Hua Medicine (2552) AI Stock Analysis

• Market Cap: $3.25B
• Dividend Yield: N/A
• Average Volume (3M): 6.34M
• Price to Earnings (P/E): 2.9
• Beta (1Y): 1.07
• Revenue Growth: 238.71%
• EPS Growth: N/A
• Country: HK
• Employees: 168
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 1.30
• Shares Outstanding: 1,056,605,000
• 10 Day Avg. Volume: 6,422,209
• 30 Day Avg. Volume: 6,335,350
• 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: 0.61
• Enterprise Value/Revenue: 5.35
• Enterprise Value/Gross Profit: 10.19
• Enterprise Value/Ebitda: -9.16
• 1Y Price Target: $6.92
• Price Target Upside: 113.65% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 49 Neutral
• Price Target: HK$3.00 ▼(-7.41% Downside)

Hua Medicine's overall stock score is primarily impacted by its financial performance and technical analysis. While the company shows strong revenue growth, significant challenges in profitability and cash flow management weigh heavily on the score. The technical indicators suggest bearish momentum, further impacting the stock's attractiveness. Valuation appears favorable with a low P/E ratio, but the lack of dividend yield limits appeal to certain investors.

Positive Factors

Revenue Growth

The strong revenue growth rate indicates positive sales momentum, suggesting that Hua Medicine's products are gaining traction in the market, which is crucial for long-term expansion and market presence.

Manageable Leverage

A moderate debt-to-equity ratio indicates that Hua Medicine has manageable leverage, which provides financial stability and flexibility to invest in growth opportunities without excessive financial risk.

Market Position in Diabetes Treatment

Hua Medicine's focus on diabetes, a growing global health issue, positions it well in a market with high demand for innovative treatments, supporting long-term growth potential.

Negative Factors

Profitability Challenges

Negative EBIT and EBITDA margins highlight operational inefficiencies, which could hinder Hua Medicine's ability to generate sustainable profits and reinvest in business growth.

Cash Flow Issues

Persistent negative cash flows suggest ongoing cash management challenges, which could limit Hua Medicine's ability to fund R&D and other strategic initiatives without external financing.

Operational Inefficiencies

Addressing operational inefficiencies is crucial for improving profitability and financial health, as these inefficiencies can erode margins and limit the company's competitive edge.

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 commercialization of its pharmaceutical products, particularly its lead candidate for type 2 diabetes. The company may also engage in collaborations and partnerships with other pharmaceutical companies, research institutions, and healthcare organizations to co-develop products or share research costs. These partnerships can provide additional funding through upfront payments, milestone payments based on development progress, and royalties on future sales. Furthermore, Hua Medicine may receive revenue from licensing agreements, where it licenses its technology or products to other firms for further development and marketing. Additionally, the company may explore public and private investments to fund its ongoing research and development efforts, contributing to its overall financial health.

Hua Medicine Financial Statement Overview

Summary

Hua Medicine shows strong revenue growth but faces significant profitability and cash flow challenges. The balance sheet is stable with manageable leverage, but operational inefficiencies need addressing to improve financial health.

Income Statement

Hua Medicine shows a strong revenue growth rate of 18.32% TTM, indicating positive sales momentum. However, the company faces significant profitability challenges with negative EBIT and EBITDA margins, suggesting operational inefficiencies. The net profit margin is positive due to a one-time gain, but core profitability remains weak.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.26 TTM, indicating manageable leverage. However, the return on equity is low, suggesting limited returns for shareholders. The equity ratio is healthy, but the company needs to improve profitability to enhance financial stability.

