# Yunnan Baiyao Group (000538.SHE)

Canonical: https://gigainvestors.com/s/000538.SHE

Analysis as of: 2026-10-16T07:35:15.593Z. Financial observations: FY1996–FY2025.

Listing currency: CNY. Reporting currency: CNY.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: CNY 52.90 per share; close as of 2026-10-15.

Estimated value: low CNY 39.66 per share, central CNY 51.02 per share, high CNY 58.50 per share. Buy at or below the central value CNY 51.02 per share. Valuation as of 2026-10-16T07:35:15.593Z; scenarios are not confidence intervals.

Expected annual return: 9.7% at the stated quote. About 9.7% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; CN 10-year bond 1.7% + 4 points).

## Checklist

### understandable: pass

- 0 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 0

- Operating margin variation: 0.23×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.15×

- FY2017: 0.15×

- FY2018: 0.14×

- FY2019: 0.16×

- FY2020: 0.21×

- FY2021: 0.10×

- FY2022: 0.09×

- FY2023: 0.12×

- FY2024: 0.14×

- FY2025: 0.12×

### moat: pass

- ROIC, median of available years: 21.0%

- ROIC, second-lowest year: 15.1%

- Typical minus recent gross margin: 0.1 pp

- Typical gross margin (annual median): 27.8%

- Recent gross margin (lower of latest and 3-year median): 27.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.5%

- ROIC including acquisitions, ten-year median: 19.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 23.5%

- FY2017: 30.1%

- FY2018: 35.2%

- FY2019: 24.6%

- FY2020: 40.5%

- FY2021: 16.9%

- FY2022: 11.3%

- FY2023: 15.1%

- FY2024: 18.5%

- FY2025: 16.1%

### economics: pass

- Owner earnings / net income, 5-yr: 0.96×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CNY 19B

- Net income, five-year total: CNY 20B

- Return on incremental invested capital: 34.9%

- Working capital / revenue, annual change: -1.5 pp

- Working capital / revenue, change between three-year averages: -9.9 pp

- Working capital / revenue, final three-year average: 28.0%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.99×

- FY2022: 0.95×

- FY2023: 0.97×

- FY2024: 0.92×

- FY2025: 0.99×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 30.1% vs 16.1%

- Per-share earnings: 2.00 to 2.66 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 2.0%

- Ordinary dilution, 5-year annual growth: -0.0%

- Market cap gain: CNY -10.0B

- Cumulative retained earnings: CNY 5.6B

- Diluted shares, 10-year annual growth: 2.0%

- Diluted shares, 5-year annual growth: -0.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 3.6%

- Per-share value change: CNY 0.66

- Per-share value, starting three-year median: CNY 2.00

- Per-share value, ending three-year median: CNY 2.66

- Buybacks concentrated in cheaper years (correlation): -1.00

- Average buyback yield: 1.0%

- Buyback history: 4 years

- Debt-funded buybacks: Yes

- Acquisition spending: CNY 912M

- Cumulative net income, 10 years: CNY 39B

- ROIC, first three-year median: 30.1%

- ROIC, last three-year median: 16.1%

Chart: Earnings per share; fiscal year observations.

- FY2016: CNY 2.00

- FY2017: CNY 2.16

- FY2018: CNY 1.95

- FY2019: CNY 2.34

- FY2020: CNY 3.09

- FY2021: CNY 1.56

- FY2022: CNY 1.90

- FY2023: CNY 2.29

- FY2024: CNY 2.66

- FY2025: CNY 2.89

### accounting: pass

- Sloan accruals: 1.0%

- Receivables to sales index (DSRI): 0.77×

- Restructuring years, last five: 0

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.89×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.03×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -0.3%

- FY2017: 7.2%

- FY2018: 3.6%

- FY2019: 4.2%

- FY2020: 3.0%

- FY2021: -4.6%

- FY2022: -0.4%

- FY2023: 1.1%

- FY2024: 0.9%

- FY2025: 1.0%

## Holders

## Price story

Down 49% since Dec 2021 · sales +2.9%

Story as of 2026-10-16T10:00:04.235Z; price observation 2026-10-15.

