Citigroup: Cut Shanghai Pharmaceuticals Holding (02607) target price to 13.5 Hong Kong dollars, reflecting pressure on gross profit margin, reiterates "buy" rating.

Citigroup released a research report stating that it has adjusted the revenue forecast for Shanghai Pharmaceuticals Holding (02607) for the next two years in response to the latest sales trends. Considering the pressure on gross profit, the net profit forecast has been lowered, and the 2028 forecast has also been introduced. The bank believes that risks such as executive management execution risk, slower than expected integration progress, and the delay in the relaxation of the policy on online sales of prescription drugs are all downward risks. Citigroup has lowered the target price of Shanghai Pharmaceuticals Holding from HK$14.2 to HK$13.5 and reiterated a "buy" rating. The latest forecast for sales revenue for 2026 to 2028 is 298.58 billion, 319.018 billion, and 340.901 billion RMB respectively; net profit is projected to be 4.956 billion, 5.394 billion, and 5.768 billion RMB respectively.