Nomura lowers CSPC PHARMA's target price to 9.11 yuan, continues to recommend "buy," expects sales to recover in the coming quarters

Nomura's research report indicates that CSPC PHARMA (01093.HK) saw its revenue and profit decline by 12.3% and 7.1% year-on-year in the first three quarters, reaching RMB 19.9 billion and RMB 3.5 billion, respectively. Based on this, the revenue for the third quarter alone is estimated at RMB 6.6 billion, representing a year-on-year and quarter-on-quarter growth of 3.4% and 5.7%, significantly lower than the market expectation of RMB 7.4 billion; the year-on-year increase is mainly due to the recognition of cooperative income of RMB 465 million, which had no related income in the same period last year. The product sales in the third quarter decreased by 2.7% year-on-year but increased by 4.2% quarter-on-quarter to RMB 6.2 billion.

The management aims for positive growth in pharmaceutical sales by 2026 and expects R&D expenses to grow by 15% to 20% year-on-year during the same period. The firm has lowered its revenue forecasts for 2025 and 2026 by 12% and 6%, respectively, and profit forecasts by 26% and 14%, considering the underperformance of pharmaceutical sales and the delayed recognition of cooperative project income. The target price has been reduced from HKD 10.09 to HKD 9.11, maintaining a "Buy" rating, with expectations that the group's sales will gradually recover in the coming quarters