Shanghai Pharmaceuticals Third-Quarter Results in Line, H-Shares Remain Deeply Undervalued

Narrow-moat Shanghai Pharmaceuticals, or SPH, posted third-quarter results that are in line with our estimates. Although sentiment remains negative due to a lack of catalysts and growth that is slower than its peers, the H-shares trade at a 35% discount to our fair value and we view them as attractive long-term investments. By contrast, the A-shares are at a 5% discount to our fair value.