Sinopharm's First-Half Results in Line; Shares Undervalued

Narrow-moat Sinopharm’s first-half revenue and profit margins were in line with our expectations. The firm once again increased its debt, bringing its net debt/equity ratio up from 4% at the end of 2020 to 43% at the end of June, which is in line with our expectation. Our fair value estimate is unchanged at HKD 29.50 per share; the shares are 32% undervalued relative to our valuation.