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Shanghai Pharmaceuticals Holding Co Ltd Class H (HK:2607)
:2607

Shanghai Pharmaceuticals Holding Co (2607) AI Stock Analysis

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HK:2607

Shanghai Pharmaceuticals Holding Co

(2607)

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Neutral 64 (OpenAI - 5.2)
Rating:64Neutral
Price Target:
HK$12.50
â–²(4.95% Upside)
Action:DowngradedDate:01/22/26
The score is driven primarily by mid-range financial performance, weighed down by weak cash conversion and rising leverage despite steady revenue growth. Valuation is a notable positive with a low P/E and a moderate dividend yield, while technical indicators are neutral-to-slightly positive.
Positive Factors
Market position & distribution network
A nationwide distribution footprint and deep hospital/pharmacy relationships create durable revenue access and scale advantages. Over 2–6 months this supports stable order flow, negotiating leverage with suppliers, and resilience versus regional competitors when rolling out new products or partnerships.
Diversified business segments
Multiple business lines (manufacturing, distribution, hospitals, retail pharmacies) lower single-segment risk and enable cross-selling of medicines and services. This structural diversification supports steadier revenues and allows reallocation of capital to higher-return segments over time.
Consistent revenue growth
Sustained top-line growth indicates continued market demand and successful commercial execution. Over the medium term, steady revenue expansion provides a base for margin recovery initiatives and R&D investment, improving long-term competitiveness despite current margin pressure.
Negative Factors
Weak cash conversion
Persistent low operating cash conversion signals working-capital intensity and earnings that don’t convert to liquid funds. This structurally limits the company’s ability to self-fund capex, M&A or dividends and raises reliance on external financing over a multi-quarter horizon.
Rising leverage
An upward leverage trend reduces financial flexibility and increases sensitivity to interest-rate or funding shocks. For a working-capital intensive distributor, higher debt magnifies cash-flow stress during seasonal swings or slower collections, constraining long-term strategic options.
Structurally thin margins
Low and compressing margins reflect the distribution-heavy model and pricing pressure. Persistently thin profitability limits internal reinvestment, heightens reliance on volume growth for earnings improvement, and makes returns vulnerable to cost inflation or competitive discounting.

Shanghai Pharmaceuticals Holding Co (2607) vs. iShares MSCI Hong Kong ETF (EWH)

Shanghai Pharmaceuticals Holding Co Business Overview & Revenue Model

Company DescriptionShanghai Pharmaceuticals Holding Co., Ltd., an investment holding company, researches, develops, manufactures, distributes, and retails pharmaceutical and healthcare products in the People's Republic of China. It operates through four segments: Production, Distribution, Retail, and Others. The company offers chemicals and biochemicals, Chinese medicines, healthcare products, and medical devices in various therapeutic areas, including oncology, cerebrocardiovascular, CNS, general infection, immunology, digestive and metabolism, and respiratory. It provides approximately 700 varieties of drugs. The company also engages in the provision of pharmaceutical distribution, warehousing, logistics, and other value-added pharmaceutical supply chain solutions and related services to pharmaceutical manufacturers and dispensers, such as hospitals, distributors, and retail pharmacies. In addition, it engages in the operation of a network of retail pharmacy stores; online drug business; and provision of consulting services, assets management operations, as well as clinical trials, medical aid, physicians and patients' education, e-prescription management, and remote and cloud hospitals. Further, the company manufactures and trades in medicines. It operates approximately 2,000 retail chain pharmacies in 24 provinces. The company was incorporated in 1994 and is headquartered in Shanghai, the People's Republic of China. Shanghai Pharmaceuticals Holding Co., Ltd. is a subsidiary of Shanghai Pharmaceutical (Group) Co., Ltd.
How the Company Makes MoneyShanghai Pharmaceuticals generates revenue through multiple key streams. The pharmaceutical manufacturing segment contributes significantly by producing and selling a diverse array of prescription drugs, generics, and over-the-counter products. The distribution segment also plays a crucial role, as the company supplies drugs to hospitals, pharmacies, and healthcare facilities across China. Moreover, the company's healthcare services, including hospital operations and pharmacy retail, provide additional income. Significant partnerships with international pharmaceutical firms for co-development and distribution agreements further bolster its earnings, allowing access to new markets and product lines. The company's robust distribution network and strategic collaborations enhance its market presence and revenue potential.

