Citibank: Reducing the target price of Sansheng Pharmaceuticals (01530) to HK$34.4. The forecast for the impact of anti-corruption on the industry was lowered

The Zhitong Finance App learned that based on the ongoing impact of anti-corruption in the industry and VAT rate adjustments, Citibank lowered Sansheng Pharmaceuticals (01530)'s 2026-2028 revenue forecast by 18%, 9% and 4%, respectively. This year's earnings forecast per share was lowered from RMB 1.03 to RMB 0.85, and the forecast for 2027 and 2028 was raised to RMB 0.96 and RMB 1.05. The target price was lowered from HK$36 to HK$34.4, keeping the “buy” rating unchanged.

Citi claims that Sansheng Pharmaceuticals' mid-term revenue increased 4% year over year to 4.53 billion yuan. Due to changes in value-added tax rates and industry anti-corruption actions, product sales revenue fell 19% year on year. However, SSGJ-707 recorded milestone revenue of 852 million yuan during the period.

Citi expects the impact of the increase in VAT rates to continue in the second half of the year, but the outlook for product sales from 2027 to 2028 is positive, mainly driven by the increase in new products. Pfizer has conducted 9 global clinical trials on 707. It has initiated two phase III studies in the first half of the year, and plans to launch two more phase III (first-line endometrial cancer and first-line metastatic urothelial cancer) and multiple phase II studies in the second half of the year. Citi expects to record a milestone revenue of over $100 million in the second half of the year.