CR Sanjiu Investment Quality Review (000999.SZ)

Quality score: 80/100 Valuation position: current price/base FV 0.65 Final signal: WATCHLIST

Core Conclusion

CR Sanjiu is WATCHLIST despite price/base FV of 0.65. The base-case valuation is attractive, but the report still requires stronger evidence around conservative FV, business durability, and mispricing before upgrading. Current price is CNY24.99 versus conservative/base FV of CNY22.38/CNY38.74.

Business And Quality

Five-year revenue CAGR is 19.4% and latest-year FCF is CNY4.24bn. Quality score is 80/100, supported by growth and cash conversion, while net debt and healthcare execution evidence keep the conclusion below BUY.

Financial Audit

The review uses fiscal 2021-2025 in CNY. Five-year average FCF/Net Income is 1.01 and OCF/Net Income is 1.34. Latest net debt is CNY1.80bn. Market value is about CNY41.59bn on roughly 1.664bn shares.

Valuation

The valuation uses normalized FCF, a 1.7% CNY 10Y government yield dated 2026-07-27, and a separate balance-sheet adjustment. Price/base FV is below 0.70, but conservative FV sits below current price, so the report does not treat downside protection as strong enough for BUY.

Buy And Monitor

Current action is watchlist. Upgrade requires price/base FV below 0.70, quality score at least 75, better evidence of temporary mispricing, and stronger validation of conservative FV. Track revenue trend, FCF/Net Income, ROIC, net debt, dividends, buybacks, and governance disclosure.

Risks

Risks include product-cycle pressure, policy or pricing pressure, acquisition integration, weaker FCF repeatability, and balance-sheet deterioration. Two periods of FCF/Net Income below 0.60 would require a lower normalized FCF.

Sources

Sources are public quote and financial data platforms, official filings or company IR, and ChinaBond for the CNY risk-free rate. Research only, not personalized investment advice.