UBS has released a research report reiterating its "Buy" rating on CSPC PHARMA (01093) and raising its target price from HK$10.9 to HK$11.8. The adjustment reflects the company's increased R&D spending and a downward revision in revenue forecasts for its bulk drug and functional food segments, leading to a 6% and 7% cut in earnings per share estimates for fiscal years 2026 and 2027, respectively.

Despite these near-term headwinds, the bank remains optimistic about the company's long-term revenue prospects, citing its ongoing investments in cutting-edge technology platforms as a key driver. This positive outlook underpins the decision to lift the target price while maintaining the "Buy" recommendation.

In the first half of the year, CSPC PHARMA reported a 40% year-on-year increase in revenue and a 139% surge in net profit, aligning with its earlier profit warning. Licensing fee income and finished drug sales growth both slightly exceeded the company's guidance.

For the second quarter alone, finished drug sales grew 15.9% year-on-year and 0.2% quarter-on-quarter, outperforming both the bank's and market consensus estimates. However, other business segments recorded a 5% year-on-year decline to HK$1.4 billion, falling short of expectations.