Breaking Down NanJing Pharmaceutical Company Limited Financial Health: Key Insights for Investors

Investors eyeing NanJing Pharmaceutical Company Limited (600713.SS) will find a complex financial picture: revenue for the first three quarters of 2025 reached CNY 41.135 billion (up 0.48% year-over-year) while TTM revenue stood at CNY 53.89 billion (down 0.16% y/y), revenue per employee is about CNY 11.16 million across 4,830 staff, and market capitalization sits at CNY 6.82 billion with a share price of CNY 5.16 as of November 19, 2025; yet profitability is slim - TTM net margin is 1.06% with net income of CNY 530.72 million and EPS of CNY 0.38 (P/E ~13.42) - while leverage and liquidity metrics warrant scrutiny: debt-to-equity is 1.61, total liabilities CNY 25.35 billion versus equity CNY 7.85 billion, net cash is negative by CNY 10.28 billion, interest coverage is 3.10 and debt/EBITDA is 7.44, even as current and quick ratios are 1.46 and 1.06 respectively; valuation hints at potential undervaluation with P/B 0.83, P/S around 0.12-0.13 and cyclically adjusted P/S 0.14 (industry median 2.29), offset by an Altman Z-Score of 2.41, Piotroski F-Score of 5, a dividend yield of 3.35% (annual CNY 0.17, payout ratio 85.44%), EV/EBITDA 10.44 and EV/FCF 126.94 - read on to unpack what these figures mean for risk, cash flow and future growth prospects.

NanJing Pharmaceutical Company Limited (600713.SS) - Revenue Analysis

NanJing Pharmaceutical Company Limited (600713.SS) shows a near-flat revenue profile in 2025 so far, with modest headwinds in trailing figures and a multi-year slowdown in top-line growth. Key headline metrics highlight scale, productivity and market valuation relative to sales.

• Revenue (first 3 quarters 2025): CNY 41.135 billion - +0.48% vs. same period 2024
• TTM Revenue: CNY 53.89 billion - -0.16% YoY
• Revenue per employee: ~CNY 11.16 million (4,830 employees)
• Price-to-Sales (P/S) ratio: 0.13
• Market capitalization: CNY 6.82 billion; Share price: CNY 5.16 (as of 2025-11-19)

Five-year revenue growth trajectory (annual):

• 2021: +13.33%
• 2022: (data point not provided here)
• 2023: (data point not provided here)
• 2024: +0.20%
• 2025 (YTD): +0.48% for first three quarters

For broader context on the company's history, ownership and business model, see: NanJing Pharmaceutical Company Limited: History, Ownership, Mission, How It Works & Makes Money

NanJing Pharmaceutical Company Limited (600713.SS) - Profitability Metrics

• Net income (TTM): CNY 530.72 million
• Net profit margin (TTM): 1.06%
• Earnings per share (EPS): CNY 0.38
• Price-to-earnings (P/E) ratio: 13.42
• Return on equity (ROE): 9.52%
• Operating margin: 2.67%
• EBITDA margin: 2.92%
• Annual dividend per share: CNY 0.17
• Dividend yield: 3.35%
• Payout ratio: 85.44%

• Implication: margins and EBITDA indicate constrained operational profitability typical of companies balancing R&D, manufacturing costs, and market pricing.
• Implication: ROE near 10% shows moderate efficiency deploying shareholder capital.
• Implication: high payout ratio (85.44%) signals generous cash returns but limited retained earnings for reinvestment.

NAnJing Pharmaceutical Company Limited (600713.SS) - Debt vs. Equity Structure

• Debt-to-equity ratio: 1.61 - higher reliance on debt versus shareholders' equity.
• Total liabilities: CNY 25.35 billion; Total equity: CNY 7.85 billion.
• Net cash position: negative - total debt exceeds cash and cash equivalents by CNY 10.28 billion.
• Interest coverage ratio: 3.10 - operating income covers interest expense about 3.1 times.
• Debt-to-EBITDA: 7.44 - indicates multiple years of EBITDA required to pay down debt (pre-tax, pre-D&A).
• June 2025 financing activity: issued CNY 500 million in ultra-short-term financing notes to supplement working capital and repay bank loans.

NanJing Pharmaceutical Company Limited (600713.SS) - Liquidity and Solvency

• Current ratio: 1.46 - adequate short-term liquidity to cover current liabilities.
• Quick ratio: 1.06 - sufficient liquid assets (excluding inventories) for immediate obligations.
• Net change in cash (latest quarter): -CNY 623.96 million - a notable decrease in cash reserves quarter-over-quarter.
• Operating cash flow (latest period): CNY 457.03 million.
• Free cash flow (latest period): CNY 140.05 million.
• Altman Z-Score: 2.41 - moderate bankruptcy risk territory (above distress cutoff ~1.8 but below safe zone ~3.0).
• Piotroski F-Score: 5 - neutral financial health per F-Score signaling mixed fundamental signals.

