Morgan Stanley: SINOPHARM's (01099) Q3 results reflect that the domestic industry is still under pressure; maintains "Overweight" rating with a target price of HK$22.5

Morgan Stanley issued a research report maintaining its "Overweight" rating and HK$22.5 target price on SINOPHARM (01099). The bank noted that the company's Q3 2026 results reflect that the domestic pharmaceutical industry is still under pressure, with hospital reimbursement controls and price cuts continuing to weigh on revenue and profit margins. SINOPHARM's Q3 revenue, operating profit, and net profit calculated under Chinese Accounting Standards for Business Enterprises were RMB144.8 billion, RMB3.635 billion, and RMB1.91 billion, respectively, down 0.4%, up 6.2%, and up 3.7% year-on-year. For the first nine months of the year, revenue, operating profit, and net profit were down 0.9%, down 0.8%, and up 0.1% year-on-year, respectively. The bank noted that prescription channels remain under pressure. In Q3, revenue from the pharmaceutical distribution, medical devices, and retail segments slightly declined, remained flat, and grew by low double digits year-on-year, respectively.