A research report from CMSC International indicates that CHINARES PHARMA (03320) achieved revenue of RMB 51 billion from its pharmaceutical segment in 2025, representing a year-on-year increase of 10.2%. The traditional Chinese medicine (TCM) business maintained double-digit growth, rising 13.0% annually, with TCM revenue reaching RMB 27.4 billion. TCM prescription drugs grew by 26.8%, significantly outpacing the 5.6% growth in over-the-counter products. This structural improvement, driven by the consolidation of Tianjin Tasly and increased sales of cardiovascular and cerebrovascular products, is expected to continue this year.

CMSC International has slightly raised its profit forecasts for the group for the current and next fiscal years. The target price has been increased from HK$5.9 to HK$6.3, which corresponds to a 2026 estimated valuation of less than 10 times earnings, still considered attractive. The rating remains "Add".

The report notes that while management did not provide specific revenue or profit guidance for the 2026 fiscal year, they conveyed the following qualitative signals during the earnings presentation: 1) For the 2026 reporting period, the company aims to achieve high single-digit revenue growth and a favorable growth rate in net profit; 2) The dividend payout ratio will be maintained at 30%, with consideration given to increasing the payout ratio if no major acquisitions occur, referencing the payout ratios of over 30% common among A-share listed companies; 3) Impairment pressure is expected to decrease significantly in 2025; 4) The strategy for plasma product acquisitions will continue: the company plans to complete industry consolidation by selecting the appropriate timing, location, and price, viewing entry into the plasma products sector as highly strategic.