CSPC Pharmaceutical Group (P Chip)

CSPC Pharmaceutical is an investment holding company. Through its subsidiaries, Co. is principally engaged in the manufacture and sale of pharmaceutical products. Co.'s operating segments include: Finished drugs; Antibiotics (intermediates and bulk drugs; Vitamin C (bulk drugs); and Caffeine and others (bulk drugs). As of Dec 31 2014, Co. had over 170 products under research and development, with focus on the therapeutic areas of cardio-cerebrovascular, diabetes, oncology, neurology and anti-infective.
  • Ticker1093
  • ISINHK1093012172
  • ExchangeHong Kong Stock Exchange
  • SectorPharmaceuticals & Biotechnology
  • CountryHong Kong

Analysts

UOB
Carol Dou Xiao Qin ...
  • Michael Cheung Ho Bun

Healthcare - Clearer regulatory directions benefit innovative drug development.

The NHSA has released the 2019 NRDL with 148 additions and 150 removals. 128 exclusive drugs will undergo negotiations in the coming months for entering the NRDL. The new NRDL policy is largely in line with our estimate with an expected impact. Given the clearer regulatory direction, we believe most of the policy shocks have been factored in. With the changing policy environment, companies are focusing on innovation, which may bring about a stronger healthcare sector in the next few years. Upgrade the healthcare sector to MARKET WEIGHT.

UOB
Carol Dou Xiao Qin ...
  • Michael Cheung Ho Bun

CSPC Pharmaceutical Group - 1H19: Earnings grew strongly by 24.8% yoy; easing policy pressure.

CSPC reported satisfactory results with revenue and net profit growing steadily by 27.6% yoy and 24.8% yoy respectively in 1H19. Results are in line with our and consensus estimates. Effective market penetration strategies continue to boost revenue of the innovative product segment and improve margins. We expect CSPC to deliver steady earnings growth in 2019-20, given easing policy pressure. Maintain BUY with a higher target price of HK$17.00.

UOB
Carol Dou Xiao Qin ...
  • Charles Wong Kok Min
  • Joyce Chan Pui Lai
  • Julia Cheung Pui Man
  • Julia Pan Mengyao
  • Lee Yuk Kei
  • Michael Cheung Ho Bun
  • Oscar Jiang
  • Robin Yuen

Greater China Daily: Tuesday, August 20, 2019

KEY HIGHLIGHTS CHINA Results CSPC Pharmaceutical Group (1093HK/BUY/HK$12.96/Target: HK$17.00) 1H19: Earnings grew strongly by 24.8% yoy; easing policy pressure. Inspur International (596 HK/BUY/HK$3.77/Target: HK$5.25) 1H19: Core profit in line; resilient growth from cloud service business. Minsheng Education (1569 HK/BUY/HK$1.35/Target: HK$2.00) 1H19: Results in line with expectations; one school consolidated, three more to go. Tongcheng-eLong (780 HK/BUY/HK$12.32/Target: HK$20.00) 2Q19: Strong GMV growth, bottom line beat on better operating efficiency. HONG KONG Update Ausnutria D...

UOB
Arandi Ariantara ...
  • Carol Dou Xiao Qin
  • Charles Wong Kok Min
  • Jacquelyn Yow Hui Li
  • Julia Cheung Pui Man
  • Julia Pan Mengyao
  • Kader Farhan Bin Kader Ridzwan
  • Kowit Pongwinyoo
  • Lee Yuk Kei
  • Leow Huey Chuen
  • Michael Cheung Ho Bun
  • Oscar Jiang
  • Robin Yuen
  • Singapore Research Team
  • Thunya Sutavepramochanon
  • Vincent Khoo Boo Aik

Regional Morning Notes - Tuesday, August 20, 2019

CHINA Results CSPC Pharmaceutical Group (1093HK/BUY/HK$12.96/Target: HK$17.00): 1H19: Earnings grew strongly by 24.8% yoy; easing policy pressure. Inspur International (596 HK/BUY/HK$3.77/Target: HK$5.25): 1H19: Core profit in line; resilient growth from cloud service business. Minsheng Education (1569 HK/BUY/HK$1.35/Target: HK$2.00): 1H19: Results in line with expectations; one school consolidated, three more to go. Tongcheng-eLong (780 HK/BUY/HK$12.32/Target: HK$20.00): 2Q19: Strong GMV growth, bottom line beat on better operating efficiency. HONG KONG Update Ausnutria Dairy (1717 HK/BUY/HK$...

