Hospital Corporation of China Ltd (3869) AI Stock Analysis

• Market Cap: HK$710.32M
• Dividend Yield: N/A
• Average Volume (3M): 660.00
• Price to Earnings (P/E): 4.9
• Beta (1Y): 0.05
• Revenue Growth: 2.30%
• EPS Growth: N/A
• Country: HK
• Employees: 1,841
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 1.21
• Shares Outstanding: 138,194,000
• 10 Day Avg. Volume: 1,420
• 30 Day Avg. Volume: 660
• PEG Ratio: 0.18
• Price to Book (P/B): 2.59
• Price to Sales (P/S): 0.61
• P/FCF Ratio: 4.44
• 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: 56 Neutral
• Price Target: HK$5.50 ▼(-5.17% Downside)

The overall stock score is primarily influenced by financial performance and technical analysis. The company's financial health is challenged by negative net income and liquidity concerns, while technical indicators show bearish momentum. The stock's low P/E ratio offers some valuation appeal, but the lack of dividend yield and earnings call data limits further insights.

Positive Factors

Stable core healthcare business

Operating an integrated hospital network that provides inpatient, outpatient, diagnostics and pharmacy services creates recurring, non-discretionary demand. This business model supports steady utilization, repeatable revenue streams and long-term service relationships that are resilient across economic cycles.

Consistent revenue growth

Positive, steady revenue growth indicates expanding service volumes or pricing power and supports longer-term scalability. Even modest top-line expansion provides a base for operating leverage and potential margin recovery if costs are controlled, aiding multi-quarter strategic planning.

Improving operating margins

Rising gross margin and a healthy EBIT margin suggest improving cost structure, pricing or case mix. Durable operating efficiency gains strengthen the firm's ability to generate operating earnings even if non-operating items fluctuate, supporting sustainable operating cash generation over months.

Negative Factors

High leverage

Very high leverage materially increases refinancing, interest and covenant risk, limiting strategic flexibility. With equity comprising a small portion of funding, adverse operating or funding shocks could force costly deleveraging or asset sales, undermining long-term stability.

No operating cash flow

Absence of operating and free cash flow indicates the business is not currently generating internal liquidity to fund operations or capex. Over multiple quarters this forces reliance on external financing, heightens liquidity risk and constrains reinvestment in facilities and services.

Negative net income and ROE

A net loss and negative ROE erode shareholder equity and reduce capacity to fund growth internally. Combined with already thin equity ratios, continued losses would further weaken the balance sheet and hinder the company’s ability to attract capital or invest in long-term service expansion.

Hospital Corporation of China Ltd Business Overview & Revenue Model

Company Description

Hospital Corporation of China Limited, an investment holding company, engages in the operation and management of hospitals in the People's Republic of China. The company provides hospital management and consulting services to Yangsi Hospital, Cixi Hospital, and Jinhua Hospital; and general hospital services. It also engages in the wholesale of pharmaceutical products. The company was incorporated in 2014 and is headquartered in Beijing, the People's Republic of China. Hospital Corporation of China Limited is a subsidiary of Vanguard Glory Limited.

How the Company Makes Money

Hospital Corporation of China Ltd generates revenue primarily through its hospital operations, which include inpatient and outpatient services, diagnostic testing, and surgical procedures. The company earns money by charging patients for medical services rendered, which may be covered by private insurance or government healthcare programs. In addition to service fees, the company may also derive income from pharmacy sales, laboratory services, and partnerships with pharmaceutical companies for clinical trials. Significant collaborations with local governments and health authorities can also play a role in securing funding and enhancing service delivery, ultimately contributing to the company's overall earnings.

Hospital Corporation of China Ltd Financial Statement Overview

Summary

The company shows positive revenue growth, but profitability is impacted by a negative net income in 2024. High leverage and zero operating cash flow raise concerns about financial stability and liquidity.

Income Statement

The company has shown a steady increase in revenue over recent years, with a 1.02% growth from 2023 to 2024. However, the net profit margin has turned negative in 2024 due to a net loss, which is a concern. Gross profit margin has improved from 16.77% in 2023 to 19.11% in 2024, and the EBIT margin remained healthy at 12.61% in 2024. The EBITDA margin also shows improvement. Despite positive revenue growth, the negative net income affects overall profitability.

Balance Sheet

The company's debt-to-equity ratio remains high, indicating significant leverage with a ratio of 3.41 in 2024. The equity ratio has decreased to 13.07%, pointing to a lower proportion of equity financing. Return on equity has been negative in 2024 due to the net loss, highlighting concerns over shareholder returns. Despite having substantial total assets, the high debt levels pose a risk to financial stability.

Cash Flow

The company reported zero operating and free cash flow in 2024, indicating challenges in generating cash from operations. The prior year showed positive free cash flow, but the absence of operating cash flow in 2024 raises concerns. The cash flow situation suggests potential liquidity issues, which could impact the company’s ability to meet short-term obligations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.47B	1.44B	1.43B	1.14B	520.29M	399.21M
Gross Profit	270.25M	275.82M	239.36M	150.88M	214.23M	194.33M
EBITDA	220.71M	236.48M	283.48M	-464.44M	-401.87M	-379.86M
Net Income	133.81M	-38.63M	131.38M	-480.95M	-280.71M	-404.34M
Balance Sheet
Total Assets	2.55B	2.58B	2.50B	2.44B	3.12B	3.74B
Cash, Cash Equivalents and Short-Term Investments	723.01M	813.08M	667.89M	627.61M	779.97M	951.46M
Total Debt	1.02B	1.15B	1.04B	1.10B	1.09B	1.71B
Total Liabilities	1.82B	2.01B	1.91B	1.99B	1.99B	2.38B
Stockholders Equity	508.47M	337.71M	379.09M	255.71M	797.97M	1.08B
Cash Flow
Free Cash Flow	150.95M	196.87M	67.40M	126.49M	117.27M	73.21M
Operating Cash Flow	157.09M	212.07M	82.69M	143.13M	133.07M	83.48M
Investing Cash Flow	37.18M	42.64M	-15.52M	187.16M	13.96M	104.83M
Financing Cash Flow	-25.43M	-64.00M	-41.62M	-279.34M	-550.82M	-119.15M

Hospital Corporation of China Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3869, the sentiment is Negative. The current price of 5.8 is above the 20-day moving average (MA) of 5.61, below the 50-day MA of 5.84, and below the 200-day MA of 5.97, indicating a bearish trend. The MACD of -0.21 indicates Positive momentum. The RSI at 16.84 is Positive, neither overbought nor oversold. The STOCH value of 56.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:3869.

Hospital Corporation of China Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0722	78 Outperform	HK$372.44M	11.68	4.28%	7.10%	-2.88%	-22.83%
3689	71 Outperform	HK$568.47M	6.89	5.33%	9.14%	0.47%	50.46%
9906	57 Neutral	HK$990.00M	80.10	1.87%	―	-13.22%	-69.35%
3869	56 Neutral	HK$710.32M	4.89	30.40%	―	2.30%	―
1419	55 Neutral	HK$307.44M	11.67	3.40%	3.75%	9.07%	8.95%
1518	54 Neutral	HK$302.62M	-6.48	-8.40%	3.16%	-21.31%	-149.92%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%