Breaking Down Guangxi LiuYao Group Co., Ltd Financial Health: Key Insights for Investors

Dive into a data-rich snapshot of Guangxi LiuYao Group Co., Ltd (603368.SS): Q1 2025 revenue hit 5.32 billion CNY (up 2.46% QoQ) while trailing twelve months revenue sits at 20.95 billion CNY (down 1.27% YoY), with 5,513 employees generating about 3.78 million CNY each and a lean P/E of 9.78 alongside a low P/S of 0.35 that underpins the stock's valuation story; profitability shows TTM net income of 784.68 million CNY (EPS 1.98 CNY), a 3.75% profit margin, 5.28% operating margin and ROE of 9.46%, while the company returns value via a 3.87% dividend yield (0.75 CNY annual dividend) and a 57.98% payout ratio; balance sheet and leverage look manageable with a debt-to-equity of 0.57, net debt-to-equity of 19.6%, total debt of 4.64 billion CNY versus cash of 2.69 billion CNY (net cash position -1.95 billion CNY), interest coverage of 6.5x and an EV/EBITDA of 7.44 (EV 9.79 billion CNY) that sits below the industry median, supported by current and quick ratios of 1.64 and 1.31 and short- and long-term asset cushions of 7.1 billion and 16.4 billion CNY respectively; flagged risks include tighter Guangxi drug share controls, weakening wholesale sales and an Altman Z-Score of 2.23 with a Piotroski F-Score of 5, while growth levers include pharmacy network expansion, a 1.1% share buyback, low beta (0.37) and modest analyst EPS growth forecasts of 4.5% vs. the Chinese market average of 23.8%-read on for a line-by-line breakdown of these figures and what they mean for investors.

Guangxi LiuYao Group Co., Ltd (603368.SS) - Revenue Analysis

• Q1 2025 revenue: 5.32 billion CNY (+2.46% QoQ)
• TTM revenue: 20.95 billion CNY (-1.27% YoY)
• 2024 revenue: 21.18 billion CNY (+1.78% YoY)
• Revenue per employee: ~3.78 million CNY (5,513 employees)
• Price-to-sales (P/S): 0.35 - low valuation relative to sales
• Market capitalization: 7.36 billion CNY; share price: 18.55 CNY (as of 2025-10-17)

• Revenue momentum: modest QoQ improvement in Q1 2025, but TTM and YoY indicators show slight softening - underlying sales base roughly stable around ~21 billion CNY.
• Operational efficiency: revenue per employee (~3.78M CNY) suggests a relatively high productivity level given the company's scale and workforce.
• Valuation context: P/S of 0.35 and market cap of 7.36 billion CNY imply market pricing below one year's worth of sales, which can signal undervaluation or margin/earnings concerns.

Guangxi LiuYao Group Co., Ltd (603368.SS) - Profitability Metrics

Key profitability figures for Guangxi LiuYao Group Co., Ltd (603368.SS) provide a snapshot of operational efficiency, shareholder returns, and margin structure based on the trailing twelve months (TTM).

• Margins: Gross margin at 10.58% but net margin compresses to 3.75%, indicating notable operating and non-operating costs between gross profit and net income.
• Profitability vs. Capital: ROE of 9.46% reflects moderate efficiency in converting equity into profit - positive but not exceptional for capital-intensive sectors.
• Cash returns: A 3.87% dividend yield with a 0.75 CNY annual payout supports income-focused investors while retaining room for reinvestment.
• Valuation signal: Earnings yield of 12.37% suggests the market price implies relatively high earnings return compared with many peers, warranting further valuation context.

For broader corporate context, including history, ownership and how the business operates, see: Guangxi LiuYao Group Co., Ltd: History, Ownership, Mission, How It Works & Makes Money

Guangxi LiuYao Group Co., Ltd (603368.SS) - Debt vs. Equity Structure

Guangxi LiuYao Group's capital structure shows moderate leverage with improving dynamics over the past five years and sufficient earnings coverage for interest. Key metrics, cash/debt composition and valuation multiples are summarized below.

• Debt-to-equity ratio: 0.57 (57.0%), indicating moderate debt relative to equity.
• Net debt to equity ratio: 19.6%, assessed as satisfactory for the sector.
• Five-year trend: debt-to-equity declined from 67.9% to 55.7%, reflecting deleveraging.
• Interest coverage (EBIT / Interest): 6.5x, suggesting EBIT comfortably covers interest expense.
• Net cash position: -1.95 billion CNY (total debt 4.64 billion CNY; cash & equivalents 2.69 billion CNY).
• Enterprise value: 9.79 billion CNY; EV/EBITDA: 7.44x.

• Implications for investors:
  • Deleveraging trend reduces financial risk and supports stability of returns.
  • Interest coverage of 6.5x offers a buffer against earnings volatility and rate rises.
  • EV/EBITDA ~7.44x implies a moderate valuation - assess relative to industry medians.
  • Net debt-to-equity at 19.6% suggests room for strategic investments or dividend flexibility.

For investor context and shareholder activity, see: Exploring Guangxi LiuYao Group Co., Ltd Investor Profile: Who's Buying and Why?