UOB
Carol Dou Xiao Qin ...
  • Michael Cheung Ho Bun

Healthcare - Reform of high-value medical consumables kicks off; expecting in-line 1H19 results.

The State Council has announced a "High-value Medical Consumables Reform Programme" which will lead to continued price and margin pressure for high-value medical consumables. Companies are likely to report 1H19 results that are in line with our estimates. The industry could see a significant slowdown in revenue and earnings growth in the next few years as the government tightens cost control on medical insurance by lowering product prices and monitoring prescription behaviour. Maintain UNDERWEIGHT.

UOB
Carol Dou Xiao Qin ...
  • Michael Cheung Ho Bun

CSPC Pharmaceutical Group - 1H19: Earnings grew strongly by 24.8% yoy; easing policy pressure.

CSPC reported satisfactory results with revenue and net profit growing steadily by 27.6% yoy and 24.8% yoy respectively in 1H19. Results are in line with our and consensus estimates. Effective market penetration strategies continue to boost revenue of the innovative product segment and improve margins. We expect CSPC to deliver steady earnings growth in 2019-20, given easing policy pressure. Maintain BUY with a higher target price of HK$17.00.

UOB
Arandi Ariantara ...
  • Carol Dou Xiao Qin
  • Charles Wong Kok Min
  • Jacquelyn Yow Hui Li
  • Julia Cheung Pui Man
  • Julia Pan Mengyao
  • Kader Farhan Bin Kader Ridzwan
  • Kowit Pongwinyoo
  • Lee Yuk Kei
  • Leow Huey Chuen
  • Michael Cheung Ho Bun
  • Oscar Jiang
  • Robin Yuen
  • Singapore Research Team
  • Thunya Sutavepramochanon
  • Vincent Khoo Boo Aik

Regional Morning Notes - Tuesday, August 20, 2019

CHINA Results CSPC Pharmaceutical Group (1093HK/BUY/HK$12.96/Target: HK$17.00): 1H19: Earnings grew strongly by 24.8% yoy; easing policy pressure. Inspur International (596 HK/BUY/HK$3.77/Target: HK$5.25): 1H19: Core profit in line; resilient growth from cloud service business. Minsheng Education (1569 HK/BUY/HK$1.35/Target: HK$2.00): 1H19: Results in line with expectations; one school consolidated, three more to go. Tongcheng-eLong (780 HK/BUY/HK$12.32/Target: HK$20.00): 2Q19: Strong GMV growth, bottom line beat on better operating efficiency. HONG KONG Update Ausnutria Dairy (1717 HK/BUY/HK$...

UOB
Greater China Research Team

Strategy - Alpha Picks: Greater China August Conviction List

We highlight our analysts’ high conviction calls for August – Ausnutria Dairy (1717 HK), China Communication Services (552 HK), China Gas (384 HK), CNBM (3323 HK), CSPC (1093 HK), Huaneng Renewables (958 HK), Huifu Payment (1806 HK), and Sunac China (1918 HK). We also add CQRC (3618 HK), Microport Scientific (853 HK), and Nine Dragons Paper (2689 HK) to our SELL list.

