CSPC’s Full-Year Results in Line, Pipeline Progresses; Shares Modestly Undervalued

Narrow-moat CSPC’s 2021 full-year earnings were in line with our expectations. Revenue for the year was CNY 28 billion, which is 12% growth year on year and 1% higher than our forecast. Gross profit margin rose 93 basis points, in line with our expectation that the launch of new drugs would offset the 50% price cut to NBP that took effect in March. Although the company does not disclose drug revenue, we estimate revenue of CNY 6.6 billion for NBP, CNY 1.6 billion for Xuanning, CNY 2.3 billion for Jinyouli, CNY 2.4 billion for Keaili, and CNY 2.9 billion for Duomeisu.