Morgan Stanley: Maintains "Market Perform" rating on Shenzhen Hepalink Pharmaceutical Group (09989) with a target price lowered to HK$3.5

Morgan Stanley released a research report stating that the target price of Shenzhen Hepalink Pharmaceutical Group (09989) was lowered from 3.7 Hong Kong dollars to 3.5 Hong Kong dollars, with a target decline of 5.4%. The basic assumption is that the compound annual growth rates (CAGR) of revenue and recurring profit of the company between 2022-2025 will decrease by 7% and 5% respectively, and the rating of "in sync with the market" will be maintained. Morgan Stanley pointed out that based on the performance of Shenzhen Hepalink Pharmaceutical Group in the second quarter of 2024, the profit forecast for the company in 2024 was raised by 7%, but the profit forecast for 2025-2030 was lowered by 6%, mainly due to a decline in API business and sales revenue; lower gross profit margin; lower operating expenses. The investment income from HighTide in 2024 is included. The target price and scenario valuation of the company were lowered by 4-8%.