Investment Rating - The report maintains a "Neutral" rating for the company with a target price adjusted to HKD 5.18 [3][5][14] Core Views - The company anticipates a significant decline in profit for the first three quarters of 2024, projecting a year-on-year decrease of 16% to approximately RMB 3.8 billion due to a substantial drop in revenue from its main pharmaceutical business [1][2] - The decline in revenue is primarily attributed to a worsening sales performance in the oncology segment, particularly for its key products, which have been adversely affected by centralized procurement policies [1][2] - The report indicates that the core products in the neurological and cardiovascular segments are also underperforming, with a notable decrease in revenue growth for the second half of the year [1][2] Summary by Sections Financial Performance - The company expects total revenue for 2024 to be approximately RMB 29.4 billion, reflecting a decrease from previous estimates [4] - Shareholder net profit is projected to decline to RMB 4.89 billion in 2024, down from RMB 5.87 billion in 2023, indicating a significant drop in profitability [4][8] - The report outlines a downward revision of revenue forecasts for the oncology segment by 16%-25% for FY24-26, with expected revenues of RMB 4.9 billion, RMB 5.5 billion, and RMB 6.4 billion respectively [2] Valuation Metrics - The adjusted DCF model suggests a target price of HKD 5.18 per share, with a current market price of HKD 5.27, indicating limited upside potential [3][5] - The report provides a detailed financial summary, including projected earnings per share of RMB 0.41 for 2024, with a P/E ratio of 11.7 [4][8] Market Context - The report highlights the competitive pressures in the oncology market due to price reductions from centralized procurement, which have not led to a significant increase in sales volume for the affected products [2] - The company faces challenges in rapidly recovering sales in the neurological and cardiovascular segments, with established products showing limited growth potential in the current market environment [2][3]
石药集团：三季度成药板块显著放缓，短期内业绩承压