BOCI Research: Maintains "Hold" rating on CSPC PHARMA (01093), lowers target price to 8.5 Hong Kong dollars.

China International Bank has released a research report stating that CSPC PHARMA (01093) is expected to achieve a 6% increase in revenue to 6.6 billion RMB in the third quarter of 2025, mainly due to the digestion of the negative impact on traditional oncology products. Sales in all core therapeutic areas have shown growth. However, net profit decreased by 10% to 964 million RMB, mainly due to a significant increase in operating expenses. The target price has been lowered to 8.5 Hong Kong dollars and a "Hold" rating is maintained. This target price corresponds to a price-earnings ratio of 20 times in 2026. CSPC PHARMA management maintains guidance that performance in the second half of 2025 will see a moderate recovery from the first half. However, due to uncertainties brought about by upcoming national bulk procurement renewals and strict control over medical insurance fund expenditures, despite the sales growth of innovative products (such as Bai Zi II, KN026) and biosimilars (such as Aumazumab and Patumuzumab) in the first half of 2026, management remains cautious about the domestic market outlook for 2026. Management emphasizes that internationalization is a key strategic focus to address domestic uncertainties. It is expected that research and development expenses will increase by 15% to 20% in 2026. Given that the third-quarter performance met expectations, China International Bank is basically maintaining its 2025 forecast unchanged. However, due to uncertainties in the first to eighth rounds of national bulk procurement and the possibility of slower sales growth for new products than expected, the bank has lowered its revenue forecasts for CSPC PHARMA in 2026 and 2027 by 5.8% and 8.5% respectively.