CR Pharma’s 2021 Interim Results in Line, Sentiment to Remain Weak

Narrow-moat CR Pharma reported interim results that were in line with our expectations. Revenue was CNY 114.5 billion for the six months, which is a 28% increase compared with last year’s low base due to COVID-19. Note that this is only slightly ahead of our full-year target of CNY 212 billion, which is only 4% year-on-year growth, and we do not expect double-digit growth for the second half. Gross profit margin fell by 1.38 percentage points, although we estimate some of this is due to last year’s high base, which enjoyed higher margins from the export of anti-pandemic supplies.