Sinopharm 1099

[winston]

Grey market is now 20%

[winston]

Sinopharm set to sizzle by Mandy Lo, The Standard HK

Sinopharm Group (1099), the most popular listing candidate this year, saw its share price soar as much as 30 percent in the gray market yesterday.

Phillip Securities said Sinopharm closed at HK$20.15 - 26 percent higher than its offer price of HK$16. Shareholders could earn a paper gain of HK$1,660 per board lot of 400 shares.

Turnover hit HK$64.52 million with 3.21 million shares changing hands.

Sinopharm got 423,277 applications from retail investors for 31.1 billion shares - 570 times the public offering size of 54.568 million shares.

The stock, which will start trading today, is expected to have support at HK$21 due to the oversubscription, said Bright Smart Securities managing director Nelson Chan.

"The valuation of Sinopharm is not cheap and could reach some 40 times its estimated earnings if it rises above HK$20," Chan said.

"But investors can keep it as a long- term investment if they are patient enough to hold for one year."

http://www.thestandard.com.hk/news_deta ... 90923&fc=4

[winston]

High 19.74; IPO Price 16; Just got out ; PE 40 ? Crazy ...

[winston]

Sinopharm profits surge 44pc by Benjamin Scent, The Standard HK

Newly-listed Sinopharm Group (1099), China's biggest drug distributor, said yesterday that first-half net profit jumped 44.6 percent as it boosted profit margins and expanded its market share.

Net profit for the six months ended June 30 rose to 476.57 million yuan (HK$540.87 million) from 329.49 million yuan for the same time last year.

Revenue rose 20.4 percent year-on- year to 22.01 billion yuan.

"The group is well positioned to benefit from the health care reform plan and PRC pharmaceutical industry trends," chairman She Lulin said.

Beijing plans to spend an extra 850 billion yuan on health care by 2011 as part of an industry reform plan launched in April.

Sinopharm said revenue from pharmaceutical distribution, where it gets most of its revenue, rose 20.1 percent to 20.56 million yuan as it added new hospital customers and sold more products to existing customers.

The Shanghai-based company said it added more community clinics to its distribution network during the period. Sales from Sinopharm's retail pharmacy operations rose 27.4 percent year-on-year to 571.81 million yuan.

Net profit margin rose to 2.2 percent, up from 1.8 percent for the same time last year. No interim dividend was declared to Sinopharm's public shareholders, as the results period closed before the firm's listing on the Hong Kong bourse.

Earlier this month, Sinopharm raised 7.41 billion yuan in a Hong Kong initial public offering that was almost 600 times oversubscribed, making it the most popular new listing so far this year.

Its shares climbed 15.8 percent on their first day of trading. They closed Friday at HK$20, up 25 percent from the initial public offering price of HK$16.

Sinopharm operates a network of 25 distribution centers in 19 provinces that directly serves 4,791 hospitals or about 38.5 percent of all hospitals in China.

http://www.thestandard.com.hk/news_deta ... 90928&fc=1

[winston]

Right remedy arrives to soothe IPO frenzy

With so many firms going public recently, Dr Check feels rather than rushing in, it is better to wait for a few weeks and see how the newly listed companies fare on the bourse.

Sinopharm (1099) is among the best of the new shares.

The firm is the largest distributor of pharmaceutical and health-care products in the mainland, handling more than 22,000 items from 3,300 domestic and overseas firms.

Beijing is spending 850 billion yuan (HK$964.52 billion) to reform the national health-care sector. This will include further consolidation of the fragmented pharmaceutical distribution industry.

Sinopharm's revenue grew at a compound annual growth rate of 26.8 percent while net profit rose at a CAGR of 140 percent from 2006 to last year.

In the five months to May, net profit hit 421 million yuan, up 42 percent year-on-year. The IPO was priced at HK$16 a share. Most short- term investors sold after a few days at around HK$19 to HK$20.

Sinopharm then climbed steadily, reaching HK$25.30 yesterday, or a price-earnings ratio of 64 for 2009.

The valuation is high but if you believe the firm will continue to grow, get the stock near HK$24.50.

http://www.thestandard.com.hk/news_deta ... 91023&fc=8

[winston]

Not vested.

DJ MARKET TALK: Morgan Stanley Upgrades Sinopharm To Overweight

1001 [Dow Jones] STOCK CALL: Morgan Stanley upgrades Sinopharm (1099.HK) to Overweight from Equal-weight, raises target price to HK$35 from HK$30; broker says learned from recent meeting with Sinopharm management both drug sales in hospitals, pace of M&A exceeding market expectations.

