Investment Rating - The report maintains an "Outperform" rating for Shanghai Pharmaceuticals [2][16]. Core Insights - In Q1 2025, Shanghai Pharmaceuticals achieved revenue of CNY 70.76 billion, a year-on-year increase of 0.9%, while net profit attributable to shareholders was CNY 1.33 billion, down 13.6% year-on-year, primarily due to a decline in profit contributions from the Pharmaceutical Manufacturing segment and one-time losses [3][13]. - The Pharmaceutical Service segment demonstrated strong resilience, with revenue reaching CNY 64.88 billion, up 2.6% year-on-year, driven by innovative business initiatives [3][14]. - The report forecasts revenue growth of 8% for FY2025 and 7.3% for FY2026, with net profit growth expected to be 9.3% in FY2025 and 9.9% in FY2026 [11][16]. Financial Performance Summary - Revenue for FY2023 was CNY 260.3 billion, with a projected increase to CNY 275.3 billion in FY2024 and CNY 297.3 billion in FY2025, reflecting a growth rate of 12.2%, 5.7%, and 8.0% respectively [11][16]. - The gross profit margin for FY2025 is projected at 11.2%, with a slight decrease to 11.1% in FY2026 [11][16]. - The report indicates a P/E ratio of 7.4x for FY2025 and 6.7x for FY2026, suggesting the stock is undervalued compared to its earnings potential [5][16]. Segment Performance - The Pharmaceutical Service segment's revenue includes CNY 1.8 billion from Contract Sales Organization (CSO) services, up 9.9% year-on-year, and CNY 12.5 billion from innovative drug distribution, up 23.2% year-on-year [3][14]. - The Pharmaceutical Manufacturing segment reported revenue of CNY 5.89 billion, down 15.3% year-on-year, primarily due to a high base effect from the previous year [14][16]. Valuation - The target price for Shanghai Pharmaceuticals is set at HKD 13.73, based on a discounted cash flow (DCF) model with a WACC of 6.2% and a perpetual growth rate of 3% [5][16].
上海医药：2025年一季度业绩：符合预期；医药商业创新业务增速瞩目-20250507