CMB International: CSPC PHARMA (01093) granted external authorization, could become a continuous revenue growth engine, maintains a "buy" rating.

CMB International released a research report stating that considering the weak performance of prescription drug sales in 2025, it has adjusted its earnings forecast for CSPC PHARMA (01093) and lowered its target price from HKD 13.93 to HKD 13.05. Valuation is based on discounted cash flow, maintaining a "buy" rating. CMB International expects the net profit of CSPC PHARMA to be RMB 5.706 billion, RMB 5.62 billion, and RMB 6.97 billion from 2026 to 2028, compared to RMB 3.876 billion in 2025. In 2025, the total revenue of CSPC Pharma decreased by 10.4% to RMB 26 billion, mainly affected by the volume-based procurement and prescription control. However, the core domestic sales have stabilized and are expected to trend steadily in 2026. Meanwhile, the company has transformed into a global innovative drug enterprise, continuously achieving external licensing transactions, which can serve as a continuous income growth engine. Benefiting from its differentiated pipeline, the bank expects the development of recurring business to drive long-term growth. The bank stated that after deducting licensing fee income, CSPC PHARMA's prescription drug sales in 2025 decreased by 20.8%, mainly affected by the continuous impact of hospital prescription control and volume-based procurement. However, prescription drug sales in the second half of the year rebounded by 4.9%, showing signs of bottoming out. With the easing of volume-based procurement pressure, domestic drug sales are expected to remain roughly stable in 2026. Sales expenses decreased significantly by 25.4% to RMB 6.5 billion year-on-year, reflecting a structural decrease in marketing intensity after volume-based procurement, while research and development expenses increased by 12% to RMB 5.8 billion year-on-year.