The average target price of 688108.SS is 14 and suggests 42% 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 14.0. This translates into 42% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 14.0. This suggests 42% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Sino Medical Sciences Technology Inc., a medical device company, engages in the research, development, production, and distribution of interventional devices in China. Its products include drug-eluting stents, balloon catheters, coronary stents, and transcatheter mitral valve replacement devices. Sino Medical Sciences Technology Inc. has a clinical collaboration agreement with The National University of Ireland Galway. The company was founded in 2007 and is headquartered in Tianjin, China.

China

Sino Medical Sciences Technology Inc.

Healthcare

The company pays dividends on rare occasions. There have only been a few years with dividend payments in 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 barely been above zero and was substantially below that of its peers. 

688108.SS reported revenue of CNY 468mn in the last 12 months, up 2% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 95% from FY24 to CNY 0.01. Market expects EPS to reach CNY 0.03 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 2ppts over six months and grown 3ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 5.7% in the last 12 months, a decline from 8.6% in FY23. 

Historically, 688108.SS has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 1.3%, a growth from -14.2% in FY23. 

Sino Medical Sciences Technology Inc. reported a return on equity (RoE) of 0.7% in the last 12 months, up from -5.9% in FY23. The market consensus projects an RoE of 1.2% in FY24, again behind its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to 0.6%, below the peers. The consensus estimate for FY24 for RoCE is 1.1%, again behind the peers. 

Another important profitability metric, return on assets (RoA), amounted to 0.5% in the last 12 months, an increase from -4.3% in FY23. The market analysts predict that RoA will be 0.8% in FY24, again weaker than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -1.3 in the past several years. This ratio implies a fragile 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.

688108.SS 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 resilient historical revenue growth, low margin volatility, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, negligible return on capital, and inadequate interest coverage.

In highly turbulent market conditions, 688108.SS 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, 688108.SS 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 notable. We would also like to highlight the notable intraday volatility of the instrument. 

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

Sino Medical Sciences Technology Inc.

CN¥ 9.93

4

Sino Medical Sciences Technology Inc.

CN¥ 9.93

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 9.93

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