, but overall profitability is weak.

Balance Sheet

The balance sheet reveals high leverage with negative stockholders' equity, indicating financial instability. The debt-to-equity ratio is not calculable due to negative equity, and the equity ratio is negative, highlighting the company's financial distress.

Cash Flow

Cash flow analysis shows fluctuations, with free cash flow turning negative in 2024 despite positive operating cash flow in 2023. The operating cash flow to net income ratio is not favorable due to negative net income, raising concerns about cash generation sustainability.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	255.89M	76.61M	17.60M	0.00	8.66M
Gross Profit	124.72M	37.37M	7.69M	0.00	8.66M
EBITDA	-345.36M	-167.09M	-168.06M	-309.69M	-347.43M
Net Income	-250.14M	-211.23M	-203.77M	-330.95M	-396.43M
Balance Sheet
Total Assets	1.53B	1.73B	1.12B	903.55M	1.20B
Cash, Cash Equivalents and Short-Term Investments	1.14B	1.46B	490.63M	675.24M	1.03B
Total Debt	300.18M	167.75M	97.58M	71.53M	80.72M
Total Liabilities	1.66B	1.62B	841.92M	453.22M	466.03M
Stockholders Equity	-135.47M	101.15M	279.58M	450.33M	732.50M
Cash Flow
Free Cash Flow	-421.83M	879.52M	-257.58M	-339.87M	-46.60M
Operating Cash Flow	-417.97M	889.37M	-230.11M	-272.98M	-20.91M
Investing Cash Flow	10.04M	8.08M	-4.75M	-68.22M	-14.09M
Financing Cash Flow	83.72M	69.07M	21.48M	-6.13M	-7.26M

Hua Medicine Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.27
• 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:2552, the sentiment is Positive. The current price of 4.27 is above the 20-day moving average (MA) of 3.86, above the 50-day MA of 3.67, and above the 200-day MA of 2.45, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 61.60 is Neutral, neither overbought nor oversold. The STOCH value of 61.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2552.

Hua Medicine Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2877	74 Outperform	HK$6.68B	7.49	10.85%	5.75%	-20.64%	-25.39%
2348	73 Outperform	HK$1.85B	9.71	5.34%	6.12%	2.89%	-68.83%
2633	73 Outperform	HK$2.81B	9.77	12.47%	4.08%	7.43%	21.88%
1061	71 Outperform	HK$3.14B	10.03	14.60%	2.35%	7.16%	19.19%
1558	65 Neutral		―		―	-42.02%	-76.29%
2552	65 Neutral	$4.07B	3.64	206.86%	―	238.71%	―
Sector *	51 Neutral	$7.92B	-0.36	-43.38%	2.24%	22.38%	-2.16%

Hua Medicine Corporate Events

Hua Medicine Reports Significant Profit Turnaround in H1 2025

Hua Medicine announced a significant turnaround in its financial performance for the first half of 2025, reporting an expected profit of RMB1,184.1 million compared to a loss in the same period in 2024. This improvement is attributed to the termination of an agreement with Bayer, leading to a release of contract liabilities, and successful commercialization efforts for HuaTangNing, resulting in a 111.8% increase in sales and improved gross profit margins.

Hua Medicine Secures Shareholder Approval for Key Resolutions at AGM

Hua Medicine announced the successful passing of all resolutions at its Annual General Meeting held on June 26, 2025. Key resolutions included the re-election of directors, reappointment of auditors, and granting of mandates for share repurchase and issuance. These decisions reflect strong shareholder support and are expected to enhance the company’s governance and operational flexibility.

Hua Medicine Announces Board Restructuring to Enhance Governance

Hua Medicine has announced changes to its board of directors, effective June 25, 2025. The new board structure includes executive, non-executive, and independent non-executive directors, with specific roles assigned in various committees such as audit, remuneration, nomination, and strategy. This restructuring is expected to enhance the company’s governance and strategic decision-making capabilities, potentially impacting its market positioning and stakeholder relations positively.

Hua Medicine Announces Resignation of Non-Executive Director

Hua Medicine announced the resignation of Dr. Fangxin Li as a non-executive director and a member of the Remuneration Committee, effective June 25, 2025, due to personal work arrangements. The company expressed gratitude for Dr. Li’s contributions, and his departure is not expected to impact the company’s operations or shareholder interests.