--- title: "G Sachs: SINOPHARM 2Q Results In Line, Cuts TP to HKD18.46" type: "News" locale: "en" url: "https://longbridge.com/en/news/296997257.md" description: "Goldman Sachs reported that Sinopharm's Q2 sales fell 1.6% YoY to RMB142.4 billion, in line with expectations, while gross margin pressure persisted due to VBP and cost controls. Despite this, strict expense management limited profit decline to 1%. The broker lowered earnings forecasts for 2026-2028 by 2.8%-3.2%, cutting the target price from HKD19.07 to HKD18.46, but maintained a 'Neutral' rating." datetime: "2026-08-26T06:45:09.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296997257.md) - [en](https://longbridge.com/en/news/296997257.md) - [zh-HK](https://longbridge.com/zh-HK/news/296997257.md) generator: "portal-rs" --- # G Sachs: SINOPHARM 2Q Results In Line, Cuts TP to HKD18.46 G Sachs issued a report stating that SINOPHARM (01099.HK) +0.220 (+1.379%) Short selling $6.85M; Ratio 15.972% 's second-quarter sales fell 1.6% YoY to RMB142.4 billion, broadly in line with expectations. Gross margin came under pressure at 7.05%, below 7.46% in the same period last year, mainly due to the continued rollout of volume-based procurement (VBP) for pharmaceuticals and medical devices, medical insurance cost controls, and structural pricing headwinds. However, strict cost controls effectively eased earnings pressure. Selling and administrative expenses declined 6% YoY, while financing costs fell to 0.44% of sales, leading profit to decline only 1% YoY to RMB2 billion, in line with G Sachs' expectations. Management said the pace of revenue decline gradually narrowed from May, with continued improvement in June and July. The report noted that SINOPHARM's retail business has become an important growth driver, with revenue in 1H26 rising 8.6% YoY, significantly outperforming the traditional distribution business. Management believes DTP (Direct to Patient) pharmacies directly benefit from two major long-term trends: prescription outflow and commercialization demand outside hospitals during the initial launch stage of innovative drugs. Leveraging upstream distribution capabilities, a nationwide specialty pharmacy network, and patient service infrastructure, the company is expected to capture a larger share of the innovative drug value chain. It also plans to transform retail pharmacies into integrated healthcare service hubs covering chronic disease management, patient follow-up, and digital patient management platforms. Management stated that the company is actively transforming from a traditional distributor into an integrated healthcare services platform by expanding into higher value-added businesses such as hospital supply chain services (SPD), centralized distribution, third-party logistics, innovative drug commercialization support, and community healthcare services. Revenue from these services recorded double-digit growth in 1H26, with 35 new SPD projects and 28 new hospital centralized distribution projects added during the period. Based on the results performance, G Sachs lowered its earnings forecasts for SINOPHARM for 2026 to 2028 by 3.2%, 3.2% and 2.8%, respectively, to reflect slightly greater-than-expected gross margin pressure. The broker cut its TP from HKD19.07 to HKD18.46 and maintained a "Neutral" rating. (ad/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-26 12:25.) ### Related Stocks - [01099.HK](https://longbridge.com/en/quote/01099.HK.md) - [600511.CN](https://longbridge.com/en/quote/600511.CN.md) - [GS.US](https://longbridge.com/en/quote/GS.US.md) - [W4VR.SG](https://longbridge.com/en/quote/W4VR.SG.md) ## Related News & Research - [Sinopharm Group Co (SHTDF) Gets a Buy from CICC](https://longbridge.com/en/news/296990881.md) - [Daiwa Downgrades SINOPHARM to Hold, Cuts TP to HKD18](https://longbridge.com/en/news/292165201.md) - [08:46 ETKatz and Wilpon Families Announce Organizational Restructuring of Sterling Equities After More Than 50 Years of Partnership](https://longbridge.com/en/news/297519542.md) - [Independent Pharmacy Cooperative Acquires USave Pharmacy Group](https://longbridge.com/en/news/297759584.md) - [14:30 ETCapitola Police Department Equips Entire Patrol Fleet with Life-Saving Avive Connect AED®s](https://longbridge.com/en/news/297686647.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**