Zhongzhi Pharmaceutical Holdings Limited (3737) AI Stock Analysis

• Market Cap: HK$525.14M
• Dividend Yield: 8.06%
• Average Volume (3M): 380.30K
• Price to Earnings (P/E): 23.6
• Beta (1Y): 0.15
• Revenue Growth: -1.99%
• EPS Growth: -81.52%
• Country: HK
• Employees: 2,577
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.01
• Shares Outstanding: 863,600,000
• 10 Day Avg. Volume: 423,500
• 30 Day Avg. Volume: 380,300
• PEG Ratio: -0.20
• Price to Book (P/B): 0.70
• Price to Sales (P/S): 0.35
• P/FCF Ratio: 19.84
• 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

• Rating: 63 Neutral
• Price Target: HK$0.50 ▼(-19.35% Downside)

The overall stock score reflects strong revenue growth and a solid balance sheet, offset by declining profitability and bearish technical indicators. The high dividend yield provides some valuation support, but operational challenges and lack of positive momentum weigh on the score.

Zhongzhi Pharmaceutical Holdings Limited Business Overview & Revenue Model

Company Description

Zhongzhi Pharmaceutical Holdings Limited (3737) is a Hong Kong-based company engaged primarily in the research, development, manufacturing, and distribution of pharmaceutical products. The company operates in various sectors within the pharmaceutical industry, including traditional Chinese medicine, Western pharmaceuticals, and healthcare products. Zhongzhi focuses on creating innovative therapeutic solutions, with a portfolio that includes prescription medications, over-the-counter drugs, and dietary supplements aimed at improving health outcomes.

How the Company Makes Money

Zhongzhi Pharmaceutical Holdings Limited generates revenue through several key streams. Primarily, the company earns income by selling its pharmaceutical products, which include a range of prescription and over-the-counter medications. The company's revenue model is supplemented by partnerships with healthcare institutions and distributors that enhance market reach and product availability. Additionally, Zhongzhi may engage in research collaborations and licensing agreements with other pharmaceutical firms, allowing it to monetize its intellectual property and innovations. The company's strategic focus on both traditional Chinese medicine and Western pharmaceutical products positions it to capture diverse market segments, contributing to its overall earnings.

Zhongzhi Pharmaceutical Holdings Limited Financial Statement Overview

Summary

Zhongzhi Pharmaceutical Holdings Limited shows robust revenue growth and a strong balance sheet with low leverage. However, declining profitability margins and volatile cash flows indicate operational challenges. Improving net margins and cash flow stability is crucial for sustained financial health.

Income Statement

Zhongzhi Pharmaceutical Holdings Limited has shown consistent revenue growth, with a notable increase from 1,342 million HKD in 2019 to 2,215 million HKD in 2024. Gross profit margin remains strong, averaging above 57%, indicating efficient cost management. However, net profit margin has declined from 8.6% in 2020 to 4.3% in 2024, suggesting increased expenses or pricing pressures. The EBIT and EBITDA margins have also weakened slightly over the years.

Balance Sheet

The company's balance sheet is robust, with a healthy equity ratio consistently above 50%, indicating a strong capital base. The debt-to-equity ratio has remained low, averaging around 0.20, suggesting prudent leverage. However, the decline in cash and cash equivalents over the years could be a concern for liquidity. Return on equity has decreased, reflecting the decline in net income.

Cash Flow

Cash flow analysis reveals volatility, with free cash flow experiencing negative values in recent years, indicating potential cash management issues. Operating cash flow has fluctuated significantly, and the free cash flow to net income ratio has been inconsistent, pointing to operational challenges in converting profits into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.01B	2.21B	2.05B	1.83B	1.75B	1.60B
Gross Profit	1.14B	1.29B	1.22B	1.07B	1.06B	991.09M
EBITDA	73.84M	170.39M	317.53M	153.87M	119.71M	203.69M
Net Income	20.55M	95.21M	162.78M	106.39M	52.13M	138.53M
Balance Sheet
Total Assets	1.84B	1.99B	1.79B	1.88B	1.52B	1.42B
Cash, Cash Equivalents and Short-Term Investments	176.31M	167.10M	166.65M	419.36M	242.18M	311.04M
Total Debt	139.50M	188.60M	225.06M	170.86M	175.74M	187.90M
Total Liabilities	752.07M	865.58M	739.30M	869.31M	622.94M	598.76M
Stockholders Equity	1.09B	1.12B	1.05B	1.00B	898.74M	820.18M
Cash Flow
Free Cash Flow	133.61M	39.62M	-69.93M	196.17M	-7.47M	-20.81M
Operating Cash Flow	197.40M	181.48M	101.50M	284.57M	178.38M	93.18M
Investing Cash Flow	-87.27M	-120.06M	-202.76M	13.38M	-135.98M	-250.42M
Financing Cash Flow	-126.94M	-58.73M	-154.62M	-68.14M	-40.83M	-71.93M

Zhongzhi Pharmaceutical Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3737, the sentiment is Negative. The current price of 0.62 is below the 20-day moving average (MA) of 0.64, below the 50-day MA of 0.69, and below the 200-day MA of 0.83, indicating a bearish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 36.73 is Neutral, neither overbought nor oversold. The STOCH value of 28.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:3737.

Zhongzhi Pharmaceutical Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0239	―	HK$744.82M	10.50	9.75%	7.74%	-24.96%	-26.43%
3737	―	HK$525.14M	23.57	1.87%	8.06%	-1.99%	-81.52%
0950	―	HK$1.14B	11.68	5.35%	2.46%	19.80%	55.09%
0897	―	HK$517.55M	73.02	0.55%	6.52%	-4.92%	―
1652	―	HK$691.11M	―	-40.38%	―	-43.46%	-96.48%
Sector *	―	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
1498	―	HK$169.82M	―	-33.22%	―	-17.32%	55.74%

Zhongzhi Pharmaceutical Holdings Limited Corporate Events

Zhongzhi Pharmaceutical Reports Significant Financial Decline in H1 2025

Zhongzhi Pharmaceutical Holdings Limited reported a significant decline in its financial performance for the first half of 2025, with revenue dropping by 19.1% to approximately RMB880.5 million compared to the same period in 2024. The company’s gross profit also fell by 23.0%, and profit attributable to owners plummeted by 89.4%, leading to a decision not to distribute any interim dividend. This downturn reflects challenges in the company’s operations and could impact its market positioning and stakeholder confidence.

Zhongzhi Pharmaceutical Announces Board Composition and Roles

Zhongzhi Pharmaceutical Holdings Limited has announced the composition of its Board of Directors and the roles within its three standing Board Committees. This announcement provides clarity on the leadership structure, which could influence the company’s strategic direction and governance, potentially affecting its market positioning and stakeholder confidence.

Zhongzhi Pharmaceutical to Review Interim Results and Dividend

Zhongzhi Pharmaceutical Holdings Limited has announced an upcoming board meeting scheduled for August 26, 2025, to discuss and approve the unaudited interim results for the first half of the year and consider the payment of an interim dividend. This meeting is significant as it will provide insights into the company’s financial performance and potential shareholder returns, impacting its market positioning and stakeholder interests.