Shanghai Pharmaceuticals Holding Co Ltd Class H
02607: XHKG (HKG)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
HK$61.30 | Bmvmwy | Wrggrcb |
Shanghai Pharma Earnings: Weaker Manufacturing Segment Outlook; Fair Value Cut, Shares Fairly Valued
We cut our fair value estimate for narrow-moat Shanghai Pharmaceuticals, or SPH, to HKD 11.60 per share from HKD 13.50, following a disappointing 5.1% year-on-year growth in revenue. The miss is due to a sectorwide slowdown, which we think reflects weak macroeconomic conditions and also a larger-than-expected sensitivity to a cut in generic drug prices. As a result, we lower our 2024 sales growth rate to 6.5% from 10.7%. We believe SPH is fairly valued, and its faster-than-peer growth is reflected in its current share price.