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<Research> China Merchants Securities (HK) Raises TP of CHINA RES PHARM (03320.HK) to HKD6.3, Rating 'Overweight'
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According to a research report by China Merchants Securities (HK), CHINA RES PHARM (03320.HK) is expected to achieve revenue of RMB51 billion from its pharmaceutical business segment in 2025, representing a year-on-year growth of 10.2%. The traditional Chinese medicine segment maintains double-digit growth with an annual increase of 13.0%, generating RMB27.4 billion in revenue. The growth rate of prescription traditional Chinese medicine is 26.8%, significantly exceeding the 5.6% growth of OTC products, benefiting from the consolidation of Tasly and structural improvements in cardiovascular and cerebrovascular products. This trend is expected to continue this year. The firm noted that management did not provide specific revenue or profit guidance for the fiscal year 2026, but conveyed the following qualitative signals during the earnings call: 1) Aim for high single-digit revenue growth and a good growth rate in net profit for the fiscal year 2026; 2) Maintain a dividend payout ratio of 30%, with consideration to increase the payout if there are no major acquisitions, referencing the A-share listed companies' payout ratio of over 30%; 3) Impairment pressure is expected to significantly decrease in 2025; 4) The strategy for blood products acquisition will continue: completing industry consolidation at the right time, place, and price, entering the blood products sector with strong strategic intent. China Merchants Securities (HK) slightly raised its earnings forecast for the group for this year and next, increasing the target price from HKD5.9 to HKD6.3, corresponding to a forecast valuation of less than 10 times for 2026, which remains attractive; the rating is 'Overweight'. (hc/w) AASTOCKS Financial News Website: www.aastocks.com Auto-translated by third-party software This translation was auto-generated by third-party software. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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