Oppenheimer Has Perform on Simcere Pharmaceutical Group

Oppenheimer & Co. is out with a research report on Simcere Pharmaceutical Group

and it has a Perform rating. In a note to clients, Oppenheimer & Co. writes, "SCR reported an 8.9% yoy sales decline due to under-performance of Edaravone and "other branded generics" (-20%yoy), caused by pricing pressure and ongoing provincial drug tenders. Edaravone declined 5.3% yoy, while Endu grew nicely at 20% yoy, attributable to improving efficiency of the sales team. EPS of $0.10 missed Street's $0.15 estimate, due to higher selling and R&D expenses caused by lower than expected sales. Meanwhile, A/R days and inventory days increased significantly on both qoq and yoy basis. Management believes long-term volume growth opportunity exists for SCR with improved affordability but believe it will be after several quarters. We lower our 4Q11 revenue/GAAP EPADS estimates to RMB577M/$0.15. Maintain Perform." Shares of SPAR are off 17 cents to $4.78, a loss of 3.45%.