We reinitiate coverage of China Resources Pharmaceutical Group, or CR Pharma, with a narrow moat rating and fair value estimate of HKD 5.82 per share. CR Pharma is the third-largest pharmaceutical distributor by revenue in China. The stock is currently trading at a 15% discount to our fair value estimate. CR Pharma has little revenue cyclicality and no specific business exposure to geopolitical risks.
Price cuts for volume-based procurement are more lenient, raising CR Pharma’s operating margin.
The current cycle of interest-rate cuts in China reverses, leading to higher short-term interest servicing costs for CR Pharma.
|
Metric
|
03320
|
COR
|
01099
|
|---|---|---|---|
Price/Earnings (Normalized) | 7.40 | 17.33 | 7.24 |
Price/Book Value | 0.77 | 41.04 | 0.84 |
Price/Sales | 0.14 | 0.16 | 0.11 |
Price/Cash Flow | 3.13 | 13.84 | 3.52 |
|
Metric
|
03320
|
COR
|
01099
|
|---|---|---|---|
Quick Ratio | 1.00 | 0.50 | 1.05 |
Current Ratio | 1.33 | 0.89 | 1.39 |
Interest Coverage | 4.89 | 9.10 | 7.35 |
|
Metric
|
03320
|
COR
|
01099
|
|---|---|---|---|
Return on Assets (Normalized) | 3.90% | 4.19% | 4.43% |
Return on Equity (Normalized) | 20.49% | 373.63% | 24.34% |
Return on Invested Capital (Normalized) | 7.28% | 47.73% | 9.74% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
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