Equity Analysis /
Hong Kong

HK : The United Lab - Potential insulin GPO likely to be positive; maintain ADD

    Harry He
    Harry He

    Research Analyst

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    CGS-CIMB
    6 April 2021
    Published byCGS-CIMB

    We think the 2020 results were in line with expectations. The Company may rapidly gain market share in the potential insulin GPO. We increased our 2021/22F net profit projections by 9.8%/30.8% mainly to reflect lower finance costs, the contribution of insulin aspart, higher assumptions for insulin glargine, and a recovery in antibiotics sales. Our 2023F number doesn’t include the potential insulin GPO. Updates on the insulin GPO may provide further upside. We adjust our TP from HK$9.88 to HK$8.67 on a sum-of-the-parts valuation, mainly because of enlarged share capital from a CB conversion.