HSBC Research: The domestic pharmaceutical industry lacks short-term catalysts, and the target price for Shanghai Pharma and China National Pharmaceutical Group is lowered

HSBC Research published a report indicating that the Chinese pharmaceutical industry currently lacks short-term catalysts for commercialization. It believes that the pace of recovery in the domestic market is weakening, and the ongoing policy gloom continues to hinder industry growth. The report suggests that companies can only partially offset the pressure of slowing profit growth by improving operational efficiency.

The bank maintains a "Hold" rating on Shanghai Pharma (02607.HK) and Sinopharm (01099.HK), with target prices adjusted from HKD 12.1 and HKD 18 to HKD 11.8 and HKD 19.5, respectively. It believes that the lagging domestic consumption recovery, the impact of volume-based procurement policies, and tightening medical insurance payments will continue to suppress the short-term upside potential of the sector