| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 15.69 | -14 |
| Intrinsic value (DCF) | 8.31 | -54 |
| Graham-Dodd Method | 12.79 | -30 |
| Graham Formula | 21.77 | 20 |
Guangxi LiuYao Group Co., Ltd. is a prominent pharmaceutical distributor and retailer headquartered in Liuzhou, China, with a history dating back to 1981. Operating as a subsidiary of Liuzhou Liangmianzhen Co., Ltd., the company plays a vital role in China's expansive healthcare supply chain, focusing on the distribution and retail of pharmaceutical products. Guangxi LiuYao Group serves as a critical link between pharmaceutical manufacturers and end consumers, including hospitals, clinics, and retail pharmacies, primarily within the Guangxi region. The company's business model capitalizes on the essential nature of healthcare products and China's growing, aging population, which drives consistent demand. As a key player in the medical distribution sector, Guangxi LiuYao Group benefits from the structural tailwinds of increasing healthcare expenditure and government initiatives to improve medical access across the country. Its established presence and logistical capabilities make it a significant regional healthcare infrastructure asset, contributing to the stability and efficiency of drug distribution networks in Southern China.
Guangxi LiuYao Group presents a stable, defensive investment profile within China's healthcare sector, characterized by consistent revenue generation (CNY 21.2 billion) and solid profitability (net income of CNY 855 million). The company's low beta of 0.366 indicates lower volatility compared to the broader market, appealing to risk-averse investors. Financial health appears reasonable with ample cash reserves (CNY 3.7 billion) relative to debt (CNY 4.1 billion), and the company generates positive operating cash flow (CNY 839 million) that supports its dividend payment (CNY 0.751 per share). However, investors should consider the competitive intensity and regulatory pressures inherent in China's pharmaceutical distribution industry, which may compress margins over time. The company's regional concentration in Guangxi represents both a strength in local market knowledge and a potential limitation to growth scalability compared to national distributors.
Guangxi LiuYao Group operates in the highly fragmented but consolidating Chinese pharmaceutical distribution market, where it maintains a strong regional position in Guangxi province. The company's competitive advantage stems from its deep-rooted local presence, established relationships with healthcare providers, and logistical expertise developed over four decades of operation. This regional focus allows for efficient distribution networks and strong customer loyalty that national players may find difficult to replicate at the local level. However, the company faces significant competition from both national giants and other regional distributors. The Chinese pharmaceutical distribution industry is characterized by thin margins, regulatory complexity, and increasing consolidation driven by government policies favoring larger, more efficient operators. While Guangxi LiuYao's regional specialization provides defensive characteristics, it may limit growth opportunities compared to competitors with national footprints. The company's moderate scale (CNY 21.2 billion revenue) positions it as a mid-sized player in an industry where scale advantages in procurement, logistics efficiency, and technology investment are becoming increasingly important. Its ability to maintain profitability in the face of industry-wide margin pressure and competition from both state-owned and private distributors will be critical to long-term competitiveness.