Analyst Note| Jay Lee |
Narrow-moat Sino Biopharmaceuticals, or SBP, reported second-quarter earnings that were in line with our expectations. Revenue for the quarter was CNY 7.1 billion, or 10% year-on-year growth, which is lower than our expectation given that it enjoys a comparison with a low base from the pandemic. However, gross profit margin jumped 5 percentage points, which brings operating profit in line with our estimate. We maintain our fair value estimate of HKD 6.50 per share, and view the stock as fairly priced right now.