[ET Net News Agency, 16 July 2019] Goldman Sachs initiated coverage on Hansoh
Pharmaceutical (03692) with a "buy" rating and a target price of HK$27.5.
The research house said Hansoh Pharma is a leading specialty drugmaker and transitioning
to a "generics+innovation" model, similar to Hengrui (Shanghai: 600276) and Sino Biopharm
(01177).
Despite near-term uncertainty and concerns about generics amid policy changes, Hansoh's
leadership position and diversified portfolio would make it a key beneficiary in any major
generics market consolidation in China, Goldman said.
While some core products may face pricing pressure due to centralized procurement, this
would be partially offset by volume ramp-up from its seven products listed in the 2017
NRDL and new generics (20-30 in 2019/20). It forecast 2018-21 sales CAGR of 26% and
earnings CAGR of 30%, with its emerging novel drug portfolio as a key driver. (KL)