Goldman Sachs: Downgrades CMS (00867) target price to HK$17.96, maintains "Buy" rating.

Goldman Sachs released a research report stating that due to CMS (00867) becoming more conservative in its sales growth outlook amid challenging performance, it has revised down its profit forecasts for 2026 to 2028 by 3.3%, 4.2%, and 9.4% respectively, and adjusted the target price from HKD 19.5 to HKD 17.96, while maintaining a "Buy" rating. The company's revenue for the first half of the year was RMB 4.5 billion, an annual increase of 12.5%, which fell short of the bank's expected 18% growth, though the performance of its three core VBP products exceeded expectations. Despite the slowdown in revenue growth, net profit still rose 5% year-on-year to RMB 986 million, roughly in line with the bank's expectations, primarily due to sales expenses being lower than anticipated, remaining flat year-on-year and decreasing from 35.6% of sales to 32%. R&D expenses saw a year-on-year increase of 76%, as the company continues to expand its internal innovation pipeline, adding 10 to 15 new projects each year. In the face of a challenging industry environment marked by ongoing anti-corruption and healthcare cost control, management has moderately adjusted its full-year revenue growth guidance from over 20% to 15% to 20%, while emphasizing that investment returns in the second half of the year will create upward profit potential.