CR Sanjiu Investment Quality Review (000999.SZ)

Data timestamp: 2026-08-03 22:12 UTC
Quality score: 80/100
Valuation position: current price/base FV 0.68
Final signal: WATCHLIST

Core Conclusion

CR Sanjiu is close to the price gate but remains watchlist rather than buy. Current price of CNY26.16 is 0.68x base FV of CNY38.74, but still above conservative FV of CNY22.38. The setup requires more evidence before upgrade.

Business Breakdown

Five-year revenue CAGR is 19.4%, with latest-year revenue of CNY31.60bn. The company benefits from branded OTC and healthcare demand, but pharma policy, integration, channel quality, and evidence depth prevent a more aggressive signal.

Business Quality

The 80/100 score reflects solid growth, acceptable capital returns, and strong cash conversion. Latest-year FCF was CNY4.24bn. Five-year average ROE was 15.7% and average ROIC was 13.5%, supporting watchlist status but requiring ongoing audit of growth quality.

Financial Audit

Fiscal 2025 revenue was CNY31.60bn, net profit CNY3.42bn, operating cash flow CNY5.51bn, capex CNY1.27bn, and FCF CNY4.24bn. Five-year FCF/net income was 1.01 and OCF/net income was 1.34. Latest net debt was CNY1.80bn, so leverage is a monitoring item but not the main rejection.

Valuation

The conservative case uses normalized FCF of CNY4.24bn, 2.0% growth, and 9.2x, producing CNY22.38 per share and a current price/FV ratio of 1.17. The base case uses 4.0% growth and 15.6x, producing CNY38.74 and a ratio of 0.68. The optimistic case uses 5.0% growth and 20.0x, producing CNY49.95 and a ratio of 0.52.

Buy And Tracking Discipline

The report keeps CR Sanjiu on the watchlist because base-case cheapness alone is not enough. Upgrade requires conservative-FV support, quality score at least 75, repeatable FCF, and stronger evidence on policy, channel, and capital allocation.

Risk Review

Risks include drug-pricing policy, product-mix deterioration, acquisition integration, receivables or inventory pressure, and capital allocation that fails to compound per share. Two periods of weak cash conversion or worsening debt would reduce FV.

Data Sources

The memo relies on public market and financial data, company filings or investor-relations materials, ChinaBond yield data, and public FX data where applicable. This is research only, not personalized investment advice.