| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 27.33 | 431 |
| Intrinsic value (DCF) | 1.97 | -62 |
| Graham-Dodd Method | 1.17 | -77 |
| Graham Formula | 0.22 | -96 |
Chongqing Lummy Pharmaceutical Co., Ltd. is a prominent Chinese pharmaceutical manufacturer established in 1999 and headquartered in Chongqing. Operating within the competitive healthcare sector, Lummy engages in the comprehensive research, development, manufacturing, and sale of a diverse portfolio of pharmaceutical products. The company's extensive product line addresses critical therapeutic areas including oncology (tumor drugs), infectious diseases (antibacterial, antiviral, antifungal), liver diseases, endocrinology, and traditional Chinese patent medicines. It also produces essential drugs for the digestive, immune, blood, cardiovascular, and nervous systems, alongside electrolyte solutions, nutritional products, and active pharmaceutical ingredients (APIs). As a key player on the Shenzhen Stock Exchange, Lummy leverages its integrated business model from R&D to commercialization to serve the vast Chinese healthcare market. The company's strategic focus on both Western pharmaceuticals and traditional Chinese medicine positions it uniquely to capitalize on growing domestic demand for diverse medical treatments, making it a significant entity in China's drug manufacturing landscape.
Chongqing Lummy Pharmaceutical presents a high-risk investment profile for FY 2024. The company reported a net loss of CNY 87.8 million on revenues of CNY 795.6 million, with negative diluted EPS of -0.0832, indicating significant operational challenges. While the market capitalization of approximately CNY 4.85 billion suggests market recognition, the negative profitability metrics raise concerns about near-term financial sustainability. A positive aspect is the company's strong operating cash flow of CNY 185 million, which provides some liquidity buffer. However, the beta of 1.24 indicates higher volatility than the broader market. The absence of dividend payments reflects the company's current focus on preserving capital. Investors should carefully weigh Lummy's diverse product portfolio and market position against its current unprofitability and the competitive pressures in the Chinese pharmaceutical sector before considering an investment.
Chongqing Lummy Pharmaceutical operates in the highly competitive Chinese pharmaceutical manufacturing sector, where its competitive positioning is challenged by both scale disadvantages and current financial performance. The company's primary competitive advantage lies in its diversified product portfolio spanning multiple therapeutic areas, including both Western pharmaceuticals and traditional Chinese medicine (TCM), which provides some revenue stability through product diversification. However, Lummy faces significant disadvantages compared to larger domestic and international competitors. The company's relatively small revenue base (CNY 795.6 million) and negative net income position it as a niche player rather than a market leader. Larger Chinese pharmaceutical giants benefit from substantial economies of scale, stronger R&D budgets, and more extensive distribution networks. Lummy's focus on both API production and finished dosage forms represents an integrated approach, but this may stretch resources thin compared to more specialized competitors. The company's geographic base in Chongqing provides regional advantages in Western China but limits national market penetration compared to peers headquartered in pharmaceutical hubs like Shanghai or Beijing. While Lummy's TCM offerings provide differentiation in a market with strong cultural preferences for traditional medicine, this segment faces intense competition from established TCM specialists. The company's current financial losses further constrain its ability to invest in competitive R&D and marketing initiatives necessary to gain market share against well-capitalized rivals.