China Securities Co., Ltd.'s research report pointed out that Sinopharm (01099) released its interim performance report for the first half of 2024. In the first half of 2024, the company achieved revenue of 294.727 billion yuan, a year-on-year decrease of 2.07%, and achieved a net income of 3.704 billion yuan attributable to the parent, a year-on-year decrease of 9.76%. The performance was lower than expected, mainly due to pressure on the medical device distribution business.
The bank pointed out that in the second half of the year, the impact of sales compliance in hospitals is stabilizing, and the pharmaceutical distribution business of the company is expected to maintain steady growth. The replacement of medical devices is expected to release incremental growth, and the medical device distribution business is expected to improve month-on-month. In addition, the bank is bullish on the company's long-term performance potential as it continues to focus on building an integrated advantage in wholesale and retail.
The bank expects the company's revenue to reach 615.269 billion yuan, 660.18 billion yuan, and 713.472 billion yuan respectively in 2024-2026, with year-on-year growth rates of 3.1%, 7.3%, and 8.1%. The net income attributable to the parent is expected to reach 9.139 billion yuan, 9.772 billion yuan, and 10.485 billion yuan, respectively, with year-on-year growth rates of 0.9%, 6.9%, and 7.3%. The corresponding EPS is 2.93 yuan/share, 3.13 yuan/share, and 3.36 yuan/share, with corresponding PE ratios of 5.1X, 4.8X, and 4.5X. The bank maintains a "buy" rating.
