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HK Equities · Finance research note

HKEX 0858 - Extrawell Pharmaceutical Holdings Ltd.

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Evidence and analysis

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2. Company Fundamentals

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* -17.90%
Risk / Std Dev (Ann.)* 63.98%
1-Year Price Return* -32.20%

Latest Market Data (as of 2026-08-14, Hong Kong time):

Metric Value
Last Price HK$0.079
52-Week Range HK$0.054 – HK$0.142
Observation Count 245 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year price series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in HK$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue HK$55.43M HK$59.10M
Net income Reported net income HK$222.64M HK$-162.95M
Total assets Year-end reported balance HK$1.53B HK$1.29B
Shareholders’ equity Year-end reported balance HK$1.33B HK$1.11B
Net margin Net income ÷ revenue 401.67% -275.73%
Asset turnover Revenue ÷ total assets 0.0363x 0.0459x
Equity multiplier Total assets ÷ shareholders’ equity 1.1437x 1.1564x
ROE Net margin × asset turnover × equity multiplier 16.68% -14.64%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue HK$55.43M
Prior annual revenue HK$59.10M
EBIT HK$246.83M
Tax rate 0.52%
NOPAT = EBIT × (1 − tax rate) HK$245.54M
Forecast start-growth basis -6.21%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT HK$245.54M
Add: depreciation & amortisation HK$8.28M
Less: capital expenditure -HK$3.07M
Less/(add): working-capital cash-flow movement -HK$4.16M
Current unlevered FCFF HK$246.60M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 -6.21% HK$230.30M HK$7.77M -HK$2.88M -HK$3.90M HK$231.29M HK$221.17M
2 -4.03% HK$221.02M HK$7.45M -HK$3.93M -HK$3.74M HK$220.79M HK$193.05M
3 -1.85% HK$216.92M HK$7.32M -HK$5.01M -HK$3.67M HK$215.55M HK$172.33M
4 0.32% HK$217.62M HK$7.34M -HK$6.18M -HK$3.69M HK$215.09M HK$157.23M
5 2.50% HK$223.06M HK$7.52M -HK$7.52M -HK$3.78M HK$219.28M HK$146.57M

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.02
Cost of equity 4.83%
Pre-tax cost of debt 16.92%
WACC 9.36%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value HK$3.27B
Implied terminal EV / EBITDA 14.13x
Terminal value as % of enterprise value 70.15%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF HK$890.35M
Present value of terminal value HK$2.09B
Indicated enterprise value HK$2.98B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value HK$2.98B
Less: gross interest-bearing debt HK$140.94M
Add: cash and equivalents HK$994.86M
Add: affiliate investments HK$0.00
Less: minority interests HK$257,000.00
Indicated common equity value HK$3.84B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 3,290,000,000.00
Share-count basis reported diluted weighted-average shares
Current market price HK$0.08
DCF indicative value per share HK$1.17
Indicative value vs. market price 1,357.76%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 2/4 evidenced checks
Lynch-inspired balance-and-growth checks 2/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 16:38:18.812660 UTC; latest reported fiscal period: 2025-03-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set Asia Pacific ex Japan
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-20 to 2026-06-30
Aligned daily observations 210
Minimum observation requirement 120
Currency conversion for HK listings HKD adjusted close divided by daily USD/HKD close before simple daily return calculation

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha -53.08% -51.75%
Adjusted R² 0.06 0.05
Annualised residual volatility 60.10% 59.94%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 1.34 (3.91) 1.38 (3.73)
Size (SMB) -0.48 (-0.95) -0.46 (-0.73)
Value (HML) 0.54 (1.14) 0.31 (0.58)
Profitability (RMW) NM -0.67 (-0.99)
Investment (CMA) NM 0.24 (0.31)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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