CSPC Earnings: Management Tone Disappoints the Market but Our FVE Is Unchanged With In-Line Results

We keep our fair value estimate of narrow-moat CSPC at HKD 8.30 per share following largely in-line interim results. We note that the market was disappointed leading to a 5.7% drop in CSPC’s share price, and we think management’s less optimistic tone on sales growth following lagging oncology drug sales may weigh on near-term sentiment. However, we think the shares are undervalued and the slowdown in oncology drug sales should be temporary. Our long-term view on CSPC remains unchanged.