Morgan Stanley: CSPC Pharma (01093) rated as "overweight", target price of 6.8 Hong Kong dollars.

Morgan Stanley released a research report stating that they have given CSPC PHARMA (01093) a "hold" rating with a target price of 6.8 Hong Kong dollars. The group previously issued a profit warning, indicating that fourth-quarter sales are expected to drop by 16% to approximately 6.56 billion yuan, in line with the bank's expectation of 6.76 billion yuan, while preliminary net profit is expected to drop by 63% to around 568 million yuan, lower than the bank's expectation of 811 million yuan. The bank stated that due to the decline in traditional drug prices in the Value-Based Purchasing (VBPs) channel, investors have largely anticipated a drop in profits, therefore they believe that this profit warning will not have a significant impact on its stock price. On a positive note, management has previously stated that sales of their drug NBP have shown a good quarterly recovery in the fourth quarter, and their new drug sales business contributed 2 billion yuan last year, with expectations to double this year.