[ET Net News Agency, 3 April 2020] Huatai Research cut its target price for Sinopharm
Group (01099) to HK$23.84 from HK$34.65 and maintained its "buy" rating.
The research house said Sinopharm's 2019 results miss. Huatai cut 2020/21 EPS forecasts
by 8%/7% to HK$2.62/HK$2.95, given slower industry growth amid COVID-19 and negative
impact of a pandemic on hospital rebate recognition in 1Q.
Huatai anticipates revenue growth to moderate in 2020, given low recognition of rebates
in 1Q (net profit declined by 50% in the first two months of 2020). However, Huatai
expects its market share to increase in 2020, given its exclusive delivery rights for
certain bidding varieties in national GPO, and top-ranking (by revenue market share in
2019) in 19 provinces, with expansion in Anhui/Guizhou via M&A. (KL)