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<Research> G Sachs Cuts Sinopharm (01099.HK) TP to HKD19.07, Expects Gradual Revenue Recovery in Coming Quarters
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G Sachs published a research report stating that Sinopharm (01099.HK) recorded sales of approximately RMB140.4 billion in 1Q26, representing a slight YoY decline of 0.6%, marginally below the brokers expectations, mainly due to continued pressure in the industry environment. However, revenue trends have stabilized since 4Q24, and the broker expects a gradual recovery in the coming quarters, forecasting YoY sales changes of -0.1%, +0.3% and +0.9% for 2Q26, 3Q26 and 4Q26, respectively. During the period, gross margin further declined to 6.44%, reflecting the impact of the expanded scope of Volume-Based Procurement (VBP) and further price cuts under the National Reimbursement Drug List (NRDL), partially offset by stringent cost controls. Based on the results, G Sachs lowered its earnings forecasts for Sinopharm for 2026 to 2028 by 3.8%, 4.6% and 3.5%, respectively, to reflect a weaker-than-expected recovery in sales growth and more conservative assumptions on the cash conversion cycle. The TP was cut from HKD19.83 to HKD19.07, with a rating of Neutral. (hc/u) This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. Auto-translated by AI AASTOCKS Financial News |
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