[ET Net News Agency, 7 April 2020] Morgan Stanley lowered its target price for Fosun
Pharmaceutical (02196) to HK$29.5 from HK$30 and maintained its "equal-weight" rating.
The research house said Fosun Pharma's overall gross margin expanded 1.3ppt to 59.3%,
benefiting from good growth in high-margin products in the pharma segment (e.g.,
febuxostat, pivastatin and enoxaparin), and the ramp-up in the medical devices business.
Meanwhile, R&D expense increased 38% to Rmb2.0bn, representing 7.2% of total sales. As a
result, the operating margin was down 0.4ppt to 8.1%.
Management indicated that due to COVID-19, hospital patient traffic and surgery volume
slowed significantly in January-February, but March traffic started moving back to normal.
Morgan cut its 2020 earnings forecast to reflect this. (KL)