Guangxi LiuYao Group Co., Ltd (603368.SS) - Liquidity and Solvency

• Current ratio: 1.64 - short-term assets are 1.64x short-term liabilities, indicating sufficient coverage for near-term obligations.
• Quick ratio: 1.31 - excluding inventory, liquid assets still exceed current liabilities by a comfortable margin.
• Net short-term liquidity: short-term assets exceed short-term liabilities by 7.1 billion CNY, signaling strong short-term solvency buffer.
• Net long-term position: long-term assets exceed long-term liabilities by 16.4 billion CNY, reflecting strong support for long-term obligations and asset backing.
• Altman Z-Score: 2.23 - moderate bankruptcy risk (near the distress threshold; watch trends and earnings volatility).
• Piotroski F-Score: 5 - average financial health; mixed signals across profitability, leverage, and operational efficiency metrics.

• Liquidity profile is solid: immediate obligations are covered with a meaningful surplus in short-term assets.
• Long-term solvency is strong due to long-term assets significantly exceeding long-term liabilities, reducing refinancing risk.
• Altman Z-Score near 2.23 warrants monitoring-deterioration in earnings or cash flow could push the company toward higher distress risk.
• Piotroski F-Score of 5 suggests that operational improvements or quality-of-earnings upgrades could materially improve the firm's financial quality.

Guangxi LiuYao Group Co., Ltd (603368.SS) - Valuation Analysis

• Trailing P/E: 9.78 - below many market averages, suggesting earnings are inexpensive relative to price.
• Forward P/E: 9.04 - modestly lower than trailing P/E, implying modest expected earnings growth or stable outlook priced in.
• P/B: 0.93 - trading below book value, indicating the market values the company slightly less than its stated equity.
• EV/EBITDA: 7.44 - below the industry median of 9.625, signaling potential undervaluation on an enterprise-value basis.
• PEG: Not available - limits growth-adjusted valuation insight.
• Market cap & EV: 7.53 billion CNY market capitalization and 9.79 billion CNY enterprise value - reflects moderate leverage/enterprise claims relative to equity value.
• 52-week price change: +3.72% with beta 0.37 - low volatility versus the market, limited recent upside but also lower downside sensitivity.

• Implication for investors: low P/E and EV/EBITDA suggest value opportunity but absence of PEG and the sub-1 P/B call for due diligence on asset quality and sustainable earnings.
• Risk considerations: low beta reduces market sensitivity but may also indicate limited growth expectations priced in; review balance sheet and cash flow to reconcile EV vs market cap.
• Further reading: Guangxi LiuYao Group Co., Ltd: History, Ownership, Mission, How It Works & Makes Money

Guangxi LiuYao Group Co., Ltd (603368.SS) - Risk Factors

• Regulatory pressure: Stricter drug share control policies in Guangxi have reduced core customer medication usage and repeat prescriptions, directly pressuring top-line revenue in the company's key geographic market.
• Collection normalization: The normalization and expansion of the official medicine collection catalog have shifted demand away from similar non-collected products, reducing market share for certain legacy SKUs.
• Extended receivables & sales controls: Sales controls tied to long account periods have constrained the wholesale channel, contributing to lower wholesale sales volumes and compressing gross profit margins.
• Moderate bankruptcy risk: Altman Z-Score = 2.23, which indicates moderate financial distress risk (zone between "safe" and "distress"), signaling that liquidity and solvency should be monitored closely.
• Average operational health: Piotroski F-Score = 5, suggesting middling operating performance and accounting quality; this reflects potential operational inefficiencies or inconsistent profitability improvements.
• Leverage exposure: Debt-to-equity ratio = 0.57, representing moderate leverage-manageable in stable rate environments but a vulnerability if borrowing costs rise or cash flows weaken.

• Operational & cash-flow sensitivities: Combined effects of reduced core demand, slower collections, and controlled wholesale sales heighten pressure on operating cash flow and working capital - key for servicing debt at D/E = 0.57.
• Credit & refinancing risk: With an Altman Z-Score near 2.2, any further deterioration in margins or cash conversion could tighten access to credit or raise borrowing costs.
• Strategic product risk: Product lines excluded from collection catalogs face structural demand decline unless replaced with collection-approved alternatives or differentiated offerings.
• Investor considerations: Given the Piotroski F-Score of 5, investors should probe management's plans to improve profitability, working capital management, and product mix.

Guangxi LiuYao Group Co., Ltd (603368.SS) - Growth Opportunities

• Expansion of online pharmacy presence to serve growing e-commerce prescription and OTC demand.
• Rollout and refurbishment of physical pharmacy locations to strengthen local market share and last-mile distribution.
• Integration of omni-channel capabilities to drive cross-selling, repeat purchases, and customer retention.

• Combination of steady dividend policy (3.87% yield, 57.98% payout) and buybacks (1.1% of shares) demonstrates capital return discipline.
• Relatively low beta (0.37) supports positioning the stock as a defensive holding within healthcare exposure.
• Valuation multiples (P/E 9.78, P/B 0.93) suggest potential undervaluation, particularly if expansion execution accelerates earnings beyond the 4.5% consensus.