In today’s briefing:
- China Shineway Pharmaceutical (2877HK)-Shineway Is Undervalued, but Downside Risk Is Hard to Control
China Shineway Pharmaceutical (2877HK)-Shineway Is Undervalued, but Downside Risk Is Hard to Control
- Shineway showed good performance growth in 22H1, which was mainly driven by outstanding growth of TCM formula granules business. We think such positive momentum would continue in the short term.
- The implementation of national standards is actually paving the way for future VBP. Together with increasing competition, Shineway could be difficult to maintain over 70% gross margin in long run.
- Shineway is cash rich and is undervalued. Obviously, the unfriendly macro environment provides a buying opportunity, but investors may need to consider the downside risks, which is hard to control.
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