Citigroup: SBP GROUP (01177) mid-term profit significantly exceeds expectations, target price raised to HKD 10.8.

Citi has released a research report, maintaining a "Buy" rating for SBP GROUP (01177), raising the target price from HK$10 to HK$10.8. China National Pharmaceutical Group announced its interim results, with net profit increasing by 1.4% year-on-year to RMB 3.44 billion, significantly surpassing market and the bank's expectations. Revenue for the first half of the year grew by 10.6% year-on-year to RMB 19.44 billion, also exceeding the bank's and market expectations, primarily boosted by a strong 44.3% growth in innovative drug sales to RMB 8.79 billion. The management expects that innovative drug revenue will account for about 50% of the total for the year. Citi pointed out that, excluding the after-tax dividend of RMB 1.35 billion from Sinovac Biotech for the first half of 2025, adjusted net profit would show a substantial year-on-year growth of 92.3%. The group's management anticipates the launch of over 30 innovative drugs between 2026 and 2030, with peak sales potential in China reaching RMB 50 billion.