[ET Net News Agency, 25 September 2019] UOB Kay Hian lowered its target price for Sino
Biopharmaceutical (01177) to HK$11.2 and downgraded its rating to "hold" from "buy".
The research house said it comes as a surprise that Sino Biopharm lost the bid for
Entecavir in the 25-province GPO (group purchasing organization) tender, given that the
company has long been building on the Hepatitis B virus (HBV) segment and has an
established branding and reputation.
Moreover, Sino Biopharm won the tenders for Flurbiprofen, Rosuvastatin, and Irbesartan
Hydrochlorothizaide with a 50-86% price cut from its current 25-province market prices.
The company may have to work extra hard on oncology and other unaffected segments to
weather the damage from the 25-province GPO tenders. UOBKH cut its 2020 revenue
assumptions for Sino Biopharm and expects net earnings growth at 7.5% for 2020 and 22.8%
for 2021 respectively.
With strong R&D capacity and an extensive pipeline, Sino Biopharm will continue to roll
out new products and remain as an industry leader in China's pharmaceutical market, UOBKH
noted. (KL)