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.

Jiangsu Hengrui Medicine (600276.CH) 2022/23Q1 - The Situation Is Not as Optimistic as Imagined

Pre-IPO YSB Inc (YSB.HK) - The Business Model Is Facing Challenges

Valuation System with Chinese Characteristics – the Correct Interpretation and Its Deep Meaning

Pre-IPO New Ruipeng Pet Group (RPET.US) - The Potential Failure of Pet Healthcare and the Bleak IPO

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

China Biotech – The Commercialization Performance and The Outlook

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>Pharmaceutical distribution business is about competing for scale/capital costs. Sinopharm mainly relies on economies of scale to establish competitiveness.But this business wouldn’t generate high profit margin due to industry characteristics.</li>
<li>The opportunity lies in the logic of import substitution and the products out of VBP scope. Stable or declining financial cost ratio is also a key driving force for profitability.</li>
<li>We think Sinopharm’s revenue and net profit could achieve double-digit growth in 2023. The valuation is already not cheap. It may be wiser to take profits in time.</li>
</ul>


Pharmaceutical distribution business is about competing for scale/capital costs. Sinopharm mainly relies on economies of scale to establish competitiveness.But this business wouldn’t generate high profit margin due to industry characteristics.
The opportunity lies in the logic of import substitution and the products out of VBP scope. Stable or declining financial cost ratio is also a key driving force for profitability.
We think Sinopharm’s revenue and net profit could achieve double-digit growth in 2023. The valuation is already not cheap. It may be wiser to take profits in time.


Sinopharm Group Co (1099.HK) - Double-Digit Growth Is Expected in 2023; Margins Have Room to Improve