Goldman Sachs lowers UNITED LAB sales and profit forecasts, target price raised to 16.07 yuan

Goldman Sachs lowered the sales forecast for UNITED LAB (03933.HK) for this year to 2027 by 17.7% to 17.8%, and the profit forecast was cut by 28.4% to 35.6%. It is expected that the price cycle for active pharmaceutical ingredients for antibiotics will be weak in the next two years, while the sales forecast for high-margin insulin products has been raised by 27% to 30%, benefiting from incremental sales brought by exports.

The firm raised its target price for the stock from HKD 15.29 to HKD 16.07, maintaining a "Neutral" rating. The firm indicated that the company's sales in the first half of the year increased by 5% year-on-year to RMB 7.5 billion, while core business revenue fell by 15% year-on-year to RMB 6.1 billion, which was below the firm's expectation of RMB 6.5 billion. Profit increased by 27% year-on-year to RMB 1.9 billion, but core profit declined and was below the firm's expectations. The firm noted that the gross margin of intermediates and bulk pharmaceuticals was eroded, and increased administrative expenses due to business expansion consulting fees