| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 27.42 | 237 |
| Intrinsic value (DCF) | 2.85 | -65 |
| Graham-Dodd Method | 2.60 | -68 |
| Graham Formula | 1.72 | -79 |
Anhui Huangshan Capsule Co., Ltd. is a leading Chinese pharmaceutical capsule manufacturer specializing in the production of hollow and enteric capsules for the healthcare industry. Founded in 1989 and headquartered in Xuancheng, China, the company has established itself as a key supplier in the pharmaceutical supply chain with a diverse product portfolio including enterosoluble vacant gelatin capsules, vegetable enteric capsules, colon soluble capsules, and innovative hydroxypropyl methyl cellulose and pullulan capsules. Operating within the Drug Manufacturers - Specialty & Generic sector, Huangshan Capsule serves pharmaceutical companies requiring high-quality encapsulation solutions for drug delivery systems. The company's strategic positioning in China's growing pharmaceutical market, combined with its three-decade manufacturing expertise, makes it an essential component of the healthcare infrastructure. With increasing demand for pharmaceutical products and the expansion of generic drug markets globally, Huangshan Capsule plays a critical role in enabling efficient drug manufacturing through its specialized capsule technologies that ensure precise dosage delivery and medication stability.
Anhui Huangshan Capsule presents a conservative investment profile with moderate growth potential in China's pharmaceutical supply chain. The company demonstrates financial stability with a market capitalization of approximately CNY 2.3 billion, minimal debt (CNY 22,097), and strong cash reserves of CNY 341.6 million. With a beta of 0.276, the stock shows low volatility relative to the broader market, appealing to risk-averse investors. However, revenue of CNY 473.5 million and net income of CNY 49.3 million indicate modest scale in a competitive capsule manufacturing industry. The diluted EPS of 0.16 and dividend per share of 0.065 provide income generation, while positive operating cash flow of CNY 63.5 million supports ongoing operations. Key risks include dependence on the Chinese pharmaceutical sector, potential pricing pressure from larger competitors, and limited international diversification. The investment case hinges on the company's ability to maintain its niche position and capitalize on China's growing pharmaceutical production demands.
Anhui Huangshan Capsule operates in a highly specialized segment of pharmaceutical manufacturing where competitive advantages are built on production quality, regulatory compliance, and customer relationships. The company's primary competitive positioning relies on its long-standing presence in the Chinese market since 1989, providing established relationships with domestic pharmaceutical companies. Its diverse product portfolio, including both traditional gelatin and innovative vegetable-based capsules, allows it to serve varying customer requirements in drug delivery systems. However, the capsule manufacturing industry faces intense competition from both domestic and international players with greater scale and technological capabilities. Huangshan's competitive limitations include its relatively small revenue base (CNY 473.5 million) compared to global leaders, potentially restricting R&D investment for next-generation capsule technologies. The company's strength lies in its focus on the Chinese market, where local knowledge and distribution networks provide some insulation from international competition. Its minimal debt load and strong cash position provide financial stability but may also indicate conservative growth strategies that could limit market share expansion. The competitive landscape requires continuous innovation in capsule materials and manufacturing processes to meet evolving pharmaceutical industry standards for drug delivery efficiency and patient safety.