# Huadong Medicine (000963.SHE)

Canonical: https://gigainvestors.com/s/000963.SHE

Analysis as of: 2026-10-16T07:36:42.700Z. Financial observations: FY1996–FY2025.

Listing currency: CNY. Reporting currency: CNY.

## Verdict

A wonderful business at a fair price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: yes.

Share price: CNY 26.30 per share; close as of 2026-10-15.

Estimated value: low CNY 21.47 per share, central CNY 26.80 per share, high CNY 30.87 per share. Buy at or below the central value CNY 26.80 per share. Valuation as of 2026-10-16T07:36:42.700Z; scenarios are not confidence intervals.

Expected annual return: 10.1% at the stated quote. About 10.1% 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

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.11×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.07×

- FY2017: 0.08×

- FY2018: 0.09×

- FY2019: 0.10×

- FY2020: 0.10×

- FY2021: 0.08×

- FY2022: 0.08×

- FY2023: 0.08×

- FY2024: 0.10×

- FY2025: 0.10×

### moat: pass

- ROIC, median of available years: 22.8%

- ROIC, second-lowest year: 18.7%

- Typical minus recent gross margin: -0.4 pp

- Typical gross margin (annual median): 32.0%

- Recent gross margin (lower of latest and 3-year median): 32.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.4%

- ROIC including acquisitions, ten-year median: 13.8%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 25.5%

- FY2017: 29.1%

- FY2018: 31.5%

- FY2019: 31.3%

- FY2020: 25.2%

- FY2021: 19.9%

- FY2022: 18.0%

- FY2023: 18.7%

- FY2024: 20.3%

- FY2025: 20.1%

### economics: pass

- Owner earnings / net income, 5-yr: 0.86×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CNY 12B

- Net income, five-year total: CNY 15B

- Return on incremental invested capital: 29.4%

- Working capital / revenue, annual change: -0.1 pp

- Working capital / revenue, change between three-year averages: -1.4 pp

- Working capital / revenue, final three-year average: 17.6%

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

- FY2021: 0.90×

- FY2022: 0.92×

- FY2023: 0.82×

- FY2024: 0.77×

- FY2025: 0.90×

### management: pass

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

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 29.1% vs 20.1%

- Per-share earnings: 0.83 to 1.95 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 1.2%

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

- Market cap gain: CNY -57B

- Cumulative retained earnings: CNY 16B

- Diluted shares, 10-year annual growth: 1.2%

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

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 11.3%

- Per-share value change: CNY 1.12

- Per-share value, starting three-year median: CNY 0.83

- Per-share value, ending three-year median: CNY 1.95

- Average buyback yield: 0.0%

- Buyback history: 1 years

- Debt-funded buybacks: No

- Acquisition spending: CNY 8.1B

- Cumulative net income, 10 years: CNY 26B

- ROIC, first three-year median: 29.1%

- ROIC, last three-year median: 20.1%

Chart: Earnings per share; fiscal year observations.

- FY2016: CNY 0.83

- FY2017: CNY 1.02

- FY2018: CNY 1.30

- FY2019: CNY 1.61

- FY2020: CNY 1.61

- FY2021: CNY 1.32

- FY2022: CNY 1.43

- FY2023: CNY 1.62

- FY2024: CNY 2.00

- FY2025: CNY 1.95

### accounting: pass

- Sloan accruals: -2.1%

- Receivables to sales index (DSRI): 0.82×

- Restructuring years, last five: 0

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.24×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.34×

Chart: Sloan accruals; fiscal year observations.

- FY2016: 0.7%

- FY2017: 0.7%

- FY2018: 1.2%

- FY2019: 3.8%

- FY2020: -2.4%

- FY2021: -3.2%

- FY2022: 0.4%

- FY2023: -3.3%

- FY2024: -0.6%

- FY2025: -2.1%

## Holders

## Price story

Down 45% since Feb 2023 · sales +4.1%

Story as of 2026-10-16T10:00:07.924Z; price observation 2026-10-15.

Price needs cash profits to grow 3.6% a year for ten years

### Sales · FY2024–2025

sales +4.1%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: CNY 25B 

- FY2017: CNY 28B 

- FY2018: CNY 31B 

- FY2019: CNY 35B 

- FY2020: CNY 34B 

- FY2021: CNY 35B 

- FY2022: CNY 38B 

- FY2023: CNY 41B 

- FY2024: CNY 42B 

- FY2025: CNY 44B 

### Gross margin · FY2025

gross margin 32.4%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 24.3% 

- FY2017: 26.1% 

- FY2018: 29.0% 

- FY2019: 32.1% 

- FY2020: 33.0% 

- FY2021: 30.7% 

- FY2022: 31.9% 

- FY2023: 32.4% 

- FY2024: 33.2% 

- FY2025: 32.4% 

## 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 43.6 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2025: revenue 43612009891.02; grossProfit 14112530440; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 000963.SHE: Huadong Medicine Co., Ltd, together with its subsidiaries, engages in the wholesale and retail of pharmaceutical products in China and internationally. The company operates through Pharmaceutical Manufacturing, Pharmaceutical Distribution, Medical Aesthetics, and Industrial Microbiology segments. It offers Chinese medicine, immunosuppressive agents, endocrine, digestive system, antineoplastic, cardiovascular, antibiotic drugs, medical beauty field, and medical devices, as well as engages in pharmaceutical logistics and industrial microbiology activities. In addition, the company provides formulation filling, technical, transportation and warehousing services. The company has strategic collaboration with Heidelberg Pharma AG to jointly develop Antibody Drug Conjugates (ADCs). Huadong Medicine Co., Ltd was incorporated in 1993 and is headquartered in Hangzhou, China.

