Citigroup: China Biopharmaceutical (01177)'s mid-term profit far exceeded the expected target price increase to HK$10.8

The Zhitong Finance App learned that Citi released a research report stating that it maintained the “buy” rating of China Biopharmaceuticals (01177) and raised the target price from HK$10 to HK$10.8.

Zhongsheng Pharmaceutical announced its results for the first half of the year. Net profit for the period increased by 1.4% year on year to RMB 3.44 billion, which was significantly higher than the market and the forecast. Revenue for the first half of the year increased 10.6% year-on-year to RMB 19.44 billion, which was also better than the bank's and market expectations. It was mainly due to the strong increase in sales of innovative drugs of 44.3% to RMB 8.79 billion. Management expects innovative drugs to account for about 50% of the annual revenue.

Citi pointed out that if the 1.35 billion yuan after-tax dividend from Kexing Zhongwei in the first half of 2025 is excluded, adjusted net profit will increase sharply by 92.3% year over year. Group management expects to launch more than 30 innovative drugs between 2026 and 2030, with a peak domestic sales potential of 50 billion yuan.