Core Viewpoint - Morgan Stanley anticipates a decline in Chinese traditional medicine stocks over the next 30 days due to a profit warning issued by the companies, projecting a year-on-year net profit drop of 165% to 175% for the first half of 2025 [1] Summary by Relevant Categories Financial Performance - The decline in net profit is primarily attributed to the shrinking of the traditional Chinese medicine formula granule business, which is facing price reductions from centralized procurement and intensified competition [1] - The net profit is expected to decrease by 50% to 60% year-on-year, significantly below market consensus [1] Market Conditions - The centralized procurement process is only halfway completed, indicating that the pressure on the companies will likely persist [1] - There is a further downside risk to the projected price-to-earnings ratio for 2026 due to ongoing market pressures [1] Investment Recommendation - Morgan Stanley has set a target price of HKD 1.6 and has rated the stocks as "underweight" [1]
大行评级｜大摩：中国中药日前发盈警，预期股价将于未来30天内下跌