[ET Net News Agency, 16 November 2018] HSBC Global Research lowered its target price
for Luye Pharma Group (02186) to HK$7.3 from HK$10 and maintained its "hold" rating.
The research house is concerned about Luye's reliance on Lipusu, which contributed 44%
of total revenue in 1H. Although the substitute for Lipusu, Paclitaxel for Injection
(Albumin Bound), is removed from the trial GPO (group purchasing organisation) list,
Lipusu may face serious pressure if competitors are willing to cut their prices in next
rounds of GPO. Beixi, another key product, is also facing GPO risks.
HSBC added that one of Luye's competitors has already passed the BE (bio-equivalence)
test and is eligible to enter the GPO scheme. In the medium to long-term, HSBC expects
pressure on Luye to gradually ease as it launches new products. (KL)