On August 24, HENGRUI PHARMA fell 3.03% in regular trading, trading at HKD 46.74/share, with turnover of HKD 327 million. The decline was triggered by BOCOM International issuing a research note on the same day lowering its DCF-based target price to HKD 57 while maintaining a neutral rating.

BOCOM International noted that the company's generic drug revenue declined 16% year-over-year due to local volume-based procurement impacts, while oncology innovative drug growth decelerated to just 2.6% as mature products face intensifying competition and rival products undergo procurement-driven price cuts. The broker concluded that current valuations are reasonable but potential upside remains limited.

The target price cut comes days after the company reported its first-half results on August 19, showing revenue of RMB 15.456 billion, down 1.94% year-over-year, with adjusted net profit declining 12.71% to RMB 3.73 billion. While innovative drug sales grew 16.4% to RMB 8.809 billion, accounting for 63.2% of pharmaceutical revenue, operating cash flow plunged 53.8%. The broader pharmaceuticals sector also showed weakness, with HANSOH PHARMA down 5.92% and LIVZON PHARMA down 13.32%.

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