Goldman Sachs: Raising the target price of China Biopharmaceuticals (01177) to HK$9.07, reaffirming the “buy” rating

The Zhitong Finance App learned that Goldman Sachs released a research report saying that China Biopharmaceuticals (01177) announced that it plans to use 4.48 billion yuan in cash, valued at about 19 times the price-earnings ratio of the past 12 months, to buy an additional 5% of the subsidiary company Zhengda Tianqing; after completion, the effective shareholding will increase from 60% to 65%. Goldman Sachs kept its 2026 profit forecast largely unchanged, and raised its 2027 and 2028 profit forecasts by 9.1% each, maintaining a “buy” rating, and raising the target price from HK$8.65 to HK$9.07.

Management said that the deal is strategically attractive and can increase exposure to the Group's core profit and innovation engine with a price-earnings ratio discount of about 26 times that of the Hong Kong listed industry. Based on the adjusted net profit of Chia Tai Tianqing in the past 12 months, management expects that the share purchases can contribute an additional approximately RMB 350 million to the Group's net profit, which is equivalent to about 7.4% of the Group's adjusted profit for the past 12 months up to June 2026. Goldman Sachs said that the increase in profit forecasts for 2027 and 2028 mainly reflects the decline in minority shareholders' equity of Chia Tai Tianqing and the increase in the probability that wholly-owned subsidiaries LaNova and HygieIA will contribute to business development.