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Sino Biopharmaceutical Ltd 01177

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Morningstar’s Analysis

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Sino Biopharm’s Q2 Core Operating Profit in Line; Shares Fairly Valued

Jay Lee Equity Analyst

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.

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Company Profile

Business Description

Sino Biopharmaceutical Co, or SBP, is one of the largest drugmakers in China, with CNY 24 billion revenue in 2019. Its four most important therapeutic areas are hepatitis, oncology, cardio-cerebral, and respiratory medicines. SBP’s current portfolio is mostly generics, and some key drugs are facing severe price reductions. However, it also has a rich pipeline of early-to-market generics and biosimilars, especially in oncology and respiratory treatments.

1 Harbour Road, Unit 09, 41st Floor, Office Tower, Room 4109
Hong Kong, Hong Kong
T +852 28029886
Sector Healthcare
Industry Biotechnology
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type
Employees 24,443