Morgan Stanley released a research report stating that it slightly increased the target price of Shanghai Pharma (02607) by 2.9% from HKD 17 to HKD 17.5, with a rating of "shareholding".
Based on Shanghai Pharma's Q1 2024 performance, Morgan Stanley has adjusted its forecasts for the years 2024-2030, primarily due to: 1) an increase in sales in the manufacturing department; 2) a decrease in gross margin; and 3) an increase in sales expenses. The new earnings per share forecast for the years 2024-2026 is RMB 1.4, RMB 1.5, and RMB 1.7.
The basic assumption for the company is that network expansion is steady, and valuable distribution contracts are obtained. Sales growth at branch campuses is maintained in the low double digits, exceeding peers; branch campus sales performance is diversified, shifting from generic drugs to new drugs and vaccines. External business expansion for hospitals is good and provides new services for large pharmaceutical companies.