Morgan Stanley Upgrades Target Prices for Chinese Pharma Stocks, Remains Bullish on Sector

Intelligent Finance APP learned that Morgan Stanley issued a research report saying that it is optimistic about China's pharmaceuticals industry due to a series of favorable policies launched in China, including full support for innovation. In addition, most domestic pharmaceutical companies have low reliance on exports to the United States, making the industry relatively less affected by geopolitical issues and uncertainties in U.S. drug pricing. The bank pointed out that although legacy drugs will continue to drag down short-term growth for many companies, their contribution has already been very low. However, as these legacy drugs gradually phase out, investors can reassess the value of companies' product pipelines and catalysts.

The bank raised the target price of Hansoh Pharma (03692) from HK$25 to HK$29, maintaining an “Outperform” rating due to its high-quality product portfolio and promising growth prospects; it also increased the target price of Sino Biopharm (01177) from HK$4.6 to HK$4.9, maintaining an “Outperform” rating as the company leads industry growth with rich catalysts expected within this year; CSPC’s (01093) target price was raised from HK$6.7 to HK$6.8 because its pipeline is undervalued; all the above stocks are given an “Outperform” rating.