Lyon: Reiterates "Outperform" rating on CSPC PHARMA (01093) with a target price of HKD 9.1.

Lyon released a research report stating that CSPC PHARMA (01093) has significantly strengthened its dividend policy since 2023, making it one of the few domestic pharmaceutical companies with a large amount of passive cash return. The bank reiterated its "outperform market" rating for CSPC PHARMA, with a target price of 9.1 Hong Kong dollars, and remains positive about its long-term growth prospects. The report stated that CSPC PHARMA announced that the company will repurchase up to 5 billion yuan of shares on the market within the next 24 months, depending on market conditions. Lyon's report stated that CSPC PHARMA announced a plan to repurchase up to 5 billion yuan of shares in the next 24 months, based on the current 1 billion yuan stock buy-back plan, the company has repurchased 1.0578 billion yuan of shares since the beginning of the year, accounting for 2.1% of its issued shares. The bank pointed out that as of the end of June this year, CSPC PHARMA held net cash and cash equivalents of 12.5 billion yuan, which should be enough to support its buyback plan. The company increased its dividend payout ratio from around 30% in previous years to 46.4% in 2023 and will maintain this commitment. In the first half of 2024, CSPC PHARMA also announced its first interim dividend, representing 50.6% of interim profits. The stock currently yields a dividend return of 6.6% for the 2025 fiscal year.