HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Over 15 years' experience in both finance and healthcare, covering clinic operations, investment and equity research in both China and overseas.

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Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Equity Bottom-Up

Sinopharm Group Co Ltd H / Equity Bottom-Up

<ul>
<li>Over the past few years, Sinopharm's revenue scale has continued to grow, but its gross profit margin declined due to negative policy pressure. Actually, it isn’t a highly profitable business.</li>
<li>As industry leader, Sinopharm will benefit from the increasing industry concentration and further expand market share. The challenge is Sinopharm will face a situation of increasing revenues without increasing profits.</li>
<li>For 2022 forecast, revenue YoY growth could be about 5%-7%. Net profit YoY growth could be below 10%., High valuation expectations cannot be supported considering the future industry trend.</li>
</ul>


Over the past few years, Sinopharm's revenue scale has continued to grow, but its gross profit margin declined due to negative policy pressure. Actually, it isn’t a highly profitable business.
As industry leader, Sinopharm will benefit from the increasing industry concentration and further expand market share. The challenge is Sinopharm will face a situation of increasing revenues without increasing profits.
For 2022 forecast, revenue YoY growth could be about 5%-7%. Net profit YoY growth could be below 10%., High valuation expectations cannot be supported considering the future industry trend.


Sinopharm Group (1099.HK) - Industry Trends Hardly Support High Valuation Expectations