Credit Suisse Downgrades China Biologic Products To Neutral

Credit Suisse's Iris Wang downgraded the rating on

to Neutral, while raising the price target to HK$129. The downgrade was based on valuation, as well as the lack of positive catalysts over the coming 12 months. The company reported 25.6 percent year on year growth in earnings for FY15. The non-GAAP EPS rose 32.4 percent, ahead of the consensus expectations. Excluding FX impact, the EPS would have grown 34 percent year on year. IVIG revenue grew 27.1 percent year on year in FY 5, driven by the company's "continued efforts to promote IVIG therapy to physicians," the analyst said. Both human albumin sales and average price of human albumin/IVIG increased during the year. In addition, plasma collection volumes rose 17.2 percent year on year to 740 tons. According to the Credit Suisse report, "Products made from the remaining 60% of the 143 tons of plasma sourced from Deyuan are expected to launch in the market in 1H16. Under the other agreement to purchase 500 tons of plasma from Deyuan, ~19 tons has been shifted to CBPO." Management has guided to top line growth of 21-23 percent for FY16, with bottom line growth of 24-26 percent in Rmb terms. The FY16 and FY17 EPS estimates have been raised by 9.1 percent and 7.5 percent, respectively, to reflect stronger than expected plasma collection.