Price needs cash profits to grow 6.1% a year for ten years

### Sales · FY2024–2025

sales +2.9%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: CNY 22B 

- FY2017: CNY 24B 

- FY2018: CNY 27B 

- FY2019: CNY 30B 

- FY2020: CNY 33B 

- FY2021: CNY 36B 

- FY2022: CNY 36B 

- FY2023: CNY 39B 

- FY2024: CNY 40B 

- FY2025: CNY 41B 

### Gross margin · FY2025

gross margin 29.5%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 29.8% 

- FY2017: 31.0% 

- FY2018: 31.2% 

- FY2019: 27.9% 

- FY2020: 27.4% 

- FY2021: 27.1% 

- FY2022: 26.1% 

- FY2023: 26.5% 

- FY2024: 27.8% 

- FY2025: 29.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in drug manufacturers specialty & generic; annual sales are CNY 41.2 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2025: revenue 41186999090.31; grossProfit 12154075894.49; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 000538.SHE: Yunnan Baiyao Group Co.,Ltd engages in the sale of pharmaceuticals, medicinal materials, health and daily chemical products in China. The company offers health products; traditional Chinese medicine used for pain management and anti-inflammation, including the Yunnan Baiyao aerosol, Yunnan Baiyao ointment, and Yunnan Baiyao band-aid; generic drugs and natural specialty medicines in various areas, such as physical fitness, respiratory ailments, cardiovascular health, gynecology, pediatrics, and others; medical devices; tea products; and pharmaceutical supply chain service solutions. Yunnan Baiyao Group Co., Ltd. was founded in 1902 and is based in Kunming, China.

### Why customers stay

Margins ranged from 26.5% to 29.5% during 2023–25; it earns 21% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2023: grossProfit / revenue = 26.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2024: grossProfit / revenue = 27.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2025: grossProfit / revenue = 29.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); 10-year return on capital observations [[2016,0.23481623513317515],[2017,0.3008827787782872],[2018,0.3517182986598689],[2019,0.24625917889426724],[2020,0.4046086126426975],[2021,0.16892620030549785],[2022,0.11323944672700088],[2023,0.15124028283919433],[2024,0.18481353170494627],[2025,0.16087891303889443]]; median 0.2098148834190607. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 26% gross margin through 2022 cost inflation.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); Gross margin observations: [[2021,0.27103837095294636],[2022,0.26143278389048313],[2023,0.2647645582498654]]; range within 2 percentage points.

### Where the cash goes

Spends 2.2% of cash earnings on expansion; earns 34.9% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2016: growth capex 24075099; upkeep 116556937; owner earnings 2919876821. Growth capex / owner earnings = 0.008245244740069123.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2017: growth capex 63557234; upkeep 129649613; owner earnings 3144981432. Growth capex / owner earnings = 0.020209096738476387.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2018: growth capex 236667788.48878747; upkeep 302952950.5112125; owner earnings 3331750075.4887877. Growth capex / owner earnings = 0.0710340761241123.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2019: growth capex 234342946.07457697; upkeep 548941053.925423; owner earnings 3794380819.074577. Growth capex / owner earnings = 0.06176052358701613.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2020: growth capex 286963353.85680443; upkeep 199457198.14319557; owner earnings 5484171801.856805. Growth capex / owner earnings = 0.05232574110089799.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2021: growth capex 271015565; upkeep 263186435; owner earnings 2770910709.116. Growth capex / owner earnings = 0.09780739744098853.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2022: growth capex 11185029.57267493; upkeep 435547790.42732507; owner earnings 2852888868.826675. Growth capex / owner earnings = 0.003920597712337483.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2023: growth capex 255807042.4705181; upkeep 319700098.5294819; owner earnings 3979009776.526518. Growth capex / owner earnings = 0.06428912137376683.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2024: growth capex 89862817.41793251; upkeep 585211668.5820675; owner earnings 4346019847.371933. Growth capex / owner earnings = 0.02067703797355485.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2025: growth capex 110605922.85619467; upkeep 369055687.07380533; owner earnings 5114267373.550195. Growth capex / owner earnings = 0.021626933982416108.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); Incremental return on capital 0.3489157848675558, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); Dividend observations: [[2016,691687830],[2017,930792696],[2018,205157085],[2019,2585132000],[2020,3832209951],[2021,4938511000],[2022,2114410893],[2023,2747626203],[2024,5943519160],[2025,4031481394.74]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); FY2025: cash repurchases 129133637.09999998 CNY.

