Earnings Forecast Adjustment: Morgan Stanley has lowered its earnings forecasts for TRAD CHI MED (00570.HK) for 2025-2040 by 10-14% due to increased impairment provisions linked to price cuts in Chinese medicine formula granules.
Target Price and Rating: The broker reduced the target price from $1.6 to $1.5 while maintaining an Underweight rating on the stock.
Market Performance: The company's results have consistently fallen short of market expectations, and the quality of earnings has declined, partly due to a negative perception of governance following the termination of a significant transaction last year.
Selling Pressure Anticipated: Continued selling pressure on the stock is expected as event-driven investors are likely to further reduce their holdings.
Wall Street analysts forecast 00570 stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for 00570 is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
0 Analyst Rating
Wall Street analysts forecast 00570 stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for 00570 is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
0 Buy
0 Hold
0 Sell
Current: 2.180
Low
Averages
High
Current: 2.180
Low
Averages
High
Morgan Stanley
Morgan Stanley
Underweight
downgrade
Al Analysis
2025-12-30
Reason
Morgan Stanley
Morgan Stanley
Price Target
Al Analysis
2025-12-30
downgrade
Underweight
Reason
The analyst rating for TRAD CHI MED (00570.HK) was lowered to Underweight by Morgan Stanley due to several factors:
1. Lowered Earnings Forecasts: The firm reduced its 2025-2040 earnings forecasts by 10-14% because of anticipated higher impairment provisions linked to price cuts for Chinese medicine formula granules.
2. Missed Market Expectations: The company's results have consistently fallen short of market expectations, indicating a decline in the quality of earnings.
3. Negative Perception of Governance: The termination of a significant transaction last year has contributed to a negative perception of the company's governance among investors.
4. Ongoing Selling Pressure: The broker anticipates that selling pressure on the stock will continue, as event-driven investors are likely to further reduce their holdings.
These factors collectively led to a reduction in the target price from $1.6 to $1.5.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
