[ET Net News Agency, 7 December 2018] Credit Suisse lowered its target price for CSPC
Pharmaceutical (01093) to HK$11.4 from HK$20.8 and downgraded its rating to "underperform"
from "outperform".
The research house sees CSPC as one of the companies taking a long-term hit from the
Group Purchasing Organization (GPO). Generic drugs revenue still accounts for around 65%
of its total drug revenue. As more of its generic drugs and its competitors are passing
the BE (bioequivalent) test, all its drugs are likely to see significant price cuts.
Credit Suisse said the immediate impact of the tendering results is limited because it
wins three out of four drugs on the list, with an average price-cut of about 35% in the
initial results. However, there is further downside in the four drugs' prices as their
price-cuts are less than the average price-cut.
Credit Suisse cut its 2019/20 net profit forecasts by 5%/4% on slower sales growth and
lower gross margin. (KL)
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01093 CSPC PHARMA
Nominal 
6.500 -0.020 (-0.307%) Others
07/12/2018 17:45
[I-bank focus]CS downgrades CSPC Pharma (01093) to HK$11.4
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