### Are managers owners

Insiders own 60% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 000538.SHE SharesStats.PercentInsiders = 60.024 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 6.1% yearly over ten years; actual growth was 4.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.593Z); Ten-year compound average after fade. Initial solved rate 0.09331552572674745. Price 52.9; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.899999980114344 → FY2025 2.8680062978990337. Closing-price date 2026-10-15.

## Monthly share-price history (CNY per share)

- 2016-10: CNY 69.23 per share

- 2016-11: CNY 69.23 per share

- 2016-12: CNY 76.15 per share

- 2017-01: CNY 75.41 per share

- 2017-02: CNY 76.67 per share

- 2017-03: CNY 85.12 per share

- 2017-04: CNY 85.50 per share

- 2017-05: CNY 88.68 per share

- 2017-06: CNY 93.85 per share

- 2017-07: CNY 88.05 per share

- 2017-08: CNY 87.00 per share

- 2017-09: CNY 90.70 per share

- 2017-10: CNY 104.84 per share

- 2017-11: CNY 94.10 per share

- 2017-12: CNY 101.79 per share

- 2018-01: CNY 101.12 per share

- 2018-02: CNY 93.30 per share

- 2018-03: CNY 99.00 per share

- 2018-04: CNY 94.75 per share

- 2018-05: CNY 114.10 per share

- 2018-06: CNY 106.96 per share

- 2018-07: CNY 99.61 per share

- 2018-08: CNY 79.60 per share

- 2018-09: CNY 70.23 per share

- 2018-10: CNY 70.23 per share

- 2018-11: CNY 74.50 per share

- 2018-12: CNY 73.96 per share

- 2019-01: CNY 77.73 per share

- 2019-02: CNY 85.08 per share

- 2019-03: CNY 85.50 per share

- 2019-04: CNY 1,000,000.00 per share

- 2019-05: CNY 77.69 per share

- 2019-06: CNY 83.42 per share

- 2019-07: CNY 75.92 per share

- 2019-08: CNY 76.70 per share

- 2019-09: CNY 76.05 per share

- 2019-10: CNY 86.55 per share

- 2019-11: CNY 87.90 per share

- 2019-12: CNY 89.43 per share

- 2020-01: CNY 86.52 per share

- 2020-02: CNY 78.69 per share

- 2020-03: CNY 85.45 per share

- 2020-04: CNY 90.33 per share

- 2020-05: CNY 88.07 per share

- 2020-06: CNY 93.80 per share

- 2020-07: CNY 109.40 per share

- 2020-08: CNY 115.80 per share

- 2020-09: CNY 101.97 per share

- 2020-10: CNY 102.99 per share

- 2020-11: CNY 95.27 per share

- 2020-12: CNY 113.60 per share

- 2021-01: CNY 132.97 per share

- 2021-02: CNY 130.81 per share

- 2021-03: CNY 120.51 per share

- 2021-04: CNY 107.55 per share

- 2021-05: CNY 125.60 per share

- 2021-06: CNY 115.72 per share

- 2021-07: CNY 98.98 per share

- 2021-08: CNY 88.69 per share

- 2021-09: CNY 97.79 per share

- 2021-10: CNY 89.60 per share

- 2021-11: CNY 88.33 per share

- 2021-12: CNY 104.65 per share

- 2022-01: CNY 90.28 per share

- 2022-02: CNY 90.25 per share

- 2022-03: CNY 81.82 per share

- 2022-04: CNY 76.28 per share