NanJing Pharmaceutical Company Limited (600713.SS) - Valuation Analysis

• Trailing P/E: 12.45 - the stock is moderately priced relative to current earnings, implying a reasonable earnings yield (~8.03%).
• P/B: 0.83 - trading below book value, which can indicate either bargain pricing or balance sheet concerns depending on asset quality.
• P/S: 0.12 - very low relative to sales, signaling the market assigns low value to each yuan of revenue.
• EV/EBITDA: 10.44 - a middle-ground valuation versus peers; suggests enterprise value is ~10.4x operating cash profits before capex and financing.
• EV/FCF: 126.94 - extremely high, indicating enterprise value is large relative to free cash flow; could reflect weak FCF generation or significant capex/timing effects.
• Cyclically Adjusted P/S: 0.14 - materially below the industry median of 2.29, pointing to potential undervaluation on a cycle-adjusted revenue basis.

• Relative cheapness on P/B and P/S suggests the equity may be undervalued versus balance-sheet and revenue measures.
• Moderate P/E and EV/EBITDA indicate earnings and operating profitability are priced sensibly, not richly.
• High EV/FCF is a red flag - investigate cash conversion, working capital trends, capex profile and one-off items affecting FCF.
• The Cyclically Adjusted P/S well below the industry median warrants deeper diligence into revenue quality, margin sustainability, and cyclical exposure.

NanJing Pharmaceutical Company Limited (600713.SS) - Risk Factors

• Debt structure and leverage

The company's debt-to-equity ratio of 1.61 signals a material reliance on borrowed capital. Higher leverage increases vulnerability to rising interest rates and earnings volatility, and limits financial flexibility for acquisitions or R&D spending.

• Liquidity and cash flow concerns

A negative net cash position combined with high payout levels reduces the buffer available to meet short-term liabilities and to fund capex or working capital during downturns. Monitoring operating cash flow and available credit lines is critical.

• Profitability and reinvestment constraints

The payout ratio of 85.44% indicates most earnings are returned to shareholders rather than retained. This limits internal reinvestment capacity for new product development, capacity expansion, or debt reduction-all relevant for sustaining long-term growth.

• Credit stress and bankruptcy risk

An Altman Z-Score of 2.41 places the company in a moderate-risk area (between safe and distressed zones). Combined with leverage and negative net cash, the Z-Score warrants close attention to covenant compliance, refinancing needs, and interest-coverage metrics.

• Operational performance indicators

The Piotroski F-Score of 5 suggests a neutral mix of improving and deteriorating fundamentals. This middling score implies investors should dig into trends in ROA, margins, accruals, and leverage components to identify underlying drivers.

• Top-line growth risks

Reported declining revenue growth over the past five years signals potential challenges in market share, product mix, pricing power, or competitive dynamics. Slowing revenue makes high payout and leverage more precarious.

• Practical monitoring checklist for investors

• Quarterly operating cash flow and free cash flow trends
• Interest coverage ratio and upcoming debt maturities
• Dividend policy statements versus sustainable payout level
• Revenue and margin drivers (product lines, pricing, market penetration)
• Any changes to credit facilities or covenant waivers

Further context on company history, ownership and business model can be found here: NanJing Pharmaceutical Company Limited: History, Ownership, Mission, How It Works & Makes Money

Nanjing Pharmaceutical Company Limited (600713.SS) - Growth Opportunities

• Market capitalization: CNY 6.82 billion (share price CNY 5.16 as of 2025-11-19).
• Trailing twelve months (TTM) revenue: CNY 53.89 billion (TTM change: -0.16% YoY).
• Ultra-short-term financing notes: CNY 500 million issued in June 2025 to supplement working capital and repay bank loans.
• Piotroski F-Score: 5 (neutral financial health signal).
• Cyclically Adjusted P/S Ratio: 0.14 (industry median: 2.29 - suggests potential undervaluation).
• Dividend policy: annual dividend CNY 0.17 per share, dividend yield 3.35%.

• Valuation arbitrage: Very low cyclically adjusted P/S (0.14) versus industry median (2.29) could attract value-oriented investors if revenue stabilizes.
• Capital management: The CNY 500 million ultra-short-term financing in June 2025 reduces immediate liquidity strain and demonstrates active balance-sheet management to service debt and working capital needs.
• Dividend income: A 3.35% yield with a CNY 0.17 per-share payout supports shareholder returns while signaling management's willingness to distribute cash.
• Operational stabilization: With TTM revenue nearly flat (-0.16% YoY), small improvements in sales growth or margin expansion could materially improve earnings-per-share given the low price base.

• Debt and liquidity execution: Effectiveness of the CNY 500 million notes in rebalancing maturities and lowering short-term interest burden.
• Profitability improvements: Moving the Piotroski F-Score above neutral (toward 7-9) via better return on assets, cash-flow generation, or reduced leverage would materially de-risk the investment thesis.
• Market re-rating potential: If revenue growth resumes and margins recover, the current low P/S could compress upward toward sector norms, amplifying returns.