Shanghai ZJ Bio-Tech Co., Ltd. engages in the research and development, production, and sale of molecular genetic diagnostic reagents, and instruments and equipment in China. The company was founded in 2005 and is based in Shanghai, China.

China

Shanghai ZJ Bio-Tech 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. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. On average, the company pays dividends annually. 

688317.SS reported revenue of CNY 160mn in the last 12 months, down 11% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 33% from FY24 to CNY -0.89.

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). Over the past six months the stock has exceeded the performance of this peer group by 2ppts and its growth decelerated 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 very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -116.0% in the last 12 months, a decline from -35.5% in FY23. 

Historically, 688317.SS has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -106.8%, down from -50.3% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -4.6%, below the peers. 

Shanghai ZJ Bio-Tech Co., Ltd. reported a return on equity (RoE) of -4.6% in the last 12 months, down from -3.4% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to -4.3% in the last 12 months, a decrease from -3.1% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.6 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.

688317.SS has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually stable and remains extremely favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 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 low margin volatility, solid cash flow generation, 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, bleak profitability, negligible return on capital, and inadequate interest coverage.

In highly turbulent market conditions, 688317.SS is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, 688317.SS is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from large to substantial. 

Considering past and projected metrics, the stock is 'expensive' compared to its peers. Specifically, the stock is overpriced on P/FCF. 

Shanghai ZJ Bio-Tech Co., Ltd.

CN¥ 16.65

2

Shanghai ZJ Bio-Tech Co., Ltd.

CN¥ 16.65

2

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 16.65

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