Lyon: Maintain the "Outperform Market" rating for CHINARES PHARMA (03320), with a target price revised down to HKD 6.5.

Lyon has released a research report stating that it maintains a "buy" rating for CHINARES PHARMA (03320). Based on mid-term performance, it has lowered its revenue forecasts for 2026 to 2028 by 3.4%, 7%, and 9.7% respectively. The sales forecast for the pharmaceutical business has been reduced by 7.8%, 14.3%, and 19.6% respectively, and the net profit forecast has been lowered by 6.4%, 10.8%, and 20.1%. The target price has been adjusted from HKD 7.2 to HKD 6.5. CHINARES PHARMA's mid-term revenue grew 2% year-on-year, while net profit increased by 5.3%, roughly in line with market expectations. During this period, gross margin and operating profit margin fell by 0.3 and 0.4 percentage points respectively, primarily due to pressure on the profit margin of the distribution business. Sales in the pharmaceutical business declined by 1.5% year-on-year, affected by weakened contributions from the integration with Tasly Pharmaceutical Group, a drop in sales of flu-related products, and reduced sales in the blood products business, partially offset by a 2.7% increase in active pharmaceutical ingredient (API) sales and a 17.6% increase in sales of nutritional health products.