CLSA Increases Price Targets for SINOPHARM and SH PHARMA, Lowers CHINARES PHARMA's Target Price to HKD 5.6

The analyst rating from HSBC Global Research is a Hold for both SH PHARMA and SINOPHARM due to several factors: 1. Lack of Short-Term Catalysts: The commercialization of the Chinese pharmaceutical industry is currently lacking immediate drivers for growth. 2. Weakening Recovery Pace: The recovery of the domestic market is slowing down, which raises concerns about future performance. 3. Policy Uncertainties: Ongoing uncertainties in policies are hindering industry growth, creating an unstable environment for companies. 4. Earnings Growth Pressure: Companies are facing pressure from slowing earnings growth, which they can only partially mitigate through improved operational efficiency. 5. Sector Challenges: Anticipated delays in domestic consumption recovery, the impact of volume-based procurement policies, and tightened medical insurance payments are expected to suppress the sector's short-term upside potential. These factors led to a cautious outlook, resulting in the Hold rating for both companies.

Morgan Stanley's analyst rating for SINOPHARM (01099.HK) is based on the positive performance of its subsidiaries, particularly the announcement of their 3Q25 results, which showed a quarter-over-quarter turnaround. The report noted that CHINA NATIONAL MEDICINE, a key distributor for SINOPHARM, experienced a 4% increase in revenue and a 13% increase in profit year-over-year, indicating a positive trend that is expected to benefit the overall group. This positive outlook led to an Overweight rating and a target price of HKD22.5, with a 70-80% chance of the stock rising in the next 30 days.

The analyst rating for SINOPHARM (01099.HK) is maintained as "Buy" by BofA Securities, despite a decline in total revenue and net profit. The rationale behind this rating includes the adjustment of revenue forecasts due to the impact of volume-based procurement (VBP) expansion on the pharmaceutical and medical devices business. Although revenue forecasts for 2025-2027 were lowered by 1.6-1.7% and profit forecasts by 3.1%/2.9%/2.8%, BofA Securities increased its target price from $22.2 to $23, indicating a positive outlook for the stock.