Key points from this report:
- Buy Hansoh Pharmaceutical. The stock is building the right side of a 29-week consolidation in good volume with a pivot of HKD 40.90.
- New drugs included in reimbursement list. On December 28, Hansoh’s three newly launched drugs were included in China’s National Drug Reimbursement List.
- Rich pipeline. During H1, Hansoh obtained clinical approvals of 10 drugs and filed marketing applications for an additional 10 drugs.
- Leadership position in China’s psychotropic market. Hansoh is China’s largest psychotropic pharmaceutical company in terms of revenue, with a market share of ~9%.
- Next catalyst: The company is expected to announce 2020 results in March. Consensus expects 16% y/y revenue growth and 9% y/y EPS growth in 2020. Consensus expects 25%+ revenue and earnings growth in 2021.