Oppenheimer Reports On Strong 4Q For Simcere Pharmaceutical Group

In a report published Oppenheimer, Simcere Pharmaceutical Group SCR saw a strong 4Q, and growing domestic market and sales investment could lead to upside.

Oppenheimer said that SCR's 4Q was strong, with EPS of $0.16 significantly exceeding Street's consensus of $0.09, driven by a handsome top-line beat, better than expected operating margin and a tax benefit. “While drug pricing will remain a key risk, we expect SCR's strategy to focus on innovative products (proprietary and first-to-market generics), and favorable mix shift will help the company to leverage China's improving medical insurance coverage and mitigate some pricing concerns. In addition, we view SCR as a partner of choice for multinational companies, poised to benefit from MNCs' aggressive China expansion plan. Operating leverage should drive solid bottom-line growth in the next few years. Reiterating Outperform rating and $15.50 price target.”

Simcere Pharmaceutical Group closed yesterday at $12.92.