Sinopharm Earnings: After a Weak 2024, a Slow 2025 Recovery Is Expected

Sinopharm’s 2024 revenue was slightly weaker than expected, falling 2% from the 2023 level as pricing and demand headwinds continued. But the decline in operating margin to 3.2% was in line with our expectation. Taking a fresh look, we lower revenue growth rates as we expect the challenges to persist. We also cut capital expenditure to reflect a slowdown in expansion. The cut in capex increases Sinopharm’s free cash flow, offsetting the lower revenue, and hence, our fair value estimate is lifted slightly to HKD 24.60 per share from HKD 23.80 per share.