MeritValue

Adagene Inc.

ADAGdata completeness 100%8 fiscal years on file
The thesis, from the filings

Adagene Inc. earns about -57% on equity, but has diluted owners by 18% over 5 years — worth asking whether the growth reaches owners. The cash-flow models don't apply cleanly here — the ledger says why below.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$10.2M1$9.29M2$18.1M3$103,2043$7.67M3
Net income−$73.2M4−$80M5−$18.9M6−$33.4M6−$17.6M6
Operating cash flow−$43.4M7−$48.6M8−$28.5M9−$29.7M9−$15.7M9
Capital expenditure$2.51M10$690,93811$85,01212$33,58012$17,05312
Free cash flow (derived)−$45.9M7−$49.3M8−$28.5M9−$29.7M9−$15.7M9
Total debt$8.87M13$30.6M14$26.1M15$31.1M16$6.83M16
Cash & equivalents$174.4M17$143.8M18$109.9M19$85.2M20$74.5M20
Diluted shares50.0M54.1M54.7M56.3M59.0M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$5.99
your share of equity
Profit it earned you last year
−$2.98
Free cash flow it threw off
−$2.66
Debt you’d be carrying
$1.16

10 shares is a claim on $5.99 of net worth that earned you −$2.98 and generated −$2.66 of cash last year, against $1.16 of debt.

iii. Is this a good business?
Moat signal · return on equity
-57% avg · 5y
FY21 -47%FY22 -96%FY23 -27%FY24 -66%FY25 -50%

It earned an average -57% on equity over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+18% shares · 5y

Share count is up 18% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has fallen 23% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 20-F · period ending 2021-12-31 · accession 0001104659-24-041109 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 20-F · period ending 2022-12-31 · accession 0001410578-25-000419 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 20-F · period ending 2023-12-31 · accession 0001104659-26-038612 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 20-F · period ending 2021-12-31 · accession 0001104659-24-041109 (NetIncomeLoss)
  5. 20-F · period ending 2022-12-31 · accession 0001410578-25-000419 (NetIncomeLoss)
  6. 20-F · period ending 2023-12-31 · accession 0001104659-26-038612 (NetIncomeLoss)
  7. 20-F · period ending 2021-12-31 · accession 0001104659-24-041109 (NetCashProvidedByUsedInOperatingActivities)
  8. 20-F · period ending 2022-12-31 · accession 0001410578-25-000419 (NetCashProvidedByUsedInOperatingActivities)
  9. 20-F · period ending 2023-12-31 · accession 0001104659-26-038612 (NetCashProvidedByUsedInOperatingActivities)
  10. 20-F · period ending 2021-12-31 · accession 0001104659-24-041109 (PaymentsToAcquireProductiveAssets)
  11. 20-F · period ending 2022-12-31 · accession 0001410578-25-000419 (PaymentsToAcquireProductiveAssets)
  12. 20-F · period ending 2023-12-31 · accession 0001104659-26-038612 (PaymentsToAcquireProductiveAssets)
  13. 20-F · period ending 2021-12-31 · accession 0001104659-23-052043 (LongTermDebtNoncurrent)
  14. 20-F · period ending 2022-12-31 · accession 0001104659-24-041109 (LongTermDebtNoncurrent)
  15. 20-F · period ending 2023-12-31 · accession 0001410578-25-000419 (LongTermDebtNoncurrent)
  16. 20-F · period ending 2024-12-31 · accession 0001104659-26-038612 (LongTermDebtNoncurrent)
  17. 20-F · period ending 2021-12-31 · accession 0001104659-23-052043 (CashAndCashEquivalentsAtCarryingValue)
  18. 20-F · period ending 2022-12-31 · accession 0001104659-24-041109 (CashAndCashEquivalentsAtCarryingValue)
  19. 20-F · period ending 2023-12-31 · accession 0001410578-25-000419 (CashAndCashEquivalentsAtCarryingValue)
  20. 20-F · period ending 2024-12-31 · accession 0001104659-26-038612 (CashAndCashEquivalentsAtCarryingValue)