Sinopharm Group (1099.HK): 3Q2026 PRC GAAP Results Still Reflective of Domestic Industry Pressures

Sinopharm reported 3Q26 revenue, operating profit and net profit of Rmb144.8bn (-0.4% YoY), Rmb3,635mn (+6.2% YoY) and Rmb1,910mn (+3.7% YoY); 9M26 trends were -0.9%, -0.8% and +0.1% YoY. Drug distribution, medical devices and retail revenues were down slightly, flat and up low double digits YoY (faster for DTP pharmacies). A slight 0.05ppt YoY GM contraction to 6.75% was offset by expense savings (OPM up 0.16ppt YoY to 2.51%). AR days fell 4 days YoY to 151, OCF was negative Rmb172mn, narrowing 97% YoY, 9M26 OCF of negative Rmb23.9bn narrowed close to 40% YoY, and gearing eased 2.6ppt YoY to 65.9%. New management has prioritized risk control over growth; reimbursement controls and hospital price cuts continued to weigh on the top line and margins, while retail is showing signs of rebound. Overweight, PT HK$22.50 (47% upside), DCF with 10.8% WACC and 2% terminal growth.