"These positive surprises are confirmed by our channel checks and the latest government data," broker says; raises 2010 M&A revenue projection by 70%, which leads to 6%-7% EPS upside for 2010-13. Adds, new price target implies 37.6X FY11 P/E, but given industry dominance, expected growth of more than 50% in 2010;

"we think Sinopharm's premium valuation is justified." Stock indicated +3.6% at HK$29.85 at pre-open.

Source: Dow Jones Newswire

[winston]

Not vested.

DJ MARKET TALK: Sinopharm Growth to Re-accelerate 2010 - Citi

1422 [Dow Jones] STOCK CALL: Citigroup expects Sinopharm (1099.HK) "growth to re-accelerate" in 2010, cites key takeaways from recent meeting with management for keeping stock at Buy with HK$33.00 target.

Expects FY10 sales will be strong (+30% on-year), aided by geographic expansion, new distribution center; adds, new management team well positioned to deliver growth.

In near term, expects stock could be volatile, trade higher due to investors' high top-, bottom-line expectations in 2010-12; Sinopharm's unique strength within China's healthcare sector; increased expectations of strategic acquisitions with strong financial position, as China's drug distribution industry set for consolidation. Stock down 2.5% at HK$31.00 midday

Source: Dow Jones Newswire

[winston]

Not vested. From Dr. Check, The Standard HK:-

As stock selection is very important, consider the impact of Beijing's recent efforts to reform the medical sector that, in turn, is bound to benefit its domestic pharmaceutical industry.

Sinopharm (1099) is a share I have recommended before. The stock price renewed the record high of HK$34.65 on Monday.

The firm is the largest distributor of pharmaceutical and health-care products in China, handling more than 22,000 items from 3,300 domestic and overseas companies. Beijing's plan to spend 850 billion yuan (HK$966.59 billion) on health-care reform will further consolidate the fragmented pharmaceutical distribution industry.

I suggested buying the stock at HK$24.50 in November. It closed yesterday at HK$34.05, near JPMorgan's target of HK$36.

Sinopharm's net profit grew at a compound annual growth rate of 140 percent from 2006 to 2008. If you believe it can maintain stellar growth, buy the stock when it dips near HK$33.

http://www.thestandard.com.hk/news_deta ... 00225&fc=7

[winston]

Not vested.

DJ MARKET TALK: Sinopharm Falls 1.3%; Buys Units From Parent

1511 [Dow Jones] Sinopharm (1099.HK) down 1.3% at HK$33.70, reversing early gains likely due to profit taking after recent rise. Not gaining much support from news (announced yesterday after market close) it's buying distribution units from controlling shareholder, China National Pharmaceutical Group Corp, as its rich valuation (52.7X FY10 P/E based on Thomson Reuters, vs HSI's 17.2X) likely limiting upside in shares (intraday high at HK$34.85);

while recent outperformance may have priced in M&A leads (stock +16.6% month-to-yesterday, vs HSI's 1.4% gain in same period); Sinopharm plans to buy 100% interest in each of Guangdong Dong Fang and Hebei Traditional & Herbal Medicine at CNY95 million and CNY27 million, respectively.

"Sinopharm will remain a core long term investment target for large institutional investors," says DBS. Adds, identified catalysts from its strong M&A pipeline will support Sinopharm's large P/E premium relative to peers in sector. Tips near term upside limited from valuation perspective, but there could be entry opportunities at HK$30 levels given likely profit-taking after share moratorium ends in late March. House starts stock at Hold.

Source: Dow Jones Newswire

[winston]

Not vested.

DJ Sinopharm Group 2009 Net Profit Rises 44% To CNY845.8 Mln

HONG KONG (Dow Jones)--Sinopharm Group Co. (1099.HK), China's largest pharmaceutical products distributor by sales, said Wednesday its net profit rose 44% last year, as rising consumer demand in China spurred purchases of healthcare products.

Sinopharm, which raised US$1.13 billion in an initial public offering in Hong Kong in September, said in a statement its net profit for the 12 months ended Dec. 31 totaled CNY845.8 million (US$124 million), up from CNY587.6 million in 2008.

The result was slightly above the company's estimate of no less than CNY840 million in its IPO prospectus.

Revenue rose 23% to CNY47.05 billion from CNY38.19 billion.

The company declared a final dividend of CNY0.0101.

Sinopharm acquired two drug distributors--one in Guangdong province and one in Hebei province--in February for a total of CNY122 million. The company said earlier it has a 10% share of China's healthcare products distribution market.

Source: Aries Poon, Dow Jones Newswires