The average target price of 300636.SZ is 8.7 and suggests 16% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 8.7. This translates into 16% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 8.7. This suggests 16% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Jiangxi Synergy Pharmaceutical Co., Ltd. manufactures and sells APIs worldwide. It offers APIs, liquid crystal compounds, and intermediates. Jiangxi Synergy Pharmaceutical Co., Ltd. was founded in 2004 and is headquartered in Yichun, the People's Republic of China.

China

Jiangxi Synergy Pharmaceutical Co., Ltd.

Healthcare

The company tries to pay dividends regularly but only sometimes does so. It has paid dividends in roughly half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been low and below its peers. On average, the company pays dividends annually. 

300636.SZ reported revenue of CNY 740mn in the last 12 months, down 2% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 20% from FY24 to CNY 0.20. Market expects EPS to reach CNY 0.30 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 5ppts and its growth accelerated by 5ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported good EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 26.6% in the last 12 months, up from 26.6% in FY23. 

Historically, 300636.SZ has reported strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 11.3%, down from 14.7% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 3.1%, below the peers. The consensus estimate for FY24 for RoCE is 5.9%, again behind the peers. 

Another important profitability metric, return on assets (RoA), amounted to 2.5% in the last 12 months, a decrease from 3.9% in FY23. The market analysts predict that RoA will be 4.0% in FY24, again weaker than its peers. 

Jiangxi Synergy Pharmaceutical Co., Ltd. reported a return on equity (RoE) of 3.7% in the last 12 months, down from 6.0% in FY23. The market consensus projects an RoE of 5.8% in FY24, again behind its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.8 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

300636.SZ has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability, adequate interest coverage, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, negligible return on capital, excessive margin volatility, and poor working capital management.

In highly turbulent market conditions, 300636.SZ is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, 300636.SZ is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from moderate to average. 

Based on key historical and expected multiples, the stock is slightly overvalued relative to its peers. Specifically, the stock is 'expensive' on P/E, neutral on EV/EBITDA, reasonably priced on P/FCF. 

Jiangxi Synergy Pharmaceutical Co., Ltd.

CN¥ 7.37

4

Jiangxi Synergy Pharmaceutical Co., Ltd.

CN¥ 7.37

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 7.37

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