Shanghai Pharmaceuticals Holding Co Financial Statement Overview

Summary
Steady revenue growth and positive profitability, but margins are thin and have compressed over time. Balance sheet is workable yet leverage has risen into TTM (debt-to-equity up to ~0.81). Cash flow is the key weakness: operating cash flow is consistently very low relative to net income, and free cash flow covers only ~57% of TTM net income.
Income Statement
62
Positive
Revenue has grown steadily (2020–2024), and TTM (Trailing-Twelve-Months) shows a modest uptick versus 2024. However, profitability is thin and has generally weakened over time: gross margin has drifted down (about 14% in 2020 to ~10–11% in TTM/2024), and net margin remains low (~1.6% in 2024; ~2.0% in TTM). Net income improved in TTM versus 2024, but overall earnings quality is constrained by the structurally low margin profile of distribution and recent margin compression.
Balance Sheet
64
Positive
The balance sheet looks serviceable with equity growing alongside assets, and returns on equity are positive (mid-to-high single digits in recent periods, including TTM). Leverage is moderate but trending higher: debt-to-equity moved from ~0.58 (2022) to ~0.67 (2024) and ~0.81 in TTM (Trailing-Twelve-Months). This rising leverage reduces flexibility and raises sensitivity to working-capital swings and funding conditions, even though the company is not yet highly leveraged on this measure.
Cash Flow
48
Neutral
Free cash flow is positive across periods and shows a strong TTM (Trailing-Twelve-Months) increase versus 2024 (high growth rate). That said, cash conversion is a key weakness: operating cash flow is very low relative to net income in every period provided (low single-digit coverage), which suggests earnings are not consistently turning into operating cash—often a sign of working-capital intensity in distribution. Free cash flow covers only about ~57% of TTM net income (similar in 2024), indicating cash generation is less robust than profits would imply.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue280.67B275.25B260.30B231.98B215.82B191.91B
Gross Profit29.87B30.63B30.93B30.49B28.54B27.44B
EBITDA8.72B12.06B10.90B12.44B10.55B10.44B
Net Income5.65B4.55B3.77B5.62B5.09B4.50B
Balance Sheet
Total Assets236.74B221.21B211.97B198.13B163.44B149.19B
Cash, Cash Equivalents and Short-Term Investments44.55B44.38B40.67B37.01B22.39B22.30B
Total Debt61.60B47.79B42.90B38.56B31.69B31.79B
Total Liabilities147.12B137.47B131.65B120.13B104.37B94.44B
Stockholders Equity75.78B71.68B68.52B67.06B49.36B45.35B
Cash Flow
Free Cash Flow3.41B3.43B2.26B2.06B942.55M3.83B
Operating Cash Flow2.56B5.83B5.23B4.74B5.06B6.84B
Investing Cash Flow-813.47M415.98M-2.49B-12.47B-6.02B-1.71B
Financing Cash Flow-2.64B-1.86B231.85M12.14B1.57B-1.26B

Shanghai Pharmaceuticals Holding Co Technical Analysis

Technical Analysis Sentiment
Negative
Last Price11.91
Price Trends
50DMA
11.74
Negative
100DMA
11.79
Negative
200DMA
11.86
Negative
Market Momentum
MACD
-0.12
Positive
RSI
40.65
Neutral
STOCH
47.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2607, the sentiment is Negative. The current price of 11.91 is above the 20-day moving average (MA) of 11.61, above the 50-day MA of 11.74, and above the 200-day MA of 11.86, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 40.65 is Neutral, neither overbought nor oversold. The STOCH value of 47.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2607.

Shanghai Pharmaceuticals Holding Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
HK$66.91B3.788.54%3.75%-2.68%-21.45%
66
Neutral
HK$1.91B20.844.85%3.81%0.33%-44.28%
64
Neutral
HK$65.23B15.137.64%2.67%2.77%39.24%
60
Neutral
HK$626.40M7.997.98%8.03%――
51
Neutral
$7.86B-0.30-43.30%2.27%22.53%-2.21%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:2607
Shanghai Pharmaceuticals Holding Co
11.50
-0.04
-0.33%
HK:1099
Sinopharm Group Co
21.44
2.54
13.42%
HK:1931
IVD Medical Holding Limited
1.18
-0.58
-32.95%
HK:2289
Charmacy Pharmaceutical Co., Ltd. Class H
5.80
-1.48
-20.33%

Shanghai Pharmaceuticals Holding Co Corporate Events

Shanghai Pharmaceuticals Boosts Stake in Finance Unit to 40% After Completing Connected Transaction
Jan 13, 2026

Shanghai Pharmaceuticals Holding Co., Ltd. has completed a connected transaction to acquire an additional 10% equity stake in its affiliated finance company from SIIC Dongtan, raising its ownership in the finance entity to 40%. The completion of this acquisition, executed on the previously disclosed terms of the share transfer agreement, is expected to further consolidate Shanghai Pharmaceuticals’ control over its in-house financial services platform, potentially enhancing capital management efficiency and internal financing support for the group’s broader pharmaceutical operations, while also formalizing the transaction from a corporate governance and related-party perspective.

