Goldman Sachs: Walvax Biotechnology (300142.SZ): Results Review: 1H26 Below Expectations; Target Price Cut to Rmb7; Sell

Walvax Biotechnology's first-half 2026 results missed Goldman Sachs forecasts on both lines: revenue of Rmb834mn, down 28% year-on-year versus Rmb1,140mn expected, and net profit of Rmb54mn (+26% YoY) versus Rmb282mn expected. Management attributed the revenue shortfall to intensifying industry competition, a declining birth rate, and the VAT rate rising from 3% to 13%. Overseas operations stayed resilient, with first-half international revenue up 14% and vaccines exported to 28 countries and regions. Goldman cut its 12-month target price from Rmb8 to Rmb7, based on a two-stage DCF with 9.5% discount rate and 2% terminal growth, and maintains its Sell rating with the stock at Rmb13.59. The core Sell argument is valuation: Walvax trades at a one-year forward P/E significantly above the China vaccine industry average, and Goldman believes the market underprices looming competition for its HPV2 and PCV13 franchises—its HPV2 sales forecasts sit 10–20% below Wind consensus. Key products are PCV13, HPV2 and meningococcal vaccines. Catalysts over the next 12 months include HPV9 clinical progress and competitor HPV/PCV13 launