[ET Net News Agency, 2 May 2018] UBS Global Research lowered its target price for
Sinopharm Group (01099) to HK$40.15 from HK$42.5, and reiterated its "buy" rating.
The research house said Sinopharm reported 1Q result with revenue up 6.2% and earnings
down 32.7% vsersu UBS's expectation of low-teens earnings growth, mostly due to hike of
S,G&A expense as a result of network penetration in the two-invoice system environment.
UBS thinks the full year financials could remain under pressure, and it reduced its EPS
forecast by 8% to reflect the higher operating expense. Management reiterated its target
of achieving above-industry top line growth despite various pressures including loss of
in-direct sales. UBS sees higher OPEX ratio, but it thinks the worst is already reflected
in 1Q. (KL)