000963 (Huadong Medicine Co Ltd) vs Shanghai Composite Comparison

000963

Shanghai Composite

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000963

Shanghai Composite

Difference

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000963

Shanghai Composite

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Compare the stock's returns with its benchmark index and competitors. Gain insights into its relative performance over time.

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Shanghai Composite

000963

MCK

COR

0HF3

CAH

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1Y 3Y 5Y 10Y 15Y 20Y

Compare the stock's returns with its benchmark index and competitors. Gain insights into its relative performance over time.

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Huadong Medicine Co Ltd
Glance View

Market Cap

57.5B CNY

Industry

Health Care

Huadong Medicine Co., Ltd., a key player in China's pharmaceutical landscape, was established with a vision to integrate research, development, manufacturing, and distribution of pharmaceutical products. The company operates a diverse portfolio comprising prescription medicines, over-the-counter products, and active pharmaceutical ingredients. Central to its strategy is a robust focus on innovation and quality, enabling it to effectively cater to various therapeutic areas, including oncology, endocrinology, and nephrology. Huadong Medicine benefits from its substantial investment in research and development, with state-of-the-art facilities that drive advancements and partnerships with global biotech firms, thereby underscoring its commitment to bringing cutting-edge medical solutions to the market. At the heart of Huadong Medicine’s business model is a well-coordinated infrastructure that seamlessly blends manufacturing excellence with a sophisticated distribution network. This dynamic framework ensures the efficient delivery of products across China and into international markets, supporting a significant revenue stream. Additionally, the company's active pharmaceutical ingredients (API) division forms a crucial component of its operations, supplying high-quality raw materials to both domestic and international pharmaceutical companies. By maintaining a strategic balance between product innovation and operational efficiency, Huadong Medicine not only sustains its competitive advantage but also continually scales its presence in the global pharmaceutical industry, carving out a prominent niche in an increasingly competitive arena.

View Huadong Medicine Co Ltd Analysis

Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

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CN		Shanghai Pharmaceuticals Holding Co Ltd SSE:601607	Add
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US		Mckesson Corp NYSE:MCK	Select
US		Cencora Inc NYSE:COR	Select
US	A	Amerisourcebergen Corp LSE:0HF3	Select
US		Cardinal Health Inc NYSE:CAH	Select
US		Henry Schein Inc NASDAQ:HSIC	Select
KR		Celltrion Healthcare Co Ltd KOSDAQ:091990	Select
CN		Sinopharm Group Co Ltd HKEX:1099	Select
CN		Shanghai Pharmaceuticals Holding Co Ltd SSE:601607	Select
IT		Amplifon SpA MIL:AMP	Select
DE	M	McKesson Europe AG XHAM:CLS1	Select

US		Mckesson Corp NYSE:MCK	Add
US		Cencora Inc NYSE:COR	Add
US	A	Amerisourcebergen Corp LSE:0HF3	Add
US		Cardinal Health Inc NYSE:CAH	Add
US		Henry Schein Inc NASDAQ:HSIC	Add
KR		Celltrion Healthcare Co Ltd KOSDAQ:091990	Add
CN		Sinopharm Group Co Ltd HKEX:1099	Add
CN		Shanghai Pharmaceuticals Holding Co Ltd SSE:601607	Add
IT		Amplifon SpA MIL:AMP	Add
DE	M	McKesson Europe AG XHAM:CLS1	Add

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LU		Tenaris SA MIL:TEN	Add
IN		Jio Financial Services Ltd NSE:JIOFIN	Add

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000963

vs

Shanghai Composite

Stocks Performance
000963 vs Shanghai Composite

Performance Gap
000963 vs Shanghai Composite

Performance By Year
000963 vs Shanghai Composite

Competitors Performance
Huadong Medicine Co Ltd vs Peers

Huadong Medicine Co Ltd
Glance View

Company

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000963 vs Shanghai Composite

Stocks Performance 000963 vs Shanghai Composite

Performance Gap 000963 vs Shanghai Composite

Performance By Year 000963 vs Shanghai Composite

Competitors Performance Huadong Medicine Co Ltd vs Peers

Huadong Medicine Co Ltd Glance View

Company

Help

Tools

Stocks

000963

vs

Shanghai Composite

Stocks Performance
000963 vs Shanghai Composite

Performance Gap
000963 vs Shanghai Composite

Performance By Year
000963 vs Shanghai Composite

Competitors Performance
Huadong Medicine Co Ltd vs Peers

Huadong Medicine Co Ltd
Glance View