Sinopharm 1099

[winston]

Not vested

Sinopharm set to grow as net rises by Sophie He

Sinopharm Group (1099) - China's leading pharmaceutical distributor - said net profit last year rose 43.88 percent to 845.8 million yuan (HK$961.52 million). The result was below market expectations.

A final dividend of 1.01 fen per share was recommended.

The company benefited from the country's larger health-care budget. Sinopharm's revenue rose 23.2 percent to 47.05 billion yuan last year.

It raised US$1.13 billion (HK$8.81 billion) in its initial public offering in Hong Kong in September.

Sinopharm said it will continue to expand through acquisitions or setting up new branches across the country.

This follows its 1.19 billion yuan purchase of distribution branches from parent China National Pharmaceutical Group Corporation.

"The [Hong Kong] listed company would have taken over most of CNPGC's drug distribution business after these acquisitions are completed," said executive director and general manager Wei Yulin.

The acquisitions included four drug distribution subsidiaries in Xinjiang, Hubei and Beijing.

"Our short-term goal is to expand the distribution network to all 31 provinces in the mainland, excluding Tibet, this year," Wei said.

By the end of last year, the company's distribution network covered 23 provinces and its clients included 42.23 percent of the country's hospitals, as well as more than 30,000 medical institutions, retailers and distributors.

Wei said health-care reform, especially the cap on basic drug prices, will mainly affect state-owned hospitals, not large drug distributors like Sinopharm.

"The group will strive to enhance its competitive edge by strengthening risk controls and at the same time grasping new opportunities arising from market changes," the company said.


http://www.thestandard.com.hk/news_deta ... 00325&fc=7

[winston]

Not vested.

DJ MARKET TALK: Market Share Gain Main Story For Sinopharm - CS
Mar 25, 2010

1550 [Dow Jones] STOCK CALL: Credit Suisse keeps Sinopharm (1099.HK) at Outperform, target price unchanged at HK$36.00; believes lower-than-consensus net margin confirms house's non-consensus view that, instead of efficiency gain/margin improvement story, near- to medium-term story for Sinopharm is market share gain.

Adds, firm's plan for continued acquisitions also confirms that consolidation in drug distribution industry accelerated, "acquisition made at Sinopharm level should have more favorable valuations than what the market expected."

Stock +2.9% at HK$33.45, trades at 71X historic P/E; CS says Sinopharm trading at 0.7X FY11 sales per share, 15% lower than peers.


Source: Dow Jones Newswire

[winston]

Not vested.

DJ MARKET TALK: Sinopharm +4.1%; Fundamentals Remain Robust -CS

1116 [Dow Jones] Sinopharm (1099.HK) rebounds 4.1% to HK$27.70 after 4-session, 17.9% mauling, in line with big sector selloff. Sector's fundamentals intact, expected to benefit from China's healthcare reform, but lofty valuations cited as reason to sell down stocks; Sinopharm, for example, trades at 59.0X historic P/E.
Credit Suisse remains upbeat on Sinopharm, keeps Outperform call, HK$40.00 target; major investment thesis being sector consolidation. House says Sinopharm reiterates acquisition strategy of penetrating non-provincial capital city distribution network, pace of M&A "has not slowed as much as the market expected," with company recently doing several M&As, which should help Sinopharm to continue gaining market share.

( but how long does it takes to do a M&A ? )

"We believe its fundamentals remain robust and the current valuation, post sell-off, is attractive." Volume modest at HK$161.0 million vs HK$736.7 million all of yesterday.


Source: Dow Jones Newswire

[eauyong]

2010/06/29 08:41
Mirae sells 2.2m shrs in Sinopharm (01099) at HK$65.42m

<ET Net News Agency, 29 June 2010> According to the data of the Stock Exchange, Mirae
Asset has disposed 2.2 million shares (0.32% issued share capital) of Sinopharm (01099),
at HK$29.738 apiece, on 22 June 2010.
The total consideration amounted to HK$65.42 million.
Mirae's shareholding in the company has then dropped to 6.82%. (PL)

[winston]

Not vested

DJ MARKET TALK: JPM Keeps Sinopharm At Underweight; Eyes HK$20

1600 [Dow Jones] STOCK CALL: JPMorgan keeps Sinopharm (1099.HK) at Underweight, given stock's high premium vs industry average, with stock trading at 43.9X FY10 P/E, vs average 20.1X of HK/China healthcare universe.

