Morgan Stanley downgrades TRAD CHI MED (00570) rating to "aligned with market" and cuts target price to HK$4.6.

Morgan Stanley has released a research report stating that the target price of TRAD CHI MED (00570) has been slightly reduced by 2.1%, from 4.7 Hong Kong dollars to 4.6 Hong Kong dollars. The profit forecast for the years 2024-2030 has been lowered by 3%-15%, mainly due to further price reductions in traditional Chinese medicine granules. The rating has been downgraded from "neutral" to "in line with market". Morgan Stanley pointed out that events in August to September (positive comments from management and progress on two prerequisites) have been driving TRAD CHI MED's stock price closer to the privatization offer of 4.6 Hong Kong dollars per share. Another risk is the deadline on October 18, where regulatory agencies must meet these two prerequisites for the privatization proposal to be realized. The recent increase in the stock price of TRAD CHI MED reflects investor confidence in the deal. Currently, the antitrust prerequisites are undergoing urgent review by the National Administration for Market Regulation.