Breaking Down Jilin Aodong Pharmaceutical Group Co., Ltd. Financial Health: Key Insights for Investors

Dive into Jilin Aodong Pharmaceutical Group's current picture: first-half 2025 revenue fell to CNY 1,126.38 million (down 20.3% year-over-year) with TTM revenue at CNY 2,325 million (a 29.06% decline), while annual revenue slid to CNY 2.61 billion in 2024 from CNY 3.45 billion in 2023; profitability shows a striking net profit margin of 59.43% and TTM EPS of CNY 2.18, yet asset efficiency flags with ROA at -0.28% and ROIC at -0.29; the balance sheet is conservatively geared (debt-to-equity 0.07, total liabilities CNY 3.897 billion against shareholders' equity CNY 28.999 billion and total assets near CNY 33.00 billion), liquidity appears solid (current ratio 2.14, quick ratio 1.76) even as interest coverage sits at -2.91; valuation metrics paint a mixed signal-P/E of 9.59, P/B 0.80, P/S 10.47, but eyebrow-raising EV/EBITDA of 285.11 and EV/FCF of 185.63-while market cap is CNY 24.51 billion and enterprise value CNY 23.90 billion, and growth levers include a portfolio of 300+ formulations, three industrial bases, and national recognitions that underscore why investors should read on.

Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) - Revenue Analysis

• H1 2025 revenue: CNY 1,126.38 million (down 20.3% vs H1 2024: CNY 1,411.74 million)
• TTM revenue as of 30 Jun 2025: CNY 2,325 million (down 29.06% vs prior TTM: CNY 3,449 million)
• 2024 full-year revenue: CNY 2.61 billion (down 24.31% vs 2023: CNY 3.45 billion)
• Quarter ending 30 Jun 2025 revenue: CNY 503.75 million (down 8.48% vs prior quarter)
• Revenue per share (latest quarter): CNY 0.44
• Revenue per employee: ~CNY 426,333 (total employees: 5,745)

• Revenue concentration and productivity metrics: with 5,745 employees and revenue per employee of ~CNY 426,333, operational efficiency trends should be monitored alongside margins.
• Per-share revenue signal: CNY 0.44 per share for the latest quarter provides a simple top-line lens for equity valuation comparisons.
• Short-term momentum: sequential quarter decline of 8.48% suggests demand softness or timing effects in product deliveries; TTM decline of 29.06% highlights a sustained downtrend over the past year.

Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) Profitability Metrics

• Net Profit Margin (TTM): 59.43% - indicates exceptionally high profitability relative to sales.
• Operating Margin: 15% - the percentage of revenue remaining after operating expenses.
• Earnings Per Share (EPS, TTM): CNY 2.18 - the profit allocated to each outstanding share.

• Contrast: The combination of a 59.43% net margin and a 15% operating margin suggests non-operating gains, tax items, or accounting effects materially boosting net income relative to operating profit.
• Capital efficiency concerns: Negative ROA and ROIC alongside a positive ROE point to potential balance sheet or leverage dynamics that warrant deeper analysis of asset valuations and interest/financing structure.
• Investor focus areas: reconciliations between operating income and net income, one-off items in the TTM period, asset impairment or write-offs, and the company's capital allocation strategy.

Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) - Debt vs. Equity Structure

• Debt-to-equity ratio: 0.07 (7%) - low leverage relative to equity base.
• Total debt-to-equity ratio: 7.49% - indicates conservative use of debt in the capital mix.
• Interest coverage ratio: -2.91 - operating earnings are insufficient to cover interest expense, a potential red flag for profitability vs. financing costs.

• Balance sheet strength: large equity base (CNY 28.999B) versus modest liabilities (CNY 3.897B) supports a low leverage profile.
• Valuation context: EV (CNY 23.90B) is slightly below market cap (CNY 24.51B), reflecting low net debt or net cash position implied by the balance sheet.
• Profitability risk: negative interest coverage (-2.91) implies operating results are not covering interest - monitor earnings recovery or non-operating items driving the shortfall.

Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) - Liquidity and Solvency

• Current ratio: 2.14 - indicates the company holds CNY 2.14 of short-term assets for every CNY 1.00 of short-term liabilities.
• Quick ratio: 1.76 - shows adequate ability to meet immediate obligations without relying on inventory conversion.
• Recent profitability trend: robust year-over-year net income growth across quarterly and half-year reporting in 2024-2025, supporting debt-servicing capacity.

• Liquidity interpretation: Ratios above 1.5 suggest comfortable short-term coverage; Aodong's 2.14/1.76 point to low near-term liquidity risk.
• Profitability impact on solvency: Net income increased materially - Q1 2025 vs Q1 2024 (CNY 516.84M vs CNY 143.67M) and H1 2025 vs H1 2024 (CNY 1,281.54M vs CNY 537.46M) - enhancing retained earnings and internal funding for operations or debt reduction.
• Monitoring items: consistency of cash conversion, working capital trends, and full-year reconciliation of 9M and FY figures relative to seasonal patterns.

Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) - Valuation Analysis

• Market capitalization: CNY 24.51 billion
• Enterprise value (EV): CNY 23.90 billion
• Trailing P/E ratio: 9.59
• Price-to-Sales (P/S): 10.47
• Price-to-Book (P/B): 0.80
• EV/EBITDA: 285.11
• EV/Free Cash Flow (EV/FCF): 185.63

The mix of valuation metrics for Jilin Aodong Pharmaceutical shows contrasting signals: a relatively low trailing P/E and sub-1 P/B point toward possible undervaluation on earnings and book value, while very high EV/EBITDA and EV/FCF ratios imply the enterprise value is large relative to cash earnings and free cash flow. The P/S at 10.47 indicates investors are assigning strong value per unit of revenue.

• Interpretation pointers investors typically consider:
• Low P/E (9.59) + P/B below 1 (0.80) can indicate value if earnings and book value are sustainable.
• Very high EV/EBITDA (285.11) and EV/FCF (185.63) warrant investigation into one-off items, non-cash charges, or extremely low EBITDA/FCF in the period used for calculation.
• P/S at 10.47 suggests revenue is being priced richly-compare to peer group and historical P/S to contextualize.

For broader context on strategy, operations and ownership that may affect valuation interpretation see: Jilin Aodong Pharmaceutical Group Co., Ltd.: History, Ownership, Mission, How It Works & Makes Money

Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) - Risk Factors

• Unusually high net profit margin: 59.43% vs. typical industry averages far lower - raises red flags about one-off gains, accounting treatment, or non-recurring items inflating profitability.
• Negative operational returns: ROA at -0.28% and ROIC at -0.29% signal the company is not converting assets or invested capital into positive operating profit.
• Interest coverage shortfall: interest coverage ratio of -2.91 indicates EBIT (or operating earnings) is insufficient to meet interest expenses, suggesting liquidity or sustainability stress under adverse conditions.
• Low leverage profile: debt-to-equity ratio of 0.07 shows very low financial leverage, which moderates solvency risk but may reflect underinvestment or high equity base.
• Recent earnings volatility: net income jumped to CNY 516.84 million in Q1 2025 from CNY 143.67 million in Q1 2024 - a large year-over-year swing that warrants scrutiny of drivers (e.g., non-recurring gains, asset disposals, government subsidies, or real operating improvement).

• Disaggregate Q1 2025 net income to identify recurring vs. non-recurring components (asset sales, tax items, subsidies, fair-value gains).
• Reconcile the high net profit margin with negative ROA/ROIC - check margin drivers: gross margin, operating expenses, one-off items, accounting policies.
• Assess cash flow health (operating cash flow, free cash flow) to confirm earnings quality given negative interest coverage.
• Review related-party transactions, inventory/write-downs, R&D capitalization, and revenue recognition policies for signs of earnings management.
• Monitor leverage strategy: low debt-to-equity reduces bankruptcy risk but may limit growth; evaluate management's capital allocation plans.
• Compare across peers and industry averages to contextualize these anomalies and validate valuation assumptions.

Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) - Growth Opportunities

• Product breadth: more than 300 formulations spanning innovative therapies and traditional Chinese remedies, enabling multiple revenue streams and lower single-product concentration risk.
• Market credibility: ranked among China's top 100 pharmaceutical companies for over ten consecutive years, supporting commercial reach and partner access.
• Manufacturing scale: three modern industrial bases (Dunhua City, Yanji City, Taonan City) forming a cluster that can improve manufacturing efficiencies and throughput.

• R&D and pipeline leverage: active pharmaceutical R&D offers upside through new formulations, reformulations of traditional remedies, and potential innovative therapy launches that can improve product mix and margins.
• Manufacturing cluster synergies: three bases allow capacity scaling, potential cost reductions via shared logistics, and faster commercialization of new products.
• Diversified income sources: alongside pharma manufacturing and R&D, the company operates vehicle rental services and self‑owned real estate, which can stabilize cash flows during cyclical downturns in pharma sales.
• Brand and policy support: recognition as a Time‑Honored Brand and inclusion in national high‑tech initiatives may provide preferential access to government procurement, subsidies, or cooperative programs.
• Top‑100 positioning: sustained ranking increases bargaining power with distributors, hospitals, and potential partners for co‑development or licensing.

• Upgrade and expand capacity at existing industrial bases to meet domestic and export demand.
• Accelerate R&D commercialization-prioritize high-margin innovative therapies and scalable TCM (traditional Chinese medicine) formulations.
• Pursue targeted M&A or JV to fill pipeline gaps, access novel technologies, or expand geographic distribution.
• Monetize non-core assets (real estate, vehicle rental) to fund R&D or capacity expansion without diluting equity.
• Leverage brand recognition and National Torch Plan status to secure research grants and preferential procurement opportunities.