- 2022-05: CNY 56.40 per share

- 2022-06: CNY 60.39 per share

- 2022-07: CNY 55.16 per share

- 2022-08: CNY 52.36 per share

- 2022-09: CNY 52.35 per share

- 2022-10: CNY 54.56 per share

- 2022-11: CNY 56.58 per share

- 2022-12: CNY 54.36 per share

- 2023-01: CNY 57.46 per share

- 2023-02: CNY 56.90 per share

- 2023-03: CNY 54.70 per share

- 2023-04: CNY 58.19 per share

- 2023-05: CNY 53.85 per share

- 2023-06: CNY 52.48 per share

- 2023-07: CNY 53.83 per share

- 2023-08: CNY 54.65 per share

- 2023-09: CNY 53.30 per share

- 2023-10: CNY 50.85 per share

- 2023-11: CNY 50.33 per share

- 2023-12: CNY 49.15 per share

- 2024-01: CNY 46.51 per share

- 2024-02: CNY 49.83 per share

- 2024-03: CNY 50.80 per share

- 2024-04: CNY 57.25 per share

- 2024-05: CNY 52.88 per share

- 2024-06: CNY 51.15 per share

- 2024-07: CNY 50.51 per share

- 2024-08: CNY 54.06 per share

- 2024-09: CNY 61.00 per share

- 2024-10: CNY 57.06 per share

- 2024-11: CNY 57.31 per share

- 2024-12: CNY 59.95 per share

- 2025-01: CNY 57.92 per share

- 2025-02: CNY 55.17 per share

- 2025-03: CNY 56.80 per share

- 2025-04: CNY 57.27 per share

- 2025-05: CNY 56.48 per share

- 2025-06: CNY 55.79 per share

- 2025-07: CNY 56.08 per share

- 2025-08: CNY 57.58 per share

- 2025-09: CNY 56.75 per share

- 2025-10: CNY 56.66 per share

- 2025-11: CNY 56.06 per share

- 2025-12: CNY 56.76 per share

- 2026-01: CNY 55.61 per share

- 2026-02: CNY 56.05 per share

- 2026-03: CNY 54.86 per share

- 2026-04: CNY 53.05 per share

- 2026-05: CNY 49.94 per share

- 2026-06: CNY 47.37 per share

- 2026-07: CNY 52.86 per share

- 2026-08: CNY 50.39 per share

- 2026-09: CNY 50.44 per share

- 2026-10: CNY 51.99 per share

## Annual estimated value (CNY per share)

- FY2016: low CNY 31.12 per share, central CNY 43.03 per share, high CNY 49.97 per share

- FY2017: low CNY 36.33 per share, central CNY 49.27 per share, high CNY 56.80 per share

- FY2018: low CNY 43.14 per share, central CNY 54.61 per share, high CNY 61.29 per share

- FY2019: low CNY 40.99 per share, central CNY 53.48 per share, high CNY 60.75 per share

- FY2020: low CNY 46.71 per share, central CNY 60.52 per share, high CNY 68.56 per share

- FY2021: low CNY 45.21 per share, central CNY 55.67 per share, high CNY 63.00 per share

- FY2022: low CNY 49.83 per share, central CNY 67.16 per share, high CNY 77.24 per share

- FY2023: low CNY 37.08 per share, central CNY 46.80 per share, high CNY 53.50 per share

- FY2024: low CNY 37.39 per share, central CNY 47.54 per share, high CNY 54.47 per share

- FY2025: low CNY 38.67 per share, central CNY 49.88 per share, high CNY 57.25 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.