RemeGen (HKG:9995) Is Posting Healthy Earnings, But It Is Not All Good News

Simply Wall St.04-04

After announcing healthy earnings, RemeGen Co., Ltd.'s (HKG:9995) stock rose over the last week. Despite the strong profit numbers, we believe that there are some deeper issues which investors should...

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Despite the strong profit numbers, we believe that there are some deeper issues which investors should...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/pharmaceuticals-biotech/hkg-9995/remegen-shares/news/remegen-hkg9995-is-posting-healthy-earnings-but-it-is-not-al\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>RemeGen (HKG:9995) Is Posting Healthy Earnings, But It Is Not All Good News</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nRemeGen (HKG:9995) Is Posting Healthy Earnings, But It Is Not All Good News\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-04-04 06:42 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/hk/pharmaceuticals-biotech/hkg-9995/remegen-shares/news/remegen-hkg9995-is-posting-healthy-earnings-but-it-is-not-al><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>After announcing healthy earnings, RemeGen Co., Ltd.'s (HKG:9995) stock rose over the last week.  Despite the strong profit numbers, we believe that there are some deeper issues which investors should...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/pharmaceuticals-biotech/hkg-9995/remegen-shares/news/remegen-hkg9995-is-posting-healthy-earnings-but-it-is-not-al\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"09995","symbol_name":"荣昌生物","start_time":0,"source_url":"https://simplywall.st/stocks/hk/pharmaceuticals-biotech/hkg-9995/remegen-shares/news/remegen-hkg9995-is-posting-healthy-earnings-but-it-is-not-al","article_id":"2624169823","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/6111000-choice1-main-header/1585186710114"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/hk/pharmaceuticals-biotech/hkg-9995/remegen-shares/news/remegen-hkg9995-is-posting-healthy-earnings-but-it-is-not-al","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2624169823","pubTimestamp":1775256139,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"After announcing healthy earnings, RemeGen Co., Ltd.'s ( HKG:9995 ) stock rose over the last week. Despite the strong...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"09995":"荣昌生物"},"translate_title":"RemeGen(HKG：9995)公布了健康的盈利，但这并不全是好消息","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"09995":1.5},"content_text":"After announcing healthy earnings, RemeGen Co., Ltd.'s (HKG:9995) stock rose over the last week.  Despite the strong profit numbers, we believe that there are some deeper issues which investors should look into.    Trump has pledged to \"unleash\" American oil and gas and these 15 US stocks have developments that are poised to benefit.SEHK:9995 Earnings and Revenue History April 3rd 2026 Advertisement Zooming In On RemeGen's Earnings  One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period.  You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'.  Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive.  That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high.  Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking.  For the year to December 2025, RemeGen had an accrual ratio of 0.24.   We can therefore deduce that its free cash flow fell well short of covering its statutory profit.    In the last twelve months it actually had negative free cash flow, with an outflow of CN¥147m despite its profit of CN¥709.6m, mentioned above.    We also note that RemeGen's free cash flow was actually negative last year as well, so we could understand if shareholders were bothered by its outflow of CN¥147m.     Having said that, there is more to the story.  We can see that unusual items have impacted its statutory profit, and therefore the accrual ratio.     The good news for shareholders is that RemeGen's accrual ratio was much better last year, so this year's poor reading might simply be a case of a short term mismatch between profit and FCF.  Shareholders should look for improved cashflow relative to profit in the current year, if that is indeed the case.   See our latest analysis for RemeGen  That might leave you wondering what analysts are forecasting in terms of future profitability.  Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.   The Impact Of Unusual Items On Profit  The fact that the company had unusual items boosting profit by CN¥634m, in the last year, probably goes some way to explain why its accrual ratio was so weak.   While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm.  When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year.  Which is hardly surprising, given the name.   We can see that RemeGen's positive unusual items were quite significant relative to its profit in the year to December 2025.  As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.    Our Take On RemeGen's Profit Performance RemeGen had a weak accrual ratio, but its profit did receive a boost from unusual items.       Considering all this we'd argue RemeGen's profits probably give an overly generous impression of its sustainable level of profitability.     If you'd like to know more about RemeGen as a business, it's important to be aware of any risks it's facing.    For example, we've found that RemeGen has 2 warning signs (1 is a bit unpleasant!) that deserve your attention before going any further with your analysis.   In this article we've looked at a number of factors that can impair the utility of profit numbers, and we've come away cautious.   But there are plenty of other ways to inform your opinion of a company.  Some people consider a high return on equity to be a good sign of a quality business.  So you may wish to see this free  collection of companies boasting high return on equity, or  this list of stocks with high insider ownership. New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. 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