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3SBio Inc 01530

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Morningstar’s Analysis

Currency in HKD
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Economic Moat


Capital Allocation


3SBio’s Full Year Results in Line, Shares Undervalued but Margin Pressure and Growth Remain Concerns

Jay Lee Equity Analyst

Analyst Note

| Jay Lee |

Narrow-moat 3SBio reported revenue and earnings that were in line with our expectations. Our fair value estimate is unchanged at HKD 11.70 per share. 3SBio’s pipeline is still early-stage, and slowing growth in the existing portfolio and pressure on margins will continue to weigh on sentiment for the foreseeable future. However, shares are trading at a 40% discount to our fair value and near the five-year lows, and we generally believe that a price below HKD 7.00 offers considerably more upside than downside.

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Company Profile

Business Description

3SBio Inc, or 3SBio, is one of the largest and most established biotech drugmakers in China. In 2020, it reported revenue of CNY 5.6 billion. Approximately 75% of its revenue is derived from three core drugs: TPIAO (rhTPO), Yisaipu (biosimilar of etanercept, a TNF-alpha inhibitor), and EPIAO (rhEPO), which are all older generation biologics. The company has a pipeline of 32 products, of which 22 are biologics and 10 are small molecules, but most of the candidates are still early-stage.

No. 3 A1, Road 10, Shenyang Economy and Technology Development Zone
Shenyang, 110027, Cayman Islands
T +86 2425386000
Sector Healthcare
Industry Biotechnology
Most Recent Earnings
Fiscal Year End Dec 31, 2021
Stock Type
Employees 5,584

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