HK Stock Market Move | Guangzhou Baiyunshan Pharmaceutical Holdings (00874) falls more than 3% as second quarter performance is under pressure. Morgan Stanley lowers the company's profit forecast and target price.

Guangzhou Baiyunshan Pharmaceutical Holdings (00874) fell by more than 3%, dropping by 3.02% to 16.7 Hong Kong dollars with a trading volume of 2.9731 million Hong Kong dollars as of the time of writing. On the news front, Morgan Stanley released a research report stating that following Guangzhou Baiyunshan Pharmaceutical Holdings' second-quarter report, due to a decrease in sales and gross profit margin, the profit forecast for Guangzhou Baiyunshan Pharmaceutical Holdings for 2024-2030 was lowered by 3%-11%. Morgan Stanley also increased the days sales outstanding for the company. Therefore, Morgan Stanley lowered the target price of Guangzhou Baiyunshan Pharmaceutical Holdings by 14.6%, from 25.4 Hong Kong dollars to 21.7 Hong Kong dollars, while maintaining a "market-perform" rating. In the first half of this year, Guangzhou Baiyunshan Pharmaceutical Holdings achieved revenue of 41.04 billion yuan, a year-on-year increase of 2.7%; net profit attributable to the parent company was 2.55 billion yuan, a year-on-year decrease of 9.3%. It was estimated that in the second quarter, revenue was 18.1 billion yuan, a year-on-year decrease of 1.3%; net profit attributable to the parent company was 590 million yuan, a year-on-year decrease of 34.5%. It is worth noting that according to the Guangdong Provincial Commission for Discipline Inspection and Supervision, on August 30th, Li Chuyuan, former Secretary of the Party Committee and Chairman of Guangzhou Pharmaceutical Group Co., Ltd., is suspected of serious violations of discipline and law, and is currently undergoing disciplinary review and supervision investigation by the Guangdong Provincial Commission for Discipline Inspection and Supervision. It is reported that Guangzhou Pharmaceutical Group Co., Ltd. is the parent company of Guangzhou Baiyunshan Pharmaceutical Holdings, which is listed on the A-share market. Li Chuyuan previously served as the Chairman of Guangzhou Baiyunshan Pharmaceutical Holdings. On July 22nd of this year, Guangzhou Baiyunshan Pharmaceutical Holdings announced that Li Chuyuan resigned from the positions of Chairman of the 9th Board of Directors, Executive Director, and Chairman of the Board's Strategic Development and Investment Committee due to personal reasons.