| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 34.99 | 59 |
| Intrinsic value (DCF) | 15.37 | -30 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 17.60 | -20 |
Henan Lingrui Pharmaceutical Co., Ltd. is a prominent Chinese pharmaceutical manufacturer specializing in the production and distribution of specialty and generic medicines. Founded in 1992 and headquartered in Xinyang, China, the company has established itself as a significant player in China's healthcare sector with a diverse product portfolio spanning ten dosage forms including adhesive plasters, tablets, capsules, granules, and tinctures. Lingrui Pharmaceutical's extensive product line encompasses approximately 100 varieties, featuring key products such as Tongluoqutong plasters, Peiyuantongnao capsules, Danlutongdu tablets, stomachache free tablets, and Shenqi Hypoglycemic capsules. The company operates within China's rapidly growing pharmaceutical market, leveraging its manufacturing expertise to serve the healthcare needs of the world's most populous nation. As a listed entity on the Shanghai Stock Exchange, Lingrui Pharmaceutical represents an important component of China's domestic pharmaceutical industry, focusing on both traditional Chinese medicine formulations and modern pharmaceutical products to address various therapeutic areas.
Henan Lingrui Pharmaceutical presents a mixed investment profile with several attractive fundamentals offset by sector-specific risks. The company demonstrates solid profitability with net income of CNY 722.6 million on revenue of CNY 3.5 billion, translating to a healthy net margin of approximately 20.6%. Strong operating cash flow of CNY 875.9 million and minimal total debt of CNY 39.8 million against cash reserves of CNY 1.23 billion indicate robust financial health. The generous dividend yield supported by a CNY 0.9 per share payout adds income appeal. However, investors should consider the company's limited international exposure, concentration in the competitive Chinese pharmaceutical market, and potential regulatory risks inherent in China's evolving healthcare policies. The low beta of 0.1 suggests defensive characteristics but may also indicate limited growth momentum compared to more aggressive pharmaceutical peers.
Henan Lingrui Pharmaceutical operates in the highly competitive Chinese pharmaceutical market, where it has carved out a niche through its diverse product portfolio spanning multiple dosage forms and therapeutic categories. The company's competitive advantage lies in its extensive product range of approximately 100 varieties across ten different dosage forms, providing diversification benefits and reducing reliance on any single product category. Its specialization in both traditional Chinese medicine formulations and modern pharmaceutical products allows it to cater to different segments of the healthcare market. However, Lingrui faces intense competition from both domestic pharmaceutical giants and international players operating in China. The company's regional focus within China may limit its growth potential compared to multinational competitors with global reach. Its relatively small market capitalization of CNY 12.8 billion positions it as a mid-tier player in the Chinese pharmaceutical landscape, potentially lacking the scale advantages of larger competitors in research and development investment and distribution network expansion. The company's strength in adhesive plasters and traditional formulations provides some differentiation, but it must continuously innovate to maintain relevance in China's rapidly evolving pharmaceutical market where regulatory changes and pricing pressures are constant challenges.