Cash Flow

Cash flow analysis reveals negative operating and free cash flows, indicating cash burn issues. The free cash flow to net income ratio is nearly 1, showing alignment between cash flow and accounting profits. However, negative free cash flow growth highlights ongoing cash management challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	370.66M	255.89M	76.61M	17.60M	0.00	8.66M
Gross Profit	194.78M	124.72M	37.37M	7.69M	0.00	8.66M
EBITDA	-216.67M	-345.36M	-167.09M	-168.06M	-309.69M	-347.43M
Net Income	1.08B	-250.14M	-211.23M	-203.77M	-330.95M	-396.43M
Balance Sheet
Total Assets	1.42B	1.53B	1.73B	1.12B	903.55M	1.20B
Cash, Cash Equivalents and Short-Term Investments	1.02B	1.14B	1.46B	490.63M	675.24M	1.03B
Total Debt	271.05M	300.18M	167.75M	97.58M	71.53M	80.72M
Total Liabilities	360.82M	1.66B	1.62B	841.92M	453.22M	466.03M
Stockholders Equity	1.06B	-135.47M	101.15M	279.58M	450.33M	732.50M
Cash Flow
Free Cash Flow	-274.64M	-421.83M	879.52M	-257.58M	-339.87M	-46.60M
Operating Cash Flow	-275.61M	-417.97M	889.37M	-230.11M	-272.98M	-20.91M
Investing Cash Flow	6.93M	10.04M	8.08M	-4.75M	-68.22M	-14.09M
Financing Cash Flow	-48.04M	83.72M	69.07M	21.48M	-6.13M	-7.26M

Hua Medicine Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.24
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 3.24 is below the 20-day moving average (MA) of 3.32, below the 50-day MA of 3.76, and above the 200-day MA of 3.04, indicating a neutral trend. The MACD of -0.14 indicates Negative momentum. The RSI at 42.69 is Neutral, neither overbought nor oversold. The STOCH value of 53.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2552.

Hua Medicine Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2877	73 Outperform	HK$6.66B	7.47	10.85%	6.05%	-20.64%	-25.39%
2348	72 Outperform	HK$1.80B	9.47	5.34%	5.43%	2.89%	-68.83%
2633	69 Neutral	HK$2.57B	8.89	12.97%	4.14%	-1.88%	17.57%
1061	64 Neutral	HK$2.44B	7.79	14.60%	3.04%	7.16%	19.19%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
2552	49 Neutral	$3.25B	2.86	206.86%	―	238.71%	―

Hua Medicine Corporate Events

Hua Medicine Reports Strong Growth in 2025

Hua Medicine, a pharmaceutical company based in the Cayman Islands, focuses on developing and commercializing innovative treatments for Type 2 diabetes, notably through its first-in-class glucokinase activator, HuaTangNing®. In the first half of 2025, Hua Medicine reported significant growth, with HuaTangNing® sales more than doubling compared to the previous year, leading to a 112% increase in revenue to RMB217.4 million. This growth was driven by the company’s transition to full self-commercialization after ending its exclusive promotion agreement with Bayer, which also resulted in a one-time income boost of RMB1,243.5 million. The company’s gross profit margin improved to 54.2%, reflecting enhanced production efficiency. Despite increased revenue, selling expenses rose only slightly, indicating effective cost management. Hua Medicine’s strategic initiatives included filing for dorzagliatin registration in Hong Kong and conducting extensive post-marketing studies to explore its long-term safety and effectiveness. Looking forward, Hua Medicine aims to sustain its growth trajectory by expanding its clinical pipeline and exploring new indications for its proprietary glucokinase modulation platform.

Hua Medicine Reports Strong Growth and Strategic Advancements in 2025 Interim Results

Hua Medicine announced a significant increase in sales and revenue for the first half of 2025, driven by the successful transition to self-commercialization of HuaTangNing. The company reported a 108% increase in HuaTangNing sales and a 112% rise in revenue, attributed to broader hospital coverage and inclusion in China’s National Reimbursement Drug List. The termination of an exclusive promotion agreement with Bayer allowed Hua Medicine to recognize substantial deferred income, bolstering its financial position. The company is also advancing post-marketing studies and expanding its product registration in Hong Kong, aiming to enhance its market footprint and explore new clinical insights into diabetes management.

The most recent analyst rating on (HK:2552) stock is a Hold with a HK$3.00 price target. To see the full list of analyst forecasts on Hua Medicine stock, see the HK:2552 Stock Forecast page.

Hua Medicine Schedules Board Meeting to Review Interim Results

Hua Medicine has announced that its board of directors will meet on August 28, 2025, to consider and approve the interim results for the first half of the year ending June 30, 2025. This meeting is significant as it will determine the company’s financial performance and potentially impact its market positioning and stakeholder confidence.