Zhongzhi Pharmaceutical Holdings Limited (3737) AI Stock Analysis

• Market Cap: HK$711.48M
• Dividend Yield: 6.47%
• Average Volume (3M): 316.23K
• Price to Earnings (P/E): 6.9
• Beta (1Y): 0.14
• Revenue Growth: 5.79%
• EPS Growth: -43.49%
• Country: HK
• Employees: 2,577
• Sector: Healthcare
• Sector Strength: 58
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.12
• Shares Outstanding: 863,600,000
• 10 Day Avg. Volume: 398,900
• 30 Day Avg. Volume: 316,233
• PEG Ratio: 0.07
• Price to Book (P/B): 0.81
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.16
• 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: 70 Outperform
• Price Target: ―

Zhongzhi Pharmaceutical Holdings Limited scores 70 overall, driven by strong valuation with an attractive P/E ratio and high dividend yield. Financial performance shows growth, but declining margins and volatile cash flows are concerns. Technical analysis indicates a bearish trend, with potential oversold conditions not yet prominent. Focus on operational improvements could enhance future prospects.

Zhongzhi Pharmaceutical Holdings Limited Business Overview & Revenue Model

Company Description

Zhongzhi Pharmaceutical Holdings Limited, an investment holding company, engages in the research, development, manufacture, and sale of pharmaceutical products in the People's Republic of China. The company operates through three segments: Pharmaceutical Manufacturing, Operation of Chain Pharmacies, and Operation of On-Line Pharmacies. It provides Chinese patent medicines and decoction pieces under the Zeus, Liumian, and Caojinghua brands. The company is also manufacture and sale of food and Chinese herbs; property management; and pharmaceutical drugs, as well as offers detection and testing services. As of December 31, 2021, it operated 398 self-operated chain pharmacies, including 361 medical insurance designated pharmacies located in Zhongshan in the Guangdong Province under the Zeus brand. The company was founded in 1993 and is headquartered in Zhongshan, the People's Republic of China. Zhongzhi Pharmaceutical Holdings Limited is a subsidiary of Crystal Talent Investment Group Limited.

How the Company Makes Money

Zhongzhi Pharmaceutical Holdings Limited generates revenue through the production and sale of its diverse range of traditional Chinese medicine and healthcare products. The company operates manufacturing facilities where it produces these products, which are then distributed through various channels including pharmacies, hospitals, and direct consumer sales. Additionally, Zhongzhi Pharmaceutical may engage in strategic partnerships and collaborations with other healthcare companies and institutions to expand its market presence and product offerings. The company's revenue streams are primarily driven by domestic sales within China, with potential for international expansion as demand for traditional medicine grows globally.

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
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.21B	2.05B	1.83B	1.75B	1.60B
	Gross Profit
1.29B	1.22B	1.07B	1.06B	991.09M
	EBIT
136.91M	198.88M	103.51M	79.58M	141.12M
	EBITDA
170.39M	317.53M	153.87M	119.71M	203.69M
	Net Income Common Stockholders
95.21M	162.78M	106.39M	52.13M	138.53M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
167.10M	192.30M	395.70M	257.85M	311.04M
	Total Assets
1.99B	1.79B	1.88B	1.52B	1.42B
	Total Debt
188.60M	225.06M	170.86M	175.74M	187.90M
	Net Debt
21.50M	60.69M	-210.15M	-57.64M	-106.13M
	Total Liabilities
865.58M	739.30M	869.31M	622.94M	598.76M
	Stockholders Equity
1.12B	1.05B	1.00B	898.74M	820.18M
Cash Flow		Free Cash Flow
39.62M	-69.93M	196.17M	-7.47M	-20.81M
	Operating Cash Flow
181.48M	101.50M	284.57M	178.38M	93.18M
	Investing Cash Flow
-120.06M	-202.76M	13.38M	-135.98M	-250.42M
	Financing Cash Flow
0.00	-154.62M	-68.14M	-40.83M	-71.93M

