Sinopharm Group Co. Ltd. (HKG:1099) Shares Could Be 23% Below Their Intrinsic Value Estimate

Simply Wall St.

Oct 28

AdvertisementKey Insights Using the 2 Stage Free Cash Flow to Equity, Sinopharm Group fair value estimate is HK$25.27 Sinopharm Group's HK$19.44 share price signals that it might be 23% undervalued ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Most Discussed

{"basename":"","ssrTDKData":{"titleTemplate":"%s - Tiger Brokers","title":"Tiger Brokers | Global Stocks, Options & Futures Trading App","description":"Tiger Brokers, one-stop investment in US stocks, SGX stocks, HK stocks, A-shares & other global assets. One of the best stock trading platforms in Singapore.","keywords":"tiger brokers,tiger trade,tiger brokers singapore,broker online,stock trading in singapore,share trading singapore,brokerage firm singapore,trading app,stock broker singapore,stock trading platforms,trading account","social":{"ogDescription":"Tiger Brokers, one-stop investment in US stocks, SGX stocks, HK stocks, A-shares & other global assets. One of the best stock trading platforms in Singapore.","ogImage":"https://c1.itigergrowtha.com/portal5/static/media/og-logo.be62fbe1.png","ogUrl":"https://www-web.itiger.com/news/2578981385"},"companyName":"Tiger Brokers"},"pageData":{"isMobile":false,"isTiger":false,"isTTM":true,"region":"SGP","license":"TBSG","edition":"fundamental"},"isCrawlerRequest":true,"__swrFallback__":{"@#url:\"https://stock-news.skytigris.cn/v3/news\",params:#id:\"2578981385\",edition:\"fundamental\",auth_exemption:1,,,undefined,":{"share":"https://ttm.financial/m/news/2578981385?lang=en_US&edition=fundamental","thumbnail":"https://images.simplywall.st/asset/industry/6031000-choice2-main-header/1585186857496","is_english":true,"pubTime":"2025-10-28 10:46","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2578981385","market":"nz","top_or_hot":-1,"title":"Sinopharm Group Co. Ltd. (HKG:1099) Shares Could Be 23% Below Their Intrinsic Value Estimate","media":"Simply Wall St.","content":"<div>\n<p>AdvertisementKey Insights Using the 2 Stage Free Cash Flow to Equity, Sinopharm Group fair value estimate is HK$25.27   Sinopharm Group's HK$19.44 share price signals that it might be 23% undervalued ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/healthcare/hkg-1099/sinopharm-group-shares/news/sinopharm-group-co-ltd-hkg1099-shares-could-be-23-below-thei\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sinopharm Group Co. Ltd. (HKG:1099) Shares Could Be 23% Below Their Intrinsic Value Estimate</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSinopharm Group Co. Ltd. (HKG:1099) Shares Could Be 23% Below Their Intrinsic Value Estimate\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-10-28 10:46 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/hk/healthcare/hkg-1099/sinopharm-group-shares/news/sinopharm-group-co-ltd-hkg1099-shares-could-be-23-below-thei><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>AdvertisementKey Insights Using the 2 Stage Free Cash Flow to Equity, Sinopharm Group fair value estimate is HK$25.27   Sinopharm Group's HK$19.44 share price signals that it might be 23% undervalued ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/healthcare/hkg-1099/sinopharm-group-shares/news/sinopharm-group-co-ltd-hkg1099-shares-could-be-23-below-thei\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"DCF","symbol_name":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","start_time":0,"source_url":"https://simplywall.st/stocks/hk/healthcare/hkg-1099/sinopharm-group-shares/news/sinopharm-group-co-ltd-hkg1099-shares-could-be-23-below-thei","article_id":"2578981385","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/6031000-choice2-main-header/1585186857496"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/hk/healthcare/hkg-1099/sinopharm-group-shares/news/sinopharm-group-co-ltd-hkg1099-shares-could-be-23-below-thei","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2578981385","pubTimestamp":1761619565,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"Key Insights Using the 2 Stage Free Cash Flow to Equity, Sinopharm Group fair value estimate is HK$25.27 Sinopharm...