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Assessing InSilico Medicine Cayman TopCo (SEHK:3696) Valuation After A Sharp 27.22% Weekly Share Price Move

Simply Wall St · 3d ago

InSilico Medicine Cayman TopCo (SEHK:3696), an AI-focused biotech drug developer, has attracted attention after a 27.2% move over the past week, prompting investors to reassess its recent share performance and underlying business profile.

See our latest analysis for InSilico Medicine Cayman TopCo.

The recent 27.22% 7 day share price return comes after a relatively muted year to date share price return of 1.49%. Momentum now looks to be picking up from a low base while the stock trades at HK$38.14.

If InSilico’s move has caught your attention, it could be a useful moment to widen the lens across other healthcare names using the healthcare stocks as a starting set of ideas.

With the shares now at HK$38.14 after a sharp weekly move, the key question is whether recent excitement still leaves room for mispricing or if the market is already factoring in the company’s future growth potential.

Price to Book of -4x, is it justified?

InSilico Medicine Cayman TopCo’s valuation flags start with its P/B of -4x, which sits against a last close of HK$38.14 and points to a very unusual balance sheet profile.

P/B compares a company’s market value to its net assets, so once shareholders’ equity turns negative, the ratio becomes less useful as a traditional yardstick and more a signal that liabilities exceed assets.

Here, the company reports negative shareholders’ equity and is currently unprofitable, so the P/B figure on its own does not give a clean read on whether the HK$38.14 price reflects too much optimism or not enough caution.

Against peers, the contrast is stark. InSilico’s -4x P/B sits against an Asian Healthcare Services industry average of 3.2x and a peer average of 11.8x, which underlines how different its capital structure and financial position are from more typical operators in the space.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-book of -4x (ABOUT RIGHT)

However, you are still looking at an early stage, loss making business with HK$53.601m in revenue, a HK$44.341m net loss, and negative equity.

Find out about the key risks to this InSilico Medicine Cayman TopCo narrative.

Build Your Own InSilico Medicine Cayman TopCo Narrative

If you see the data differently or prefer to test your own assumptions, you can pull the same metrics together in a few minutes and Do it your way

A great starting point for your InSilico Medicine Cayman TopCo research is our analysis highlighting 3 important warning signs that could impact your investment decision.

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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. Simply Wall St has no position in any stocks mentioned.