Huatai Research raised its target price for YiChang HEC ChangJiang Pharmaceutical (01558) to HK$56.8 from HK$54.6 and maintained its "buy" rating.
Following HEC Pharma's positive profit alert, the research house estimated core net profit growth of 100% in 2019 mainly comes from Kewei's fast expansion at grassroots level/OTC channel.
Given the unexpectedly high demand for Kewei driven by Covid-19 in 1Q and the follow-up launch of new ANDA/innovative products, Huatai expects the fast growth to sustain. It lifted its 2019/2020/2021 EPS forecasts by 10/15/11% to HK$4.70/HK$5.68/HK$6.38, to factor in potential new entrants in the oseltamivir market and likely GPO (group purchasing organization) afterwards.
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