Citigroup: Sino Biopharm (01177) reported lower-than-expected profit last year, target price lowered to HK$10, rated as "buy"

Citigroup released a research report stating that SINO BIOPHARM (01177) saw a year-on-year increase in revenue of 10.3% to 31.8 billion RMB last year, which roughly met expectations. However, the net profit increased by 22% to 2.3 billion RMB, which was lower than market and the bank's expectations. The lower profit was attributed to impairment of intangible assets and the termination of non-core businesses and joint ventures, laying the foundation for future growth. The management expects to have 20 new products or new indications approved from 2026 to 2028, including M701 (CD3/EpCAM), TQB2101 (Her2/Her2 ADC), LM302 (CLDN18.2 ADC), etc. The bank has adjusted the revenue forecast for 2026 and 2027 by 3% and -1% respectively, and lowered the EPS forecast by 16% and 18% due to the expected increase in minority shareholder equity. The target price has been revised down from 10.8 HKD to 10 HKD, maintaining a "buy" rating.