Sino Biopharm’s Q4 Earnings Miss Again, FVE Unchanged at HKD 6.50 per Share

Narrow-moat Sino Biopharmaceutical, or SBP, reported fourth quarter earnings that underperformed our core operating profit estimate, primarily due to high sales, general, and distribution costs, or SG&A. We maintain our fair value estimate of HKD 6.50, and although the stock trades at an 18% premium to this it remains a 3-star stock given its very high uncertainty rating and within the range of what we consider a fair price. After falling more than 40% peak-to-trough last year, we think SBP should enjoy better sentiment this year due to ramp-up of new drug sales, as well as the likely approval of its PD-1 drug, penpulimab.