[ET Net News Agency, 1 February 2018] Nomura initiated coverage on Shanghai
Pharmaceuticals (02607) with a "buy" rating and a target price of HK$33.6, based on 18x
FY2019 P/E given an 18.3% earnings CAGR from 2019-21.
The research house thinks the stock is severely undervalued, as: (1) incremental value
of Cardinal acquisition has not been factored in; and (2) the market has overreacted to
negative policies which have a relative small impact on the company.
It added that ipside potential lies in the company's ability to acquire good quality
assets from overseas. (KL)