Morgan Stanley analyst Laurence Tam maintained a Buy rating on Sinopharm Group Co today and set a price target of HK$22.50.
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Laurence Tam has given his Buy rating due to a combination of factors that suggest potential for Sinopharm Group Co’s stock. Despite challenges in the medtech segment, particularly with CNMDC, which is a significant part of Sinopharm’s operations, the revenue decline was not as severe as initially projected. This indicates resilience in their business model amidst external pressures.
Furthermore, the focus on operational cash flow trends in the upcoming reports suggests a strategic approach to managing financial health. The company’s ability to navigate through the ongoing disciplinary campaigns in China’s public hospitals and adapt to shifting product mixes and pricing strategies also supports the positive outlook. These elements combined provide a basis for the Buy rating, reflecting confidence in Sinopharm’s capacity to maintain and potentially enhance its market position.