Daiwa: Cites SBP GROUP (01177) Management Reiterating Double-Digit Revenue Growth Guidance for This Year, Rating "Buy"

Daiwa released a research report stating that at a healthcare industry exchange event held recently, SBP GROUP (01177) management reiterated its unchanged guidance of double-digit year-on-year revenue growth for this year, expected to be driven jointly by licensing revenue and innovative drug sales growth, and anticipated that innovative drug sales plus licensing revenue will contribute half of full-year revenue. Daiwa currently has a "Buy" rating on Sino Biopharmaceutical. The bank noted that Sino Biopharmaceutical's full-year licensing revenue for this year is expected to reach US$355 million. In addition to the US$135 million upfront payment already recognized from the out-licensing to Sanofi, it expects to recognize in the second half of the year a US$200 million upfront payment from AstraZeneca for TQC3721 (PDE3/4), as well as a US$20 million upfront payment from Cipla for TQB2102, totaling US$220 million. Management also disclosed that newly approved innovative drugs will be the main driver of continued sales ramp-up, and additionally expects the generic drug business to bottom out this year and potentially return to growth next year on a lower base.