Financial Analysis Report for Tianjin Pharmaceutical Da Ren Tang Group Corporation Limited
Business Description: Tianjin Pharmaceutical Da Ren Tang Group Corporation Limited is a joint stock limited company incorporated in the People’s Republic of China. The company is primarily engaged in the Chinese medicine and Western medicine business segments. The company has a nationwide presence in China and operates in the pharmaceutical industry. 10
Financial Statement Analysis:
Income Statement:
The company’s revenue decreased by 11% year-over-year to RMB7,306.74 million in FY2024. 21
Gross profit margin increased from 43% in FY2023 to 47% in FY2024, mainly due to changes in the sales structure. 21
Other gains increased significantly by RMB1,750.07 million, primarily due to a gain of RMB1,709.26 million on the partial disposal of an associate. 21
Research and development expenses decreased by 12% year-over-year. 21
Administrative expenses increased by 19% due to the repurchase of restricted shares, increased share-based incentive expenses, and higher consulting and brand development costs. 21
The company’s share of profits from associated companies decreased by 43% year-over-year. 21
Net profit for the year increased significantly by 127% to RMB2,207.81 million. 21
Balance Sheet:
Cash and cash equivalents increased by 39% to RMB2,944.43 million as of 31 December 2024. 21
Trade and other receivables decreased by 51% to RMB1,324.89 million. 21
Inventories decreased by 18% to RMB1,285.69 million. 21
Investment in associates increased by 47% to RMB1,293.53 million. 21
Fixed assets decreased by 3% to RMB1,386.80 million. 21
Cash Flow Statement:
Net cash inflow from operating activities increased by 41% to RMB895.90 million. 21
Net cash inflow from investing activities amounted to RMB371.08 million, compared to a net outflow of RMB514.27 million in the prior year. 21
Net cash outflow from financing activities decreased by 62% to RMB319.89 million. 21
Dividends:
The company proposes to pay a final dividend of RMB12.8 per 10 shares, subject to shareholder approval. 24
Key Findings:
The company’s revenue and profitability declined year-over-year, but it reported a significant increase in net profit due to a one-time gain from the partial disposal of an associate.
The company’s financial position remains strong, with a healthy cash position and reduced trade receivables and inventories.
The company’s investment in associates increased, indicating its focus on strategic partnerships and acquisitions.
The proposed dividend payout of RMB12.8 per 10 shares represents an attractive return for shareholders.
Recommendation: For investors currently holding the stock: Considering the company’s strong financial position, the proposed attractive dividend, and the potential for future growth through strategic investments, we recommend holding the stock.
For investors not currently holding the stock: Given the company’s recent performance, the proposed dividend, and its strategic focus, we recommend considering an investment in Tianjin Pharmaceutical Da Ren Tang Group Corporation Limited.
Disclaimer: This report is based solely on the information provided in the financial statements and does not constitute investment advice. Investors should conduct their own due diligence and consider their investment objectives, risk tolerance, and financial circumstances before making any investment decisions.
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