CR Pharma's Interim Results in Line; Top Line Disappoints, but Profit Margins Robust

Narrow-moat CR Pharma reported interim results with very disappointing revenue, but robust profit margins brought earnings in line with our expectations. Our fair value estimate is unchanged at HKD 6.40 per share. The shares trade at a 30% discount to our valuation, although we caution investors that sentiment toward drug distributors is likely to remain negative for the foreseeable future due to lack of catalysts and investor focus on high-growth biotech firms.