Morgan Stanley has released a report asserting that it believes the stock price of SINOPHARM (01099) is set to rise in the next 30 days, with a probability of 70% to 80%. The rating is 「Overweight,」 with a target price of HK$22.5. The report indicates that drug distributors have remained largely overlooked by the market in 2025 due to weak domestic demand and the impact of China’s technology licensing activities. Considering a 6.5 times price-to-earnings ratio for 2026, SINOPHARM is seen as having a favorable entry opportunity at this time.

Morgan Stanley explained that two subsidiaries of SINOPHARM have released their third-quarter performance, showing a positive turnaround quarter-on-quarter, which is expected to have a beneficial effect on the group. Notably, Sinopharm’s subsidiary, <600511.SH>, which acts as the distributor in Beijing and the main supplier of anesthetic drugs nationwide, reported a revenue and profit increase of 4% and 13%, respectively, year-on-year in the third quarter. Meanwhile, <000028.SZ>, the company responsible for SINOPHARM’s southern distribution network and Guoda Pharmacy chain, saw its revenue and net profit decline by 2% and 10% year-on-year in the third quarter, respectively. However, the company noted that its distribution business has now 「stabilized and is recovering growth.」