Guangdong Kanghua Healthcare Co., Ltd. Class H (3689) AI Stock Analysis

• Market Cap: HK$652.07M
• Dividend Yield: 8.21%
• Average Volume (3M): 1.02K
• Price to Earnings (P/E): 7.9
• Beta (1Y): -0.03
• Revenue Growth: 0.47%
• EPS Growth: 50.46%
• Country: HK
• Employees: 4,320
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 0.13
• Shares Outstanding: 84,394,000
• 10 Day Avg. Volume: 720
• 30 Day Avg. Volume: 1,020
• PEG Ratio: -0.57
• Price to Book (P/B): 0.53
• Price to Sales (P/S): 0.37
• P/FCF Ratio: 3.97
• 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: 71 Outperform
• Price Target: HK$2.00 ▲(2.56% Upside)

The overall stock score of 71 reflects a strong valuation with a low P/E ratio and high dividend yield, making it attractive for value and income investors. However, technical indicators suggest some caution due to bearish momentum. Financial performance is mixed, with strong cash flow but declining profitability margins, which could impact long-term growth.

Positive Factors

Cash Flow Performance

Strong cash flow growth indicates robust cash generation, enhancing liquidity and providing flexibility for future investments and operations.

Revenue Growth

Consistent revenue growth reflects the company's ability to maintain and expand its market presence, supporting long-term business sustainability.

Stable Capital Structure

A stable capital structure with manageable debt levels supports financial stability and reduces risk, allowing for strategic investments.

Negative Factors

Declining Profit Margins

Decreasing profit margins indicate rising costs or pricing pressures, which can impact profitability and long-term financial health.

Low Return on Equity

A declining ROE suggests inefficiencies in using equity capital to generate profits, potentially affecting investor confidence and capital attraction.

Net Profit Margin Decline

A significant decline in net profit margin indicates challenges in maintaining profitability, which could affect future earnings and growth potential.

Guangdong Kanghua Healthcare Co., Ltd. Class H Business Overview & Revenue Model

Company Description

Guangdong Kanghua Healthcare Co., Ltd., an investment holding company, primarily operates private hospitals in the People's Republic of China. The company operates through Hospital Services, Rehabilitation and Other Healthcare Services, Sale of Pharmaceutical Products, and Elderly Healthcare Services segments. It provides inpatient and outpatient healthcare, and physical examination services. The company also offers VIP inpatient and outpatient services; assisted reproductive services for couples with infertility disorders; surgical and non-surgical cosmetic treatment options; and laser treatment and skin care services, including acne, acne scarring, stretch marks, and pigmentation treatment, as well as laser hair removal services. In addition, it provides rehabilitation services to patients with physical or mental disabilities; and other healthcare-related services, including elderly care and training service for the disabled, as well as sells pharmaceutical products and medical consumables. Further, the company offers elderly healthcare services, including assisted living, adult daycare, long-term care, residential care, and hospice care to the aged patients. It operates Kanghua Hospital, Renkang Hospital, and Kangxin Hospital. The company was formerly known as Dongguan Kanghua Enterprise Co., Ltd. and changed its name to Guangdong Kanghua Healthcare Co., Ltd. in December 2015. The company was incorporated in 2002 and is headquartered in Dongguan, the People's Republic of China. Guangdong Kanghua Healthcare Co., Ltd. is a subsidiary of Dongguan Kanghua Investment Group Co., Ltd.

How the Company Makes Money

Guangdong Kanghua Healthcare generates revenue through multiple streams, including the sale of pharmaceuticals, medical devices, and health management services. The company's pharmaceutical division focuses on developing and marketing prescription medications, which form a significant portion of its earnings. Additionally, the medical devices segment contributes to revenue through the sale of diagnostic and therapeutic equipment. The company also engages in health management services, offering wellness programs and consultations that provide ongoing revenue. Strategic partnerships with healthcare providers and institutions enhance its market reach and facilitate bulk sales, further driving profitability. The company's adherence to regulatory standards and commitment to research and development ensures a steady pipeline of innovative products, which is critical for sustaining long-term growth.

Guangdong Kanghua Healthcare Co., Ltd. Class H Financial Statement Overview

Summary

Guangdong Kanghua Healthcare Co., Ltd. demonstrates solid cash flow performance, indicating strong liquidity and operational funding. However, declining profit margins and ROE raise concerns about long-term profitability and efficiency. The balance sheet is strong with a solid equity base, but the income statement suggests challenges in maintaining profitability amid rising costs or competitive pressures.

