[ET Net News Agency, 6 June 2018] HSBC Global Research raised its target price for CSPC
Pharmaceutical Group (01093) to HK$28.6 from HK$24.6, and retained its "buy" rating.
The research house said favorable policies boost CSPC's finished drug business in 1Q
2018. In 2017, three innovative drugs of CSPC, including NBP injection, Jinyouli and
Nuolining, were newly included into the new National Drug Reimbursement List (NDRL).
Following the implementation of the new NDRL, HSBC expects these inclusions to expand from
the current 17 provincial DRLs to nationwide gradually.
Furthermore, the merger of urban and rural basic medical insurance plans and the
implementation of the tiered diagnosis and treatment system may further unleash grass-root
medical demand, expanding CSPC's finished drug business to the rural market.
Thanks to these policies, HSBC expects sales of innovative and generic drugs to reach
HK$6.4bn and HK$6.7bn with CAGRs of 33% and 11% over 2018-20, respectively. The research
house also lifted its 2018-20 net profit estimates by 11%, 12.6% and 13% to HK$3.8bn,
HK$4.8bn and HK$6bn based on improving margins. (KL)