### Why customers stay

Margins ranged from 32.4% to 33.2% during 2023–25; it earns 22.8% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2023: grossProfit / revenue = 32.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2024: grossProfit / revenue = 33.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2025: grossProfit / revenue = 32.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); 10-year return on capital observations [[2016,0.2547932544529659],[2017,0.291191433531781],[2018,0.3151288989605601],[2019,0.3132863709275374],[2020,0.25180830845949664],[2021,0.1990496540008406],[2022,0.18021589961516468],[2023,0.186939463992462],[2024,0.20343412983387482],[2025,0.2012304802534562]]; median 0.22762121914668573. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 32% gross margin through 2022 cost inflation.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); Gross margin observations: [[2021,0.30653080239311786],[2022,0.31892881858283456],[2023,0.3238381629245646]]; range within 2 percentage points.

### Where the cash goes

Spends 7.3% of cash earnings on expansion; earns 29.4% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2016: growth capex 256934160; upkeep 210066982; owner earnings 1446591703. Growth capex / owner earnings = 0.17761346167488698.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2017: growth capex 185862368.38128436; upkeep 292826942.61871564; owner earnings 1758362509.3812842. Growth capex / owner earnings = 0.10570196270090167.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2018: growth capex 224617207.31474018; upkeep 651845695.6852598; owner earnings 1934436631.3147402. Growth capex / owner earnings = 0.11611505059334978.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2019: growth capex 415575196.5101688; upkeep 937869137.4898312; owner earnings 2279726766.510169. Growth capex / owner earnings = 0.18229166872762384.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2020: growth capex 0; upkeep 1472983747; owner earnings 1777882080. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2021: growth capex 98766592.67002046; upkeep 720328531.3299795; owner earnings 2074772919.9920204. Growth capex / owner earnings = 0.04760356746433741.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2022: growth capex 388164852.9584696; upkeep 805073872.0415304; owner earnings 2299949063.9624696. Growth capex / owner earnings = 0.16877106499468272.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2023: growth capex 382591352.24967194; upkeep 1224027114.750328; owner earnings 2331133339.531672. Growth capex / owner earnings = 0.1641224659961043.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2024: growth capex 172708491.10745478; upkeep 1555156368.8925452; owner earnings 2692721783.415455. Growth capex / owner earnings = 0.06413900320900992.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); FY2025: growth capex 223548628.8206823; upkeep 1350905379.5893178; owner earnings 3075617425.290682. Growth capex / owner earnings = 0.07268414692362277.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); Incremental return on capital 0.29419688442179776, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); Dividend observations: [[2016,697107876],[2017,727341436],[2018,769174181],[2019,570627092],[2020,565727532],[2021,460108834],[2022,576493556],[2023,594214887],[2024,1702177684],[2025,1692127934.15]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 58.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 000963.SHE SharesStats.PercentInsiders = 58.156 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 3.6% yearly over ten years; actual growth was 9.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:42.700Z); Ten-year compound average after fade. Initial solved rate 0.03847560774269419. Price 26.3; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.684942920831462 → FY2025 1.7533981714389086. Closing-price date 2026-10-15.

