Morgan Stanley: Update CSPC PHARMA (01093) risk-return assessment, target price lowered to 10.4 Hong Kong dollars.

Morgan Stanley has issued a research report stating that it is predicting that CSPC PHARMA (01093) will see a 5% and 7% increase in sales and net profit in 2026, respectively. With the market recognition of new products, the growth is expected to accelerate to 6% and 10% in 2027. In addition, Morgan Stanley has conservatively lowered the group's terminal growth rate from 4% to 3.5%, resulting in a discounted cash flow target price of HK$10.4 (originally HK$11) and a rating of "hold". Morgan Stanley has updated its risk-return evaluation of CSPC PHARMA and has factored in third-quarter performance, lowering sales forecasts for 2025 and 2026 by 1% and 2%, respectively, while maintaining the sales forecast for 2027. Operating expenses have also been adjusted based on management guidance and observed trends. Therefore, the forecasted net profit for the same period has been lowered by 4%, 4%, and maintained.