| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 26.82 | 326 |
| Intrinsic value (DCF) | 2.97 | -53 |
| Graham-Dodd Method | 2.76 | -56 |
| Graham Formula | n/a |
Shanghai Shenqi Pharmaceutical Investment Management Co., Ltd. is a prominent pharmaceutical manufacturing holding company based in Shanghai, China, with operations spanning research, development, and production of diverse therapeutic categories. Founded in 1992, the company specializes in anti-tumor, cardiovascular, cerebrovascular, tonic products, cold and cough, children's medicine, and anti-fungal drugs, serving both prescription and over-the-counter (OTC) markets. Operating within China's massive healthcare sector, Shenqi Pharmaceutical leverages its strategic location in Shanghai to access one of the country's largest medical markets and research ecosystems. The company's diversified product portfolio positions it to benefit from China's growing healthcare demands driven by an aging population and increasing health awareness. As a publicly traded entity on the Shanghai Stock Exchange, Shenqi represents an investment opportunity in China's domestic pharmaceutical manufacturing sector, which continues to expand alongside the country's healthcare infrastructure development and regulatory evolution.
Shanghai Shenqi Pharmaceutical presents a mixed investment profile with several concerning financial metrics. While the company maintains a conservative capital structure with low debt (CNY 167M vs. cash of CNY 779M) and generates positive operating cash flow (CNY 208M), its profitability metrics raise significant concerns. The company's net income of CNY 71.4M on revenue of CNY 2.05B represents a thin 3.5% net margin, suggesting operational inefficiencies or intense competitive pressures. The diluted EPS of 0.13 CNY indicates modest earnings generation relative to the share count. The dividend payment of 0.15 CNY per share actually exceeds EPS, potentially indicating an unsustainable payout ratio. The low beta of 0.47 suggests defensive characteristics but may also reflect limited growth prospects. Investors should carefully evaluate the company's ability to improve profitability in China's competitive pharmaceutical market.
Shanghai Shenqi Pharmaceutical operates in the highly competitive Chinese pharmaceutical market, where it faces significant pressure from both domestic giants and multinational corporations. The company's competitive positioning appears challenged by its relatively small scale (CNY 2.05B revenue) compared to industry leaders, which limits its R&D spending capacity and market reach. While Shenqi's diversified product portfolio across multiple therapeutic areas provides some revenue stability, this breadth may also prevent the company from developing deep expertise or competitive advantages in any single category. The company's presence in both prescription and OTC markets offers distribution flexibility but requires competing against specialized players in each segment. Shenqi's location in Shanghai provides access to talent and infrastructure, but also places it in direct competition with many of China's most advanced pharmaceutical companies. The thin profit margins suggest the company lacks pricing power or distinctive products that would allow premium pricing. Without significant technological advantages or blockbuster products, Shenqi appears positioned as a mid-tier player in a market increasingly dominated by larger, more specialized competitors with greater R&D resources and distribution networks.