MeritValue

Zai Lab Ltd

ZLABdata completeness 100%11 fiscal years on file
The thesis, from the filings

Zai Lab Ltd earns about -1121% on invested capital, 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$144.1M1$212.7M2$266.7M3$397.6M3$457.2M3
Net income−$704.5M4−$443.3M5−$334.6M6−$257.1M6−$175.5M6
Operating cash flow−$549.2M7−$367.6M8−$198.2M9−$214.9M9−$150.8M9
Capital expenditure$18.3M10$24.6M11$7.21M12$5.66M12$8.1M12
Free cash flow (derived)−$567.5M7−$392.2M8−$205.4M9−$220.5M9−$158.9M9
Total debt——$013$131.7M14$204.5M14
Cash & equivalents$964.1M15$1.01B15$790.2M16$449.7M17$679.6M17
Diluted shares929.9M958.1M966.4M989.5M1.10B

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
$6.53
your share of equity
Profit it earned you last year
−$1.6
Free cash flow it threw off
−$1.45
Debt you’d be carrying
$1.87

10 shares is a claim on $6.53 of net worth that earned you −$1.6 and generated −$1.45 of cash last year, against $1.87 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
-1121% avg · 5y
FY21 -134%FY22 -943%FY23 -4430%FY24 -38%FY25 -59%

It earned an average -1121% on invested capital 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.

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. 10-K · period ending 2021-12-31 · accession 0001628280-24-007235 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001628280-25-008409 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001704292-26-000015 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001628280-24-007235 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001628280-25-008409 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001704292-26-000015 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001628280-24-007235 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001628280-25-008409 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001704292-26-000015 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001628280-24-007235 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001628280-25-008409 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001704292-26-000015 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2023-12-31 · accession 0001628280-25-008409 (ShortTermBorrowings)
  14. 10-K · period ending 2024-12-31 · accession 0001704292-26-000015 (ShortTermBorrowings)
  15. 10-K · period ending 2021-12-31 · accession 0001628280-24-007235 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2023-12-31 · accession 0001628280-25-008409 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2024-12-31 · accession 0001704292-26-000015 (CashAndCashEquivalentsAtCarryingValue)