Jay Lee

Morningstar | China to Audit 77 Drugmakers, Government Likely to Speed Up Pricing Reform

On the morning of June 4 2019, China’s Ministry of Finance, or MOF, announced it and the Medical Insurance Administration will jointly audit the accounting practices of 77 drugmakers during June and July. The stocks of Chinese drugmakers have fallen sharply following the news as the market braces for more policy uncertainty. Among our coverage, the list includes narrow-moat Shanghai Pharmaceuticals, CR Sanjiu (a listed subsidiary of narrow-moat CR Pharmaceuticals), and one unlisted subsidiary of narrow-moat CSPC Pharmaceuticals. Our fair values remain unchanged Ostensibly, the catalyst is th...

Jay Lee

China to audit 77 drugmakers, government likely to speed up pricing reform

On the morning of June 4 2019, China’s Ministry of Finance, or MOF, announced it and the Medical Insurance Administration will jointly audit the accounting practices of 77 drugmakers during June and July. The stocks of Chinese drugmakers have fallen sharply following the news as the market braces for more policy uncertainty. Among our coverage, the list includes narrow-moat Shanghai Pharmaceuticals, CR Sanjiu (a listed subsidiary of narrow-moat CR Pharmaceuticals), and one unlisted subsidiary of...

1 director bought

A director at Cspc Pharmaceutical Group bought 2,000,000 shares at 15.600HKD and the significance rating of the trade was 67/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly showing Close periods where trading activity is restricted under listing rules. Th...

UOB
Carol Dou Xiao Qin ...
  • Charles Wong Kok Min
  • Joyce Chan Pui Lai
  • Julia Cheung Pui Man
  • Julia Pan Mengyao
  • Lee Yuk Kei
  • Michael Cheung Ho Bun
  • Oscar Jiang
  • Robin Yuen

Greater China Daily: Tuesday, August 20, 2019

KEY HIGHLIGHTS CHINA Results CSPC Pharmaceutical Group (1093HK/BUY/HK$12.96/Target: HK$17.00) 1H19: Earnings grew strongly by 24.8% yoy; easing policy pressure. Inspur International (596 HK/BUY/HK$3.77/Target: HK$5.25) 1H19: Core profit in line; resilient growth from cloud service business. Minsheng Education (1569 HK/BUY/HK$1.35/Target: HK$2.00) 1H19: Results in line with expectations; one school consolidated, three more to go. Tongcheng-eLong (780 HK/BUY/HK$12.32/Target: HK$20.00) 2Q19: Strong GMV growth, bottom line beat on better operating efficiency. HONG KONG Update Ausnutria D...

UOB
Carol Dou Xiao Qin ...
  • Charles Wong Kok Min
  • Joyce Chan Pui Lai
  • Julia Cheung Pui Man
  • K Ajith
  • Neo Chen Wentao
  • Sandra Huang Jieqiong

Greater China Daily: Wednesday, May, 22, 2019

KEY HIGHLIGHTS CHINA Sector Steel A challenging year; downgrade to UNDERWEIGHT. Results CSPC Pharmaceutical Group (1093 HK/HOLD/HK$13.84/Target: HK$15.00) 1Q19: Earnings up 28.8% yoy, enhances strengths amid policy uncertainties. Sino Biopharmaceutical (1177 HK/BUY/HK$7.66/Target: HK$9.50) 1Q19: Core earnings up 24.7% yoy; constantly rolling out new products to fuel growth. HONG KONG Update Cathay Pacific (293 HK/HOLD/HK$11.96/Target: HK$12.70) Dim outlook for cargo traffic drags valuation; downgrade to HOLD. TRADERS’ CORNER Sunlight REIT (435 HK): Trading Buy Range 3SBIO (1530 H...

UOB
Carol Dou Xiao Qin ...
  • Joyce Chan Pui Lai
  • Julia Cheung Pui Man
  • Lee Yuk Kei
  • Michael Cheung Ho Bun
  • Neo Chen Wentao
  • Nick Liu Sunliang
  • Sandra Huang Jieqiong

Greater China Daily: Tuesday, March, 19, 2019

KEY HIGHLIGHTS CHINA Sector Property Weekly: Turnover continues to go up in tier-1 and tier-2 cities. Results China Coal Energy (1898 HK/HOLD/HK$3.40/Target: HK$3.20) 2018: Results below expectations; coal production ramps up while prices under pressure in 2019. China Traditional Chinese Medicine Holdings (570 HK/HOLD/HK$4.93/Target: HK$5.50) 2018: Results in line, improvement of operating efficiency remains a key task. CSPC Pharmaceutical Group (1093 HK/HOLD/HK$13.96/Target: HK$13.81) 2018: Net profit rises 31.9% yoy, in line; taking action to ensure success of major products. Upgrade...

