SINOPHARM (01099) surged over 3%, reaching a yearly high of HK$20.86. At the time of writing, the stock was up 3.49% to HK$20.78, with a trading volume of HK$111.2 million.

Previously in October, Morgan Stanley issued a research report expressing confidence that SINOPHARM's share price would rise within the next 30 days, with a 70%-80% probability. The firm maintained an "Overweight" rating and set a target price of HK$22.5.

Morgan Stanley noted that pharmaceutical distributors, including SINOPHARM, have been overlooked by the market in 2025 due to weak domestic demand and licensing activities in China. However, based on a 2026 P/E ratio of 6.5x, the bank believes SINOPHARM currently presents a favorable entry point.

The report highlighted that two of SINOPHARM's subsidiaries reported third-quarter results showing sequential improvement, positively impacting the group. Specifically, subsidiary SINOPHARM Group Co., Ltd., the group's Beijing distributor and a major national supplier of anesthetic drugs, posted 4% revenue growth and 13% profit growth year-on-year in Q3, marking a positive turnaround.

Meanwhile, another subsidiary, responsible for SINOPHARM's southern distribution network and retail pharmacy chain, saw a 2% revenue decline and 10% net profit drop in Q3. However, the company indicated that its distribution business had "stabilized and resumed growth."