The most recent analyst rating on (HK:2607) stock is a Hold with a HK$12.50 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Confirms 2026 Sales and Procurement Framework with Yunnan Baiyao
Dec 31, 2025

Shanghai Pharmaceuticals Holding Co., Ltd., a leading Chinese pharmaceutical manufacturer and distributor, focuses on the production and sale of a broad range of medicines and healthcare products for hospitals, pharmacies and other healthcare institutions in China and abroad. The company operates across the pharmaceutical value chain, leveraging its scale and network to support a diversified portfolio of drug products and related services.

The company has formally executed its 2026 Sales and Procurement Framework Agreement with Yunnan Baiyao, effective for the full year from 1 January to 31 December 2026, on terms consistent with those previously disclosed. The confirmation of this continuing connected transaction secures a defined framework for mutual sales and procurement between the two pharmaceutical groups for 2026, providing visibility over future business volumes and reinforcing Shanghai Pharmaceuticals’ commercial ties with a key sector partner, while the company states that all other previously announced information related to the arrangement remains unchanged.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.00 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Confirms Completion of Equity Adjustment Without Change in Control
Dec 30, 2025

Shanghai Pharmaceuticals announced the completion of an equity adjustment involving the transfer of the entire equity interest in Shanghai Industrial Investment (Holdings) Co. (SIIC) from its de facto controller, Shanghai SASAC, to Golden Bell, confirming that the transaction does not alter the company’s controlling shareholder structure or the identity of its ultimate controller. Following the completion of the adjustment and the latest share purchase plan, SIIC and its subsidiaries now hold 498,588,000 A and H shares, representing 13.45% of the company’s issued share capital, signalling a consolidated but stable ownership position that preserves governance continuity for investors and other stakeholders.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.00 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Renews 2026 Supply Framework with Major Shareholder Yunnan Baiyao
Dec 29, 2025

Shanghai Pharmaceuticals Holding has secured board approval to renew its sales and procurement framework arrangement with substantial shareholder Yunnan Baiyao for another year, setting up a 2026 framework under which the two groups will continue to trade a broad range of medicines, medical devices, healthcare products, food products, and TCM-related items. Although the 2026 framework agreement is not yet executed, it will run from 1 January to 31 December 2026 and allows members of both groups to sign individual implementation contracts within annual caps, with the transactions classified as continuing connected transactions under Hong Kong listing rules, triggering reporting, annual review, and announcement obligations but exempting the company from circular and independent shareholders’ approval requirements.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.00 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Announces Interim Dividend for 2025
Dec 10, 2025

Shanghai Pharmaceuticals Holding Co., Ltd. has announced an interim cash dividend of RMB 1.2 per 10 shares for the six months ending June 30, 2025, with an ex-dividend date of December 29, 2025. This announcement reflects the company’s ongoing commitment to shareholder returns and may influence its market positioning by highlighting its financial health and strategic focus on rewarding investors.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.00 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Strengthens Audit Committee Governance
Dec 9, 2025

Shanghai Pharmaceuticals Holding Co., Ltd. has established implementation rules for its Audit Committee to strengthen the decision-making function of its Board of Directors and ensure effective supervision over management. The Audit Committee is tasked with overseeing the relationship with external auditors, reviewing financial information, and supervising the company’s financial reporting, risk management, and internal control systems. This move is expected to enhance the company’s corporate governance and ensure diligent financial oversight.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.00 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Announces Key Changes at Extraordinary General Meeting
Dec 9, 2025

Shanghai Pharmaceuticals Holding Co., Ltd. held its second extraordinary general meeting of 2025, where key resolutions were passed, including the abolishment of the Supervisory Board and amendments to the Articles of Association. The meeting, which adhered to the legal requirements of the People’s Republic of China, saw significant shareholder participation, with a high percentage of votes in favor of the proposed changes, indicating strong support for the company’s strategic direction.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.00 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Announces Interim Dividend for 2025
Dec 9, 2025