Zhongzhi Pharmaceutical Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.84
• 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 0.84 is below the 20-day moving average (MA) of 0.84, below the 50-day MA of 0.86, and below the 200-day MA of 0.89, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 47.47 is Neutral, neither overbought nor oversold. The STOCH value of 70.00 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
3737	70 Outperform	HK$711.48M	6.88	8.81%	6.47%	5.79%	-43.49%
Sector *	54 Neutral	$5.37B	3.26	-45.10%	3.30%	16.81%	0.02%
PIAIF		$126.38B	6.18		7.49%	―	―
SBMFF		$12.60B	51.81	6.14%	1.09%	―	―
GZPHF		$5.75B	9.62	7.22%	4.79%	―	―
SHTDF		$7.63B	6.95	9.19%	5.61%	―	―
TRSBF		$7.12B	25.54	14.19%	1.13%	―	―

Zhongzhi Pharmaceutical Holdings Limited Corporate Events

Zhongzhi Pharmaceutical Updates Nomination Committee Terms

Zhongzhi Pharmaceutical Holdings Limited has revised the terms of reference for its Nomination Committee, which was initially adopted in 2015. The updated guidelines emphasize the inclusion of diverse gender representation and require a majority of independent non-executive directors in the committee. This move is likely to enhance the company’s governance structure by promoting diversity and independence in its board nominations, potentially impacting its operational transparency and stakeholder confidence.

Zhongzhi Pharmaceutical Announces AGM and Key Resolutions

Zhongzhi Pharmaceutical Holdings Limited has announced its upcoming annual general meeting scheduled for May 13, 2025, in Hong Kong. Key agenda items include the approval of the 2024 financial statements, a final dividend payment, the re-election of directors, and the reappointment of Ernst & Young as auditors. Additionally, the company seeks shareholder approval for a share repurchase program, allowing the purchase of up to 10% of its issued shares, which could impact its stock market performance and shareholder value.

Zhongzhi Pharmaceutical Announces Board Changes

Zhongzhi Pharmaceutical Holdings Limited has announced a change in its board of directors, effective April 10, 2025. Mr. Zhu Shangheng has been appointed as an independent non-executive director, taking over roles previously held by Mr. Wong Kam Wah, who has resigned. Mr. Zhu brings extensive legal expertise, particularly in pharmaceutical law, which could enhance the company’s governance and risk management capabilities.

Zhongzhi Pharmaceutical Announces Board Composition and Roles

Zhongzhi Pharmaceutical Holdings Limited has announced the composition of its board of directors and the roles of its members. The board comprises executive, non-executive, and independent non-executive directors, with specific members assigned to the audit, nomination, and remuneration committees. This announcement provides clarity on the governance structure of the company, which is crucial for stakeholders to understand the leadership and decision-making processes within the organization.

Zhongzhi Pharmaceutical Reports 2024 Annual Financial Results

Zhongzhi Pharmaceutical Holdings Limited reported its financial results for the year ended December 31, 2024, showing an 8% increase in revenue to RMB 2,214,783,000 compared to the previous year. However, the company experienced a significant decline in profit attributable to equity holders, which fell by 41.5% to RMB 95,212,000, primarily due to increased selling and distribution expenses.

Zhongzhi Pharmaceutical Announces Final Dividend for 2024

Zhongzhi Pharmaceutical Holdings Limited announced a final ordinary cash dividend of HKD 0.05 per share for the financial year ending December 31, 2024. This announcement may impact shareholder returns and reflects the company’s financial performance and commitment to returning value to its investors.

Zhongzhi Pharmaceutical Schedules Board Meeting for Annual Results and Dividend Consideration

Zhongzhi Pharmaceutical Holdings Limited has announced a board meeting scheduled for March 26, 2025, to discuss and approve the audited annual results for the year ending December 31, 2024. The meeting will also consider the payment of a final dividend for 2024, indicating potential financial distributions to stakeholders.