Mayinglong Pharmaceutical Group Co., Ltd. : Fairly valued, but don’t skip the other factors

Mayinglong Pharmaceutical Group Co., Ltd. relative valuation is now NEUTRAL. It was previously rated UNDERVALUED, and has a fundamental analysis score of 53.

Our analysis is based on comparing Mayinglong Pharmaceutical Group Co., Ltd. with the following peers – Jiangsu Hengrui Medicine Co., Ltd. Class A, Jilin Zixin Pharmaceutical Industrial Co., Ltd. Class A, PKU Healthcare Corp. Ltd. Class A, Jilin Gpro Titanium Industry Co., Ltd. Class A, GuangYuYuan Chinese Herbal Medicine Co., Ltd. Class A, Zhejiang Hisun Pharmaceutical Co., Ltd. Class A, Tonghua Golden-Horse Pharmaceutical Industry Co. Ltd. Class A and Jiangzhong Pharmaceutical Co., Ltd. Class A (600276-CN, 002118-CN, 000788-CN, 000545-CN, 600771-CN, 600267-CN, 000766-CN and 600750-CN).

Relative Valuation

Mayinglong Pharmaceutical Group Co., Ltd. is currently neutrally valued, as its previous close of CNY 20.12 lies within the CapitalCube estimate range of CNY 20.00 to CNY 22.76. Over the last 52 week period, Mayinglong Pharmaceutical Group Co., Ltd. has fluctuated between CNY 14.51 and CNY 23.32.

Relative Valuation

Company Overview

  • Taking peer performance into consideration, relative performance over the last month and last year is around the peer median.
  • Mayinglong Pharmaceutical Group Co., Ltd. Class A’s current Price/Book of 4.35 is about median in its peer group.
  • We classify 600993-CN as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
  • 600993-CN‘s median net profit margins and relatively high asset efficiency give it some operating leverage.
  • Change in the company’s annual revenues seems to be coming at the expense of earnings.
  • Over the last five years, 600993-CN‘s return on assets has improved from median to better than the median among its peers, suggesting the company has found relative operating advantages.
  • The company’s relatively low gross and pre-tax margins suggest a non-differentiated product portfolio and not much control on operating costs relative to peers.
  • 600993-CN‘s revenues have grown more slowly than the peer median over the last few years, which combined with the stock price’s relatively low P/E ratio suggests substandard growth expectations relative to peers.
  • The company’s level of capital investment is relatively low and suggests it is milking the business.
  • 600993-CN has the financial and operating capacity to borrow quickly.

Investment Outlook

Mayinglong Pharmaceutical Group Co., Ltd. has a fundamental score of 53 and has a relative valuation of NEUTRAL.

Mayinglong Pharmaceutical Group Co., Ltd.’s Fundamental Analysis Score is about average at 53, thus not allowing for a specific classification into the Value – Price Matrix.

Fundamentals Vs Relative Valuation

Quadrant label definitions. Hover to know more

Safety, Value Play, Value Trap, Speculative

Drivers of Valuation

600993-CN has a Harvesting profile relative to its peers.

We classify 600993-CN as Harvesting because of the market’s low expectations of growth (P/E of 35.44 compared to peer median of 46.40) despite its relatively high returns (ROE of 12.72% compared to the peer median ROE of 6.59%).

The company’s current Price/Book of 4.35 is about median in its peer group.

Valuation Drivers

Quadrant label definitions. Hover to know more

Outperforming, Harvesting, Challenged, Turnaround

600993-CN has maintained its Harvesting profile from the recent year-end.

ROE % (On Common Equity)
Price To Earnings

Peer Analysis

A complete list of valuation metrics is available on the company page.

Company Profile

Mayinglong Pharmaceutical Group Co., Ltd. engages in the manufacture and sale of pharmaceutical products. It also engages in the business of export and import. Its products include musk haemorrhoids cream, musk haemorrhoids stopper and longzhu soft cream. The company was founded on May 17, 2004 and is headquartered in Wuhan, China.

Disclaimer

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