Lyon: Fosun Pharma's employee stock ownership plan enhances growth visibility, target price raised to HK$29.6.

The Lyon report indicates that Fosun Pharma's second quarter performance has resilience, with revenue increasing by 7.2% and net profit increasing by 22.5% quarter-on-quarter, mainly driven by strong sales of innovative products. The bank believes that the new employee stock ownership plan provides greater visibility for its growth and partially alleviates market concerns after leadership changes. The plan is mainly linked to the sales target and net profit target of innovative drugs from this year to 2027, implying a 20% compound annual growth rate for both indicators to be achieved. The company also successfully completed two out-licensing transactions for two self-developed molecules. The bank raised its core profit forecast for Fosun Pharma from 13% to 21% between this year and 2027, with the H-share target price raised from 15.6 Hong Kong dollars to 29.6 Hong Kong dollars, maintaining an outperform rating compared to the market.