Consun Pharmaceutical released its FY 24 results on March 26, 2025, reporting 14.6% y/y increase in revenue to CNY2,967m. This growth was driven by policy support, market demand, and technological innovation. Operating income surged 18% to CNY975m, with margin expanding by 96bp to 32.9% in FY 24. Net profit increased 15.9% y/y to CNY910m. Notably, management declared a dividend of CNY0.6 per share, reflecting a yield of 7.3%.
Founded in 1997 and headquartered in Guangzhou, China, Consun Pharmaceutical Group specializes in the manufacturing and sales of pharmaceutical products, including kidney medicines, gynecology and pediatrics medicines, contrast medium, orthopedics medicines, dermatologic medicines, hepatobiliary medicines, and others. The company, which has over 3,150 employees, is listed on the Hong Kong Stock Exchange.
Consun operates primarily in two segments: the Consun pharmaceutical segment, which contributes 85% of the FY 24 sales mix and manufactures and sells modern Chinese medicines; and the Yulin segment, which contributes 15% and manufactures and sells traditional Chinese medicines.
Strategic expansion and innovation
As Consun Pharmaceutical Group looks ahead, it remains optimistic in its commitment to its core businesses. The company plans to optimize resource allocation and enhance operational efficiency, aiming for breakthroughs in key areas and segments. In the fiercely competitive market, Consun is determined to secure a favorable position through precise market analysis and flexible strategic adjustments. To maintain its edge, the group will significantly increase its investment in research and development, promoting technological innovation to ensure the market leadership of its products and services. In FY 21, the company allocated CNY102.2m to R&D investment and increased it to CNY108.5m in FY 23, reflecting 4.2% of the revenue. However, R&D saw a slight moderation to CNY97.5m in FY 24, representing 3.3% of the sales.
In 2025, Consun will take further steps to improve its compliance management system. The company is dedicated to ensuring that every business activity adheres to laws, regulations, and industry standards. Through regular compliance training and stringent internal audits, Consun will enhance the compliance awareness of all employees, ensuring the transparency and standardization of its operations. With these strategic initiatives, Consun Pharmaceutical Group is poised to navigate the challenges of the market and continue its trajectory of growth and success.
Improvement in leverage levels
Consun experienced steady revenue growth over the last three years (FY21-24), posting a CAGR of 13.3% to reach CNY2,967m in FY 24. This growth was driven by the strong performance of its pharmaceutical segment, market demand and technological innovation. Net profit grew at a higher CAGR of 15.5%, reaching CNY910m, with margins expanding in FY 24 to 30.7% from 28.9% in FY 21.
Cash from operations rose about 50% over the same period to CNY1,087m in FY 24 from CNY726m in FY 21. As a result, cash reserves increased from CNY2,430m to CNY3,865m as of end-FY 24. Moreover, total debt decreased from CNY611m to CNY253m, leading to an improvement in gearing ratio from 21% to 6% over the same period.
In comparison, the company’s peer, Shenzhen Salubris Pharmaceuticals co., ltd., experienced a lower revenue CAGR of 9.5% over the last three years, reaching CNY4,010m in FY 24. Net income rose at a CAGR of 4% to CNY602m in FY 24.
Looking ahead, analysts project Consun's revenue to grow at a CAGR of 11.9% over FY 24-26 to CNY3,716, and EBIT to grow at a CAGR of 14.9% to CNY1,252m, with margin expansion to 33.7%. Net profit is expected to grow at a CAGR of 13.1% to CNY1,164m, with margin expansion to 31.3% Moreover, the dividend yield is expected to increase to around 8% in FY26 from 7% in FY 24.
Expansion supporting share's surge
Over the past 12 months, Consun’s stock has delivered impressive returns of approximately 45%, driven mainly by revenue growth due to expanding product markets and a developing sales network across China. In comparison, Shenzhen experienced lower returns of approximately 24% over the same period.
Consun is currently trading at a P/E of 6.8x, much lower than Shenzhen’s P/E of 62.5x, but higher than Consun’s three-year historical average of 5.2x. In terms of EV/EBIT, the company is currently trading at 4x, based on the FY 25 estimated EBIT of CNY1,092m, which is higher than its three-year historical average of 2.2x.
Consun has a limited coverage of only two analysts. However, both have “Outperform” ratings for the stock for an average target price of CNY11.2, implying 29% upside potential from the current price.
Overall, Consun's FY 24 financial results reflect strong growth, driven by policy support, market demand, and technological innovation. The company plans to optimize resource allocation, enhance operational efficiency, and increase investment in research and development. However, the company remains exposed to several risks, including credit risk, liquidity risk, and market risks such as exchange rate risk, interest rate risk, and price risk.
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