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

- 2016-10: CNY 73.60 per share

- 2016-11: CNY 72.99 per share

- 2016-12: CNY 72.07 per share

- 2017-01: CNY 76.35 per share

- 2017-02: CNY 77.74 per share

- 2017-03: CNY 92.65 per share

- 2017-04: CNY 89.00 per share

- 2017-05: CNY 45.50 per share

- 2017-06: CNY 49.70 per share

- 2017-07: CNY 46.54 per share

- 2017-08: CNY 47.24 per share

- 2017-09: CNY 49.07 per share

- 2017-10: CNY 52.81 per share

- 2017-11: CNY 49.92 per share

- 2017-12: CNY 53.88 per share

- 2018-01: CNY 56.40 per share

- 2018-02: CNY 56.18 per share

- 2018-03: CNY 65.50 per share

- 2018-04: CNY 68.50 per share

- 2018-05: CNY 77.46 per share

- 2018-06: CNY 48.25 per share

- 2018-07: CNY 46.30 per share

- 2018-08: CNY 44.98 per share

- 2018-09: CNY 41.98 per share

- 2018-10: CNY 35.66 per share

- 2018-11: CNY 34.13 per share

- 2018-12: CNY 26.46 per share

- 2019-01: CNY 26.53 per share

- 2019-02: CNY 31.70 per share

- 2019-03: CNY 32.63 per share

- 2019-04: CNY 32.41 per share

- 2019-05: CNY 29.26 per share

- 2019-06: CNY 25.96 per share

- 2019-07: CNY 27.53 per share

- 2019-08: CNY 28.61 per share

- 2019-09: CNY 26.20 per share

- 2019-10: CNY 26.10 per share

- 2019-11: CNY 24.60 per share

- 2019-12: CNY 24.38 per share

- 2020-01: CNY 20.85 per share

- 2020-02: CNY 19.30 per share

- 2020-03: CNY 17.41 per share

- 2020-04: CNY 19.92 per share

- 2020-05: CNY 22.65 per share

- 2020-06: CNY 25.28 per share

- 2020-07: CNY 27.80 per share

- 2020-08: CNY 28.00 per share

- 2020-09: CNY 24.69 per share

- 2020-10: CNY 27.89 per share

- 2020-11: CNY 27.66 per share

- 2020-12: CNY 26.56 per share

- 2021-01: CNY 26.37 per share

- 2021-02: CNY 31.84 per share

- 2021-03: CNY 36.88 per share

- 2021-04: CNY 52.64 per share

- 2021-05: CNY 52.82 per share

- 2021-06: CNY 46.01 per share

- 2021-07: CNY 35.49 per share

- 2021-08: CNY 30.75 per share

- 2021-09: CNY 29.68 per share

- 2021-10: CNY 36.64 per share

- 2021-11: CNY 33.89 per share

- 2021-12: CNY 40.20 per share

- 2022-01: CNY 36.60 per share

- 2022-02: CNY 37.89 per share

- 2022-03: CNY 33.42 per share

- 2022-04: CNY 34.10 per share

- 2022-05: CNY 38.77 per share

- 2022-06: CNY 45.16 per share

- 2022-07: CNY 44.97 per share

- 2022-08: CNY 42.17 per share

- 2022-09: CNY 40.12 per share

- 2022-10: CNY 40.93 per share

- 2022-11: CNY 41.22 per share

- 2022-12: CNY 46.80 per share

- 2023-01: CNY 47.40 per share

- 2023-02: CNY 48.05 per share

- 2023-03: CNY 46.34 per share

- 2023-04: CNY 41.45 per share

- 2023-05: CNY 38.94 per share

- 2023-06: CNY 43.37 per share

- 2023-07: CNY 43.43 per share

- 2023-08: CNY 37.99 per share

- 2023-09: CNY 42.24 per share

- 2023-10: CNY 42.98 per share

- 2023-11: CNY 40.79 per share

- 2023-12: CNY 41.46 per share

- 2024-01: CNY 28.95 per share

- 2024-02: CNY 33.68 per share

- 2024-03: CNY 31.00 per share

- 2024-04: CNY 32.94 per share

- 2024-05: CNY 31.63 per share

- 2024-06: CNY 27.81 per share

- 2024-07: CNY 29.19 per share

- 2024-08: CNY 29.48 per share

- 2024-09: CNY 34.99 per share

- 2024-10: CNY 33.01 per share

- 2024-11: CNY 38.98 per share

- 2024-12: CNY 34.60 per share

- 2025-01: CNY 34.80 per share

- 2025-02: CNY 34.63 per share

- 2025-03: CNY 36.70 per share

- 2025-04: CNY 38.85 per share

- 2025-05: CNY 44.70 per share

- 2025-06: CNY 40.36 per share

- 2025-07: CNY 44.30 per share

- 2025-08: CNY 44.30 per share

- 2025-09: CNY 41.55 per share

- 2025-10: CNY 41.58 per share

- 2025-11: CNY 42.00 per share

- 2025-12: CNY 39.45 per share

- 2026-01: CNY 36.07 per share

- 2026-02: CNY 35.94 per share

- 2026-03: CNY 35.32 per share

- 2026-04: CNY 33.35 per share

- 2026-05: CNY 29.02 per share

- 2026-06: CNY 28.12 per share

- 2026-07: CNY 29.11 per share

- 2026-08: CNY 27.26 per share

- 2026-09: CNY 27.69 per share

- 2026-10: CNY 26.58 per share

## Annual estimated value (CNY per share)

- FY2016: low CNY 8.79 per share, central CNY 11.99 per share, high CNY 13.85 per share

- FY2017: low CNY 12.15 per share, central CNY 16.72 per share, high CNY 19.38 per share

- FY2018: low CNY 14.62 per share, central CNY 20.44 per share, high CNY 23.83 per share

- FY2019: low CNY 18.34 per share, central CNY 25.79 per share, high CNY 30.12 per share

- FY2020: low CNY 17.95 per share, central CNY 25.02 per share, high CNY 29.14 per share

- FY2021: low CNY 20.00 per share, central CNY 28.31 per share, high CNY 32.94 per share

- FY2022: low CNY 20.96 per share, central CNY 29.71 per share, high CNY 34.60 per share

- FY2023: low CNY 22.42 per share, central CNY 31.70 per share, high CNY 36.87 per share

- FY2024: low CNY 20.63 per share, central CNY 26.45 per share, high CNY 30.53 per share

- FY2025: low CNY 20.94 per share, central CNY 26.23 per share, high CNY 30.26 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.