Guangdong Biolight Meditech Co. Ltd. – Value Analysis (SHENZHEN:300246) : September 6, 2017

Capitalcube gives Guangdong Biolight Meditech Co. Ltd. a score of 63.

Our analysis is based on comparing Guangdong Biolight Meditech Co. Ltd. with the following peers – Lepu Medical Technology (Beijing) Co., Ltd. Class A, Zhuhai Hokai Medical Instruments Co., Ltd. Class A, Jiangsu Yuyue Medical Equipment & Supply Co., Ltd. Class A and Shanghai Kehua Bio-Engineering Co., Ltd. Class A (300003-CN, 300273-CN, 002223-CN and 002022-CN).

Investment Outlook

Guangdong Biolight Meditech Co. Ltd. has a fundamental score of 63 and has a relative valuation of OVERVALUED.

Fundamental Score

Access our research and ratings on Guangdong Biolight Meditech Co. Ltd.

Company Overview

  • From a peer analysis angle, relative underperformance over the last year has improved more recently.
  • It currently trades at a Price/Book ratio of (7.15).
  • 300246-CN‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • 300246-CN has relatively low net profit margins while its asset efficiency is relatively high.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • 300246-CN‘s return on assets has improved from below median to about median among its peers over the last five years.
  • The company’s margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.
  • While 300246-CN‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company’s capital investment program suggests it is under-investing in a business that is producing peer median returns.
  • 300246-CN has the financial and operating capacity to borrow quickly.

Access our research and ratings on Guangdong Biolight Meditech Co. Ltd.

Leverage & Liquidity

300246-CN has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 0.79% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 0.79%), and a well-cushioned interest coverage level of 82.88x, 300246-CN can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • All 4 peers for the company have an outstanding debt balance.

300246-CN has maintained its Quick & Able profile from the recent year-end.

  • 300246-CN‘s interest coverage is greater than (but within one standard deviation of) its five-year average interest coverage of 73.38x.
  • Compared to 2016, interest coverage has remained relatively stable for both the company (82.88x) and the peer median (61.61x).
  • 300246-CN‘s debt-EV continues to trend upward and is now similar to its five-year average debt-EV of 0.57%.
  • Like the interest coverage trend, debt-EV has remained relatively stable for both the company (0.79%) and the peer median (0.79%).

Access the detailed analysis for Guangdong Biolight Meditech Co. Ltd.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Lepu Medical Technology (Beijing) Co., Ltd. Class A 5.86 1.6 14.97 57.76
Zhuhai Hokai Medical Instruments Co., Ltd. Class A 13.34 4.81 2.67 7.09
Jiangsu Yuyue Medical Equipment & Supply Co., Ltd. Class A 0.69 4.69 65.44 511.41
Shanghai Kehua Bio-Engineering Co., Ltd. Class A 0.7 5.33 61.61 581.71
Guangdong Biolight Meditech Co., Ltd. Class A 0.79 2.54 82.88 324.08
Peer Median 0.79 4.69 61.61 324.08
Best In Class 0.69 5.33 82.88 581.71

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Company Profile

Guangdong Biolight Meditech Co., Ltd. engages in developing, producing and marketing of medical instruments include patient monitoring system, central monitoring system and digital colposcope system. The company was founded on June 28, 1993 and is headquartered in Zhuhai, China.

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