Investment Rating - The report maintains a "BUY" rating for CSPC Pharmaceutical, indicating a potential return of over 15% over the next 12 months [17]. Core Insights - CSPC Pharmaceutical is experiencing an earnings decline primarily due to pricing pressure on its finished drug sales, with a forecasted net profit drop of 27.5% YoY for FY24 [7]. - The company anticipates a recovery in sales and net profit growth in FY25, driven by new product launches and out-licensing deals [7]. - The target price remains unchanged at HK5.03 [3]. Financial Summary - Revenue for FY22 was RMB 30,937 million, with a slight increase to RMB 31,450 million in FY23, but expected to decline to RMB 29,040 million in FY24, followed by a recovery to RMB 30,388 million in FY25 and RMB 31,300 million in FY26 [2][12]. - Net profit decreased from RMB 6,232.1 million in FY22 to RMB 6,072.7 million in FY23, with a significant drop expected to RMB 4,404.9 million in FY24, before rebounding to RMB 5,053.5 million in FY25 and RMB 5,135.5 million in FY26 [2][12]. - The earnings per share (EPS) is projected to decline from RMB 0.51 in FY22 to RMB 0.38 in FY24, with a slight recovery to RMB 0.43 in FY25 and RMB 0.44 in FY26 [2][12]. Sales Performance - Finished drug sales are projected to decrease by 7% YoY to RMB 23.84 billion in FY24, with a notable 19.3% YoY decline in Q4 FY24 [7]. - Oncology revenue is expected to decline by 28%, while cardiovascular drug sales are forecasted to fall by 15% due to pricing pressures and exclusion from VBP rounds [7]. New Product Development - CSPC aims to achieve RMB 2.0 billion in sales from new products in FY24, with plans to double this revenue in FY25, focusing on products like Mingfule and Kelingda [7]. - The company has successfully out-licensed several innovative assets and has multiple products in clinical trials, indicating a strong pipeline for future growth [7].
石药集团：Earnings decline amid pricing pressure-20250226