Yamato: Downgrade SINOPHARM (01099) to "outperform the market" rating, target price lowered to HKD 22.

Daiwa released a research report stating that it has downgraded its rating on SINOPHARM (01099) from "buy" to "outperform the market" due to limited growth visibility and varying domestic policy impacts. At the same time, it has lowered its revenue forecasts for 2024 and 2025 by 8% and 11% respectively, implying flat or 6% year-on-year growth, with the target price lowered from 26 Hong Kong dollars to 22 Hong Kong dollars. The bank noted that it maintains a cautious stance on the sales of the pharmaceutical and retail pharmacy businesses of Sinopharm in the fourth quarter of 2024, with overall group revenue and net profit expected to increase by 2% and decrease by 9% year-on-year, reaching 153 billion yuan and 2.7 billion yuan, respectively. For 2025, the new management may focus on expanding profit margins for CKH HOLDINGS.