Shanghai Pharmaceuticals Holding Co., Ltd. announced an interim dividend of RMB 1.2 per 10 shares for the six months ending June 30, 2025, with payment to be made in Hong Kong dollars. The announcement includes details on withholding tax rates applicable to various shareholder categories, impacting both enterprise and individual non-resident shareholders. This move reflects the company’s ongoing commitment to shareholder returns and may influence investor sentiment positively.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.00 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Announces Extraordinary General Meeting
Nov 28, 2025

Shanghai Pharmaceuticals Holding Co., Ltd. has announced the convening of an Extraordinary General Meeting on December 9, 2025, due to insufficient shareholder voting shares to meet the required threshold. This meeting will address key matters as outlined in the company’s notice and circular, potentially impacting the company’s governance and strategic decisions.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.00 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Announces Interim Dividend for 2025
Nov 18, 2025

Shanghai Pharmaceuticals Holding Co., Ltd. has announced an interim cash dividend of RMB 1.2 per 10 shares for the six months ending June 30, 2025. This update includes the date for shareholders’ approval set for December 9, 2025, but other details such as the payment date and exchange rate remain to be announced, reflecting the company’s ongoing commitment to shareholder returns.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.00 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Announces EGM to Revamp Governance Structure
Nov 18, 2025

Shanghai Pharmaceuticals Holding Co., Ltd. has announced an Extraordinary General Meeting (EGM) scheduled for December 9, 2025, to discuss significant changes including the abolishment of the Supervisory Board and amendments to the Articles of Association. These proposals, if approved, could streamline the company’s governance structure and potentially impact its operational efficiency and shareholder engagement.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.00 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Proposes Governance Restructuring
Nov 6, 2025

Shanghai Pharmaceuticals Holding Co., Ltd. announced proposed amendments to its Articles of Association and the abolishment of its Supervisory Board, replacing it with an audit committee. These changes align with recent revisions in Chinese corporate and securities laws, aiming to streamline governance and enhance operational efficiency. The amendments are expected to impact the company’s governance structure, potentially influencing its market positioning and stakeholder relations.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.00 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Renews Procurement Agreement with Wing Fat Printing
Oct 30, 2025

Shanghai Pharmaceuticals Holding Co., Ltd. announced the renewal of its Procurement Framework Agreement with Wing Fat Printing, effective from January 1, 2026, to December 31, 2026. This agreement allows Wing Fat Group to continue supplying printed packaging materials for pharmaceutical products, ensuring the stability of Shanghai Pharmaceuticals’ operations and meeting future demand. The transactions are classified as continuing connected transactions under the Listing Rules, subject to specific reporting and review requirements but exempt from circular and independent shareholders’ approval. The annual cap for these transactions is set at RMB90,000,000, based on estimated future demand and historical procurement amounts. The agreement is expected to benefit the company by reducing administrative costs and maintaining business stability.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.50 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Releases 2025 Q3 Report Emphasizing Transparency
Oct 30, 2025

Shanghai Pharmaceuticals Holding Co., Ltd. has released its third quarterly report for 2025, prepared in accordance with PRC Accounting Standards for Business Enterprises. The report, which has not been audited, emphasizes the company’s commitment to transparency and accuracy in its financial disclosures, as affirmed by its board of directors and senior management. This announcement underscores the company’s adherence to regulatory requirements and its ongoing efforts to maintain trust with stakeholders.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.50 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Announces 2025 Interim Profit Distribution Plan
Oct 30, 2025

Shanghai Pharmaceuticals Holding Co., Ltd. has announced its proposed 2025 Interim Profit Distribution Plan, which was approved by the board of directors. The company plans to distribute a cash dividend of RMB1.20 per ten shares, amounting to a total of RMB445,003,417.08, representing 9.98% of the consolidated net profit for the first half of 2025. This plan is contingent upon shareholder approval at the upcoming general meeting. The announcement reflects the company’s commitment to returning value to its shareholders and maintaining stable financial operations.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.50 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Shanghai Pharmaceuticals Announces Interim Dividend for 2025
Oct 30, 2025

Shanghai Pharmaceuticals Holding Co., Ltd. announced an interim cash dividend of RMB 1.2 per 10 shares for the six months ending June 30, 2025. This announcement reflects the company’s ongoing commitment to returning value to its shareholders and may influence its market positioning by showcasing financial stability and shareholder confidence.

The most recent analyst rating on (HK:2607) stock is a Buy with a HK$13.50 price target. To see the full list of analyst forecasts on Shanghai Pharmaceuticals Holding Co stock, see the HK:2607 Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jan 22, 2026