Goldman Sachs: Raises Shanghai Pharmaceuticals Holding (02607) target price to 10.3 Hong Kong dollars, increases net profit forecast.

Goldman Sachs released a research report stating that Shanghai Pharmaceuticals Holding (02607) had a fourth-quarter revenue of 68.5 billion yuan, a year-on-year increase of 4.4%, higher than the bank's expectations of 65.9 billion yuan, mainly driven by the solid performance of the manufacturing business segment. However, the net profit for the same period was 578 million yuan, a year-on-year increase of 16%, lower than the bank's expectation of 1.2 billion yuan, mainly due to the significant increase in sales expenses driven by the commercialization of innovative drugs, as well as investment losses and asset impairments recognized during the period. The bank raised its net profit forecast for Shanghai Pharmaceuticals in 2026 and 2027 by 5.8% and 1.7%, respectively, to reflect the increase in sales expenses and the merger of Shanghai and Hutchison Pharma, introducing an earnings forecast of 1.06 yuan per share for 2028; the target price was raised from HK$10.03 to HK$10.3, maintaining a "sell" rating.