Lyon: Maintaining a "outperform" rating on CHINARES PHARMA (03320), with target price increased to HKD 7.2.

Lyon issued a research report stating that it maintains a "outperform the market" rating for Chinare Pharma (03320), considering the company's performance last year. Lyon has raised the revenue forecasts for Chinare Pharma in 2026 and 2027 by 4.1% and 4.8%, respectively, and the net profit forecasts by 22.6% and 15%. The target price has been raised from HKD 5.6 to HKD 7.2. Chinare Pharma's performance last year exceeded expectations, with a year-on-year revenue growth of 4.6% to RMB 26.9574 billion, and a net profit growth of 20.7% to RMB 4.05 billion, both higher than market expectations. This was mainly due to the strong performance of the pharmaceutical business, good control of operating expenses, and a decrease in financing costs. The gross profit margin and net profit margin for the year increased by 0.7 and 0.2 percentage points, to 16.5% and 1.5%. The company declared a total dividend of approximately RMB 1.2 billion for the year, with a dividend payout ratio increasing from 25% in 2024 to 30%. The management reiterated that they will adopt a more aggressive dividend policy in the next five years while balancing medium-term funding needs.