The Zhitong Finance App learned that CICC released a research report saying that Sinopharm Holdings (01099) achieved operating income of 427.613 billion yuan in the first three quarters of 2026, down 0.90% year on year; net profit to mother was 5.314 billion yuan, up 0.13% year on year, and the results were in line with the forecast. The bank maintained the company's 2026 and 2027 net profit forecasts of $7.527 billion and $7.918 billion respectively, maintaining a “outperforming industry” rating and a target price of HK$21.25, corresponding to the 2026 and 2027 projected price-earnings ratios of 7.6 times and 7.0 times, respectively, with 33.40% room for growth compared to the current stock price.
CICC's main views are as follows:
Net profit increased year-on-year in the third quarter
In the third quarter of 2026, the company achieved operating income of 144.814 billion yuan, a year-on-year decrease of 0.43% and a month-on-month increase of 1.96%; net profit to mother was 1,910 billion yuan, up 3.74% year-on-year and 4.02% month-on-month. The bank believes that the company is expected to actively consolidate its leading position in the industry by promoting differentiated and sub-regional business development strategies and speeding up the optimization and adjustment of the business structure.
The net profit of NUS Pharmacies increased sharply year-on-year in the first three quarters
In the retail sector, in the first three quarters of 2026, the subsidiary Guoda Pharmacy achieved operating income of 15.234 billion yuan, an increase of 0.05% over the previous year; net profit of 0.27 million yuan, an increase of 105.08% over the previous year.
In the device sector, the subsidiary China Medical Devices achieved revenue of 55.262 billion yuan in the first three quarters of 2026, up 1.04% year on year; operating profit of 856 million yuan, down 11.07% year on year.
The bank believes that sales revenue from National University Pharmacies is gradually stabilizing, and the company is expected to improve the quality of operations by continuously optimizing the product structure, strategically adjusting the store layout, and further strengthening cost control.
Both gross margin and expense ratio declined year-on-year
In the first three quarters of 2026, the company's gross margin was 7.0%, down 0.3 percentage points year on year; sales expenses ratio was 2.6%, down 0.1 percentage points year on year; management expenses ratio was 1.1%, down 0.03 percentage points year on year; and financial expenses ratio was 0.3%, down 0.1 percentage points year on year. In the third quarter of 2026, the company's gross margin was 7.5%, the same as the previous year.
The bank believes that in the future, the company is expected to achieve cost control and efficiency improvement through refined management and digital empowerment.
Risk Alerts
Centralized drug procurement pressure; retail and device distribution business growth fell short of expectations.