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","FCF":"第一联邦金融","BK1197":"保健护理产品经销商","LU1115378108.SGD":"Eastspring Investments - Global Emerging Markets Dynamic AS SGD","BK4211":"区域性银行","BK4100":"有线和卫星","TV":"墨西哥电视","BK1500":"做空集合股","BK1515":"抗疫概念","01099":"国药控股","LU0640798160.USD":"EASTSPRING INVESTMENTS GLOBAL EMERGING MARKET DYNAMIC \"A\" (USD) ACC"},"translate_title":"国药集团股份有限公司（HKG：1099）股价可能比其内在价值估计低23%","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"01099":1,"DCF":1,"FCF":1,"TV":1},"content_text":"AdvertisementKey Insights Using the 2 Stage Free Cash Flow to Equity, Sinopharm Group fair value estimate is HK$25.27   Sinopharm Group's HK$19.44 share price signals that it might be 23% undervalued    The CN¥21.89 analyst price target for 1099 is 13% less than our estimate of fair value   In this article we are going to estimate the intrinsic value of Sinopharm Group Co. Ltd. (HKG:1099) by taking the expected future cash flows and discounting them to today's value.  Our analysis will employ the Discounted Cash Flow (DCF) model.  There's really not all that much to it, even though it might appear quite complex.  We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios.  If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Crunching The Numbers   We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase.  To begin with, we have to get estimates of the next ten years of cash flows.   Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.   Generally we assume that a dollar today is more valuable than a dollar in the future,  so we discount the value of these future cash flows to their estimated value in today's dollars:  10-year free cash flow (FCF) estimate  2026202720282029203020312032203320342035 Levered FCF (CN¥, Millions) CN¥8.93bCN¥14.3bCN¥7.32bCN¥5.55bCN¥4.66bCN¥4.17bCN¥3.90bCN¥3.76bCN¥3.69bCN¥3.67bGrowth Rate Estimate SourceAnalyst x2Analyst x3Analyst x1Est @ -24.12%Est @ -16.08%Est @ -10.45%Est @ -6.51%Est @ -3.75%Est @ -1.82%Est @ -0.46% Present Value (CN¥, Millions) Discounted @ 8.5% CN¥8.2kCN¥12.2kCN¥5.7kCN¥4.0kCN¥3.1kCN¥2.6kCN¥2.2kCN¥2.0kCN¥1.8kCN¥1.6k(\"Est\" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = CN¥43b After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage.  For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.7%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.5%. Terminal Value (TV)= FCF2035 × (1 + g) ÷ (r – g) = CN¥3.7b× (1 + 2.7%) ÷ (8.5%– 2.7%) = CN¥65bPresent Value of Terminal Value (PVTV)= TV / (1 + r)10= CN¥65b÷ ( 1 + 8.5%)10= CN¥29b The total value, or equity value, is then the sum of the present value of the future cash flows,  which in this case is CN¥72b.  In the final step we divide the equity value by the number of shares outstanding.  Compared to the current share price of HK$19.4, the company appears   a touch undervalued    at a 23% discount to where the stock price trades currently.   The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. SEHK:1099 Discounted Cash Flow October 28th 2025  The Assumptions  We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows.  You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them.  The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance.  Given that we are looking at Sinopharm Group as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt.  In this calculation we've used 8.5%, which is based on a levered beta of 1.105. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.   See our latest analysis for Sinopharm Group SWOT Analysis for Sinopharm GroupStrength Earnings growth over the past year exceeded the industry. Debt is well covered by earnings. Dividends are covered by earnings and cash flows.  Dividend information for 1099. Weakness Dividend is low compared to the top 25% of dividend payers in the Healthcare market.Opportunity Annual earnings are forecast to grow for the next 3 years. Good value based on P/E ratio and estimated fair value. ThreatDebt is not well covered by operating cash flow.  Annual earnings are forecast to grow slower than the Hong Kong market. Is 1099 well equipped to handle threats?  Next Steps:  Valuation is only one side of the coin in terms of building your investment thesis, and it  shouldn't be the only metric you look at when researching a company.  DCF models are not the be-all and end-all of investment valuation.  Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued.  For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation.   What is the reason for the share price sitting below the intrinsic value?   For Sinopharm Group, we've put together three  essential  items  you should further research:   Risks: You should be aware of the 2 warning signs for Sinopharm Group we've uncovered before considering an investment in the company.  Future Earnings: How does 1099's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!   PS. Simply Wall St updates its DCF calculation for every Hong Kong stock every day, so if you want to find the intrinsic value of any other stock just search here.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"}}}