Goldman Sachs on Zhifei Biological (300122.SZ): H1 2026 Results Miss on Weak Demand; Operating Cash Flow Improves; Target Price Cut to RMB18; Buy Maintained
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
Goldman Sachs reviewed Zhifei Biological's H1 2026 results (released August 28): revenue of RMB4.024bn, down 18% year-on-year, and a net loss of RMB809mn (versus a RMB606mn loss a year earlier) both missed GS forecasts of RMB4.615bn and a RMB347mn loss. The wider loss reflects weak demand and intensifying competition for HPV9 and shingles vaccines, with price cuts to clear inventory compressing gross margin on distributed products to 11%. Operationally, however, improvement was substantial: operating cash flow reached RMB1.974bn (+22% YoY), inventory days fell from 1,102 in H1 2025 to 593 at the start of 2026 and 202 in H1 2026, and receivables days improved to 482. Goldman views renewed distribution agreements with Merck and GSK as materially de-risking operations, while the approved quadrivalent flu vaccine and pipeline rabies, PCV15 and MCV4 candidates should drive self-developed product sales; July's approval of subsidiary Chen'an Biological's liraglutide biosimilar, with insulin degludec pending filing, opens a second growth curve. GS cut its 12-month target price from RMB20 to RMB18 (share price RMB13.66) and maintained Buy, citing near-term destocking pressure but underappreciated vaccine potential among the over-50 population.