Investment Summary

Hengrui Medicine occupies the leading position in the domestic pharmaceutical industry. Recently, several premier medicines are waiting for approval. The company will enjoy multiple favorable conditions in the future such as the orderly approval for innovative medicines, the acceleration of the export of the preparations and the higher concentration of the generic drugs, leading to continuous growth at approximately 20% in the result. We give an estimation of 50x EPS in 2017, and the target price is RMB56.5, downgraded to the “Accumulate” rating. (Closing price as at 31 July 2017)