In today’s briefing:
- Screen Holdings (7735 JP): Positive Scenario Discounted
- Shanghai Pharmaceuticals (2607 HK/601607 CH): Strong Start of 2023; Outlook Continues to Be Positive
Screen Holdings (7735 JP): Positive Scenario Discounted
- The recent spike in the share price has discounted the positive scenario for sales and earnings, which is represented by management’s guidance for FY Mar-24.
- The negative scenario – weaker than expected foundry demand, tougher than expected restrictions on exports to China – implies a significant downward revision to that guidance.
- The share price is up 77.5% year-to-date and 36% since the end of April. That should be enough for now.
Shanghai Pharmaceuticals (2607 HK/601607 CH): Strong Start of 2023; Outlook Continues to Be Positive
- Shanghai Pharmaceuticals Holding (2607 HK) reported 16% YoY revenue growth to RMB66B in 1Q23, driven by 17% YoY growth in pharmaceutical service segment, which contributed 88% of revenue.
- During the quarter, the company recorded net profit of RMB1.5B, up 21% YoY. Net margin expanded 9bps to 2.29%, driven by margin expansion in pharmaceutical manufacturing segment.
- Consolidating position in pharma distribution business, surging pharmaceutical manufacturing business, late-stage innovative drug pipeline, and accelerating internationalization strategy enhance conviction on SPH’s ability to maintain double-digit growth through 2025.
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