"We believe that the organic growth of Sinopharm should be around 25%, 5.0% higher than the growth in pharmaceutical sales in China."

Adds, Sinopharm could achieve greater growth through acquisitions, but believes that uncertainty over distribution margins in 2010 and high valuation of potential targets could mean fewer and more importantly smaller targets for Sinopharm.

HK$20 target unchanged. Stock +2.4% at HK$29.90.

Source: Dow Jones Newswire

[winston]

Not vested. From UOBKH:-

Initiate coverage on Sinopharm with a HOLD.

Our fair price of HK$32.00 is based on a 37x 2011F PE, derived from 1.0x PEG. We like the company for its sound fundamentals and promising growth prospects which, however, have already been reflected in its stretched valuation.

Our entry price is HK$25.50.

Winston: 37x Forward PE ? What do u think will be the growth especially when they are now trying to cut drug prices ?

[winston]

Not vested. From UOBKH:-


• Sinopharm leading the consolidation. Sinopharm has made four major acquisitions and some 50 small ones during 1H10 to extend its footprint into almost all provinces across China. Management expects the company to at least carry on with the momentum in 2H10 and 2011, if not speeding up.

The coverage of Level 3 hospitals, the most lucrative segment, stood at 83% as of 1H10 and is expected to reach 100% by end-11.


• Two potential contributors of earnings surprise.

Besides its major battlefield in the hospital market, Sinopharm has started to explore opportunities in the following:
a) the rural markets, and
b) the medical equipment segment, both of which are likely to contribute additional
earnings growth, in our view.

The company is catching the superior growth in the new rural cooperative medical care markets by acquiring a Jiangxi company, based on which it will set up a separate division focusing on the low-tier market.

On the other hand, Sinopharm has also tapped into the equipment market by acquiring a small medical devices and consumables distributor with annual sales of Rmb100m. Management expects to ramp up equipment sales for 2011 to over Rmb200m, which, although minimal compared to Sinopharm’s overall revenue, would still add to the bottom
line given the segment’s higher profitability with 30% gross margin and 10% net margin.

[winston]

Not vested

DJ MARKET TALK: Accumulate Sinopharm On Weakness - Credit Suisse

0848 [Dow Jones] STOCK CALL: Credit Suisse raises the FY12 EPS forecast for Sinopharm Group (1099.HK) by 9%, as it expects margins to improve in 2012 when integration synergies start to materialize.

Says the average valuation of Sinopharm's FY10 acquisitions should be below 10X the current P/E, and below 15X for FY11, and that the pace of its acquisitions is still accelerating, with a presence in more than 80 non-capital cities.

Adds "we also believe drug price cuts should have a minimal impact on Sinopharm. We suggest accumulating Sinopharm on the recent share price weakness." Keeps stock at Outperform and price target at HK$40.00.

Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: Nomura Cuts Sinopharm Target 10.8% To HK$29.00

1116 [Dow Jones] STOCK CALL: Nomura cuts Sinopharm (1099.HK) target to HK$29.00 vs HK$32.50, after cutting FY11-12 earnings estimates by 3.8% and 3.0%, respectively.

But the house says after the downward earnings revision, it still expects Sinopharm to maintain profit growth of 35% and 32% FY11-12, respectively, mainly driven by 15%-20% organic market growth and the company's newly acquired assets.

The House keeps a Neutral rating on the view the valuation has declined to less than 30X FY11 P/E; house believes further downside risks should be limited.


Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK:GuocoCapital Keeps Sinopharm At Buy;HK$30.6 Target

1455 [Dow Jones] STOCK CALL: GuocoCapital says Sinopharm Group's (1099.HK) shares have dropped 28% from its all-time high of HK$38.60 on April 7, 2010 on concerns over the potential risk of a margin squeeze arising from government-driven drug price cut and overpriced acquisitions.

"In our view, the negative impact from government reform on drug pricing is minimal given a slow implementation of Essential Drug List and the company's focus on high-end products."

The house keeps the stock at Buy and it sets the target price at HK$30.60 based on 25X FY12 P/E. The stock is down 0.7% at HK27.30.

Source: Dow Jones Newswire