Income Statement

The company exhibits stable revenue with a slight increase from the previous year, indicating consistent growth. Gross profit margin has decreased over the year from 17.84% to 15.65%, suggesting increased costs or competitive pricing pressures. Net profit margin is relatively low at 0.75%, declining from 5.93%, which raises concerns about profitability. The EBIT and EBITDA margins have also decreased, indicating reduced operational efficiency.

Balance Sheet

The company's debt-to-equity ratio remains manageable, indicating a stable capital structure. Return on equity is low at 1.07%, down from 8.50%, which may signal inefficiencies in generating returns for shareholders. The equity ratio stands strong at 52.50%, reflecting a solid equity base supporting the assets.

Cash Flow

The company has a strong free cash flow growth of 163.43%, suggesting robust cash generation capabilities. The operating cash flow to net income ratio is high, indicating strong cash flow relative to net income, enhancing financial flexibility. The free cash flow to net income ratio is also favorable, underscoring efficient cash utilization.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.05B	2.06B	2.04B	1.85B	1.95B	1.75B
Gross Profit	334.01M	321.87M	364.37M	261.35M	352.75M	263.15M
EBITDA	256.12M	224.86M	305.92M	233.79M	298.46M	138.79M
Net Income	76.52M	15.34M	121.06M	59.70M	94.31M	-25.37M
Balance Sheet
Total Assets	2.78B	2.74B	2.62B	2.72B	2.70B	2.45B
Cash, Cash Equivalents and Short-Term Investments	791.85M	678.40M	718.52M	754.34M	770.34M	584.67M
Total Debt	445.48M	320.66M	426.58M	429.92M	494.54M	465.82M
Total Liabilities	1.32B	1.28B	1.13B	1.22B	1.23B	1.05B
Stockholders Equity	1.45B	1.44B	1.42B	1.49B	1.43B	1.33B
Cash Flow
Free Cash Flow	340.37M	193.15M	73.31M	106.20M	162.19M	27.75M
Operating Cash Flow	378.11M	280.13M	204.19M	221.40M	333.37M	275.29M
Investing Cash Flow	-48.17M	-87.33M	-107.72M	-83.16M	-299.33M	-182.15M
Financing Cash Flow	-76.14M	-251.71M	-55.56M	-110.88M	23.27M	-138.22M

Guangdong Kanghua Healthcare Co., Ltd. Class H Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.95
• 50DMA: Positive
• 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:3689, the sentiment is Positive. The current price of 1.95 is above the 20-day moving average (MA) of 1.91, above the 50-day MA of 1.93, and above the 200-day MA of 1.88, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 52.16 is Neutral, neither overbought nor oversold. The STOCH value of 43.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:3689.

Guangdong Kanghua Healthcare Co., Ltd. Class H Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0722	78 Outperform	HK$368.44M	11.56	4.28%	7.10%	-2.88%	-22.83%
3689	71 Outperform	HK$652.07M	7.90	5.33%	8.21%	0.47%	50.46%
9906	57 Neutral	HK$1.05B	84.95	1.87%	―	-13.22%	-69.35%
3869	56 Neutral	HK$829.16M	5.70	30.40%	―	2.30%	―
1419	55 Neutral	HK$307.44M	11.67	3.40%	3.75%	9.07%	8.95%
1518	54 Neutral	HK$341.67M	-7.31	-8.40%	3.16%	-21.31%	-149.92%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Guangdong Kanghua Healthcare Co., Ltd. Class H Corporate Events

Guangdong Kanghua Healthcare Announces Board Changes

Guangdong Kanghua Healthcare Group Co., Ltd. announced a change in its board of directors, with Mr. Lv Yubo resigning as a non-executive director to focus on other endeavors, and Mr. Jiang Xiwen being appointed as his replacement effective October 17, 2025. Mr. Jiang, a well-credentialed professional with a background in microbiology and leadership roles in medical device associations, will bring his expertise to the company, potentially impacting its strategic direction and stakeholder relations positively.

Guangdong Kanghua Healthcare Announces Board Composition

Guangdong Kanghua Healthcare Co., Ltd. has announced the composition of its board of directors, detailing the roles and functions of each member. This announcement highlights the company’s governance structure, which includes executive, non-executive, and independent non-executive directors, as well as their participation in various board committees, potentially impacting the company’s strategic decisions and stakeholder relations.