An increasingly favourable environment allows CSPC PHARMACEUTICAL GLD. to improve to Neutral

The independent financial analyst theScreener just upgraded the general evaluation of CSPC PHARMACEUTICAL GLD. (HK), a company active in the Pharmaceuticals industry. As regards its fundamental valuation, the title confirms its rating of 3 out of 4 stars while its market behaviour remains as risky. theScreener believes, however, that a more enabling environment allows the title to increase its general evaluation to Neutral. As of the analysis date July 19, 2019, the closing price was HKD 13.28 and its expected value was estimated at HKD 12.99.

Ford Equity International Rating and Forecast Report

Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind each recommendation and reflect the fundamental and price data as of the last trading day of the week...

UOB
Carol Dou Xiao Qin ...
  • Michael Cheung Ho Bun

Healthcare - Clearer regulatory directions benefit innovative drug development.

The NHSA has released the 2019 NRDL with 148 additions and 150 removals. 128 exclusive drugs will undergo negotiations in the coming months for entering the NRDL. The new NRDL policy is largely in line with our estimate with an expected impact. Given the clearer regulatory direction, we believe most of the policy shocks have been factored in. With the changing policy environment, companies are focusing on innovation, which may bring about a stronger healthcare sector in the next few years. Upgrade the healthcare sector to MARKET WEIGHT.

UOB
Carol Dou Xiao Qin ...
  • Michael Cheung Ho Bun

Healthcare - Reform of high-value medical consumables kicks off; expecting in-line 1H19 results.

The State Council has announced a "High-value Medical Consumables Reform Programme" which will lead to continued price and margin pressure for high-value medical consumables. Companies are likely to report 1H19 results that are in line with our estimates. The industry could see a significant slowdown in revenue and earnings growth in the next few years as the government tightens cost control on medical insurance by lowering product prices and monitoring prescription behaviour. Maintain UNDERWEIGHT.

UOB
Carol Dou Xiao Qin ...
  • Michael Cheung Ho Bun

Healthcare - Drug monitoring list puts drug prescription behaviour in check.

The government has released the First Batch Of Drugs Under Monitoring (chemicals and biological products) which keeps drug prescription behaviour in check. The drug monitoring list has been highly expected and will hit sales of listed drugs. Although TCM products are not listed, the restriction on TCM prescription by Western physicians may still place significant pressure on TCM finished drugs, especially TCM injections, sold via hospital channels. Maintain UNDERWEIGHT.

UOB
Carol Dou Xiao Qin ...
  • Michael Cheung Ho Bun

Healthcare - Challenges and opportunities in 2H19.

Qinghai has become the second province after Fujian to adopt 11-city GPO drug prices. The government has also shown strong intention to launch the second round of GPO programme and cut prices for medical consumables. The recent policy development indicates still considerable policy risks in 2H19, while we also see opportunities brought by the new NRDL and innovation trend. Moreover, companies are actively adjusting strategies as they strive for growth. Maintain UNDERWEIGHT.

UOB
Carol Dou Xiao Qin ...
  • Michael Cheung Ho Bun

Healthcare - Substantial policy risks remain in 2019.

Healthcare companies reported strong revenue growth but depressed margins in 2018. Facing considerable policy uncertainties, companies have adopted strategies to pursue earnings growth, which we believe some may be effective while others less so. The second round of GPO and other policies may lead to slower revenue growth and continued margin pressure in 2019. Maintain UNDERWEIGHT on considerable policy risk and possible slower industry growth.

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