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The stock price of Fosun Pharma is in a downward trend in the medium and long term, and the risk of short-term correction is high

Fosun Pharma‘s stock trading strategy: 2022.3.17 From the technical graph, today’s stock price rose and fell, with an all-day trading volume of 6.385 billion yuan, closing at 49.22 yuan, up 7.47%. There is a very obvious short-term capital game. The stock price is in a downward trend in the medium and long term. The short-term rebound is strong, but the upper space is limited.

Today, it sold 3.6 billion yuan in the continuous fall, and the risk of short-term correction is high. Short-term trading can participate in a small amount of games without falling below the 10-day moving average. Below the 10-day moving average, it is recommended to leave. From a fundamental point of view, according to the third quarter report, the operating income growth rate is about 20%, and the price-earnings ratio is 26 times. At present, there is still some room for downside.

It is not recommended to hold for a long time, and the reasonable fluctuation range of the stock price is between 28 yuan and 42 yuan (calculated according to the third quarter report). As of September 30, the number of shareholders: 297,900. The retail investors are serious, the shareholding is scattered, and there are few institutions.

Historical forecast records:

2021.10.29 From the technical chart, the stock price is in a downward trend, and there is no trending market. The recent fluctuation range is expected to be between 40-50 yuan, and the probability of a downward breakthrough is higher.

Fosun Pharma announced on October 26, 2021: In the third quarter of 2021, the operating income was 10.096 billion yuan, a year-on-year increase of 25.03%, the net profit attributable to shareholders of the parent company was 1.082 billion yuan, an increase of 41.62% year-on-year, and the net profit after deduction was 9.05%. 100 million yuan, an increase of 19.84% year-on-year, and an EPS of 0.42 yuan. The weighted average return on equity is 2.60%.

In the third quarter of 2021, the Group achieved an operating income of RMB 10.096 billion, a year-on-year increase of 25.03%, and a net profit attributable to shareholders of the listed company of RMB 1.082 billion, a year-on-year increase of 41.62%. Net profit was 905 million yuan, a year-on-year increase of 19.84%; net cash flow from operating activities was 1.309 billion yuan, a year-on-year increase of 31.96%; R&D investment totaled 1.197 billion yuan, a year-on-year increase of 15.10%, of which R&D expenses were 852 million yuan, a year-on-year increase 178 million yuan, an increase of 26.41%.

Since July 2021, the Group has continued to promote the development and implementation of innovative products and technologies, and strengthened the commercialization system:

  1. After the sales of Fubitai (mRNA new crown vaccine) to Taiwan, China was signed in July, the supply and vaccination started in late September; as of October 24, more than 9.7 million doses have been vaccinated in Hong Kong, Macao and Taiwan.
  2. After the joint venture company Fosun Kite’s Yikaida (Ajilunsai injection) was listed, it actively explored innovative payment models, and it has been included in the “Huiminbao” payment scope in Changsha, Suzhou and other cities, adding this product Accessibility, benefit more patients; at the same time, the second indication of the product (for the treatment of relapsed or refractory indolent non-Hodgkin lymphoma (r/r iNHL) after receiving second-line or more systemic therapy) In August 2021, it was included in the breakthrough therapy drug program by the State Food and Drug Administration.
  3. The research and development and commercialization of macromolecular drugs are steadily advancing. The production line of slulimumab injection (ie recombinant anti-PD-1 humanized monoclonal antibody injection) in Xuhui base passed the GMP on-site inspection in September 2021. Drug registration applications for two indications were accepted by the State Food and Drug Administration in September 2021; trastuzumab for injection (trade name: Hanquyou) was approved to add a 60mg specification, further enriching clinical drug options.
  4. Tridem Pharma, one of the overseas marketing platforms, opened its first regional distribution center in Africa to optimize supply chain capabilities in Africa.

Fosun Pharma announced on 2021.10.26 that: in the first three quarters of 2021, its operating income was 27.048 billion yuan, a year-on-year increase of 22.38%. The net profit attributable to shareholders of the parent company was 3.565 billion yuan, a year-on-year increase of 43.80%. The net profit after deduction was 24.75 million yuan. 100 million yuan, an increase of 20.19% year-on-year, and an EPS of 1.39 yuan. The weighted average return on equity is 9.15%.

In the first three quarters, the Group achieved a cumulative operating income of 27.048 billion yuan, a year-on-year increase of 22.38%; realized a net profit attributable to shareholders of listed companies of 3.565 billion yuan, a year-on-year increase of 43.80%; realized a net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses.

Profit was 2.475 billion yuan, up 20.19% year-on-year; net cash flow from operating activities was 3.016 billion yuan, up 22.94% year-on-year; R&D investment totaled 3.151 billion yuan, up 15.46% year-on-year, of which R&D expenses were 2.414 billion yuan, up 5.36 percent year-on-year 100 million yuan, an increase of 28.54%. The Group’s gross profit margin for the first three quarters was 50.53% and sales expense ratio was 25.19%, representing a year-on-year decrease of 5.3 percentage points and 3.2 percentage points respectively.

The main reasons for the decline in gross profit margin are: 1. The impact of Fubitai (mRNA new crown vaccine). The operating cost of Fubitai (mRNA new crown vaccine) includes (1) procurement costs; (2) gross profit sharing to be paid to BioNTech in accordance with the “License Agreement”; (3) corresponding sales milestones (“License Agreement” stipulates that when Sales milestones totaling $70 million are payable when intra-regional sales exceed $500 million for the first time.

The corresponding sales milestones are accrued for the first three quarters under the License Agreement). Combining the above factors, the current gross profit margin of Fubitai (mRNA new crown vaccine) is lower than the overall gross profit margin of other products. 2. After the selection in centralized procurement, the gross profit margin of stock varieties such as Youlitong (Febuxostat Tablets) and Bangzhi (Pitavastatin Calcium Tablets) decreased.

Goldman Sachs lowered the target price of Fosun Pharma (02196) from HK$72.11 to HK$68.7, maintaining a “Neutral” rating.

2021.8.26 From the technical chart, the stock price has risen and fallen significantly. Today, the heavy volume fell again by 9%, and the selling pressure is obvious. Focus on the support strength near 50 yuan below. If it does not fall below, it is expected to form between 50-55. Range-bound pattern, but this probability is low, because the valuation is obviously too high.

In addition, today has fallen below the previous consolidation platform, and the probability of a downward breakthrough is higher. From a fundamental point of view, the stock price has a high premium, and it is not recommended to hold for a long time. The company’s stock price around 35 yuan is a better buy point.

Further reading:

Fosun Pharma: Fosun Pharma 2021 Third Quarter Report.pdf

Fosun Pharma: Net profit of 2.482 billion yuan in the first half of 2021, a year-on-year increase of 44.77%

Stock code: 600196.SS 02196.HK

Company Name: Shanghai Fosun Pharmaceutical (Group) Co., Ltd.

English name: Shanghai Fosun Pharmaceutical(Group)Co.,Ltd.

Company website: http://www.fosunpharma.com

Main business: pharmaceutical, medical equipment and medical diagnosis, medical and health services.

Product name: Core products in the field of cardiovascular disease treatment, core products in the treatment field of central nervous system diseases, core products in the treatment field of blood system diseases, core products in the treatment field of metabolic and digestive system diseases, core products in the treatment field of anti-infective diseases, anti-tumor treatment Field core products, APIs and intermediate core products

The ultimate controller: Guo Guangchang (the proportion of shares held by Shanghai Fosun Pharmaceutical (Group) Co., Ltd.: 22.39%)

Tel: 86-021-33987870

Total number of shareholders (households): 297,900 (deadline 2021-09-30)

Number of employees: 34375

Chairman: Wu Yifang

Office Address: Building A, No. 1289, Yishan Road, Putuo District, Shanghai

Income statement for the last 5 years

Shanghai Fosun Pharmaceutical (Group) Co., Ltd. is based on pharmaceutical manufacturing and research and development, and its business covers medical devices and medical diagnosis, medical services, pharmaceutical distribution and retail.

The main products are the core products in the treatment field of cardiovascular system diseases, the core products in the treatment field of central nervous system diseases, the core products in the treatment field of blood system diseases, the core products in the treatment field of metabolic and digestive system diseases, the core products in the treatment field of anti-infective diseases, and the anti-tumor treatment. Field core products, APIs and intermediate core products.

According to the 2018 Top 100 Enterprises in China’s Pharmaceutical Industry issued by the China Pharmaceutical Industry Information Center of the Ministry of Industry and Information Technology of the People’s Republic of China, the Group ranked 7th; according to IQVIA statistics, the sales revenue of hospital prescription drugs produced by the Group ranked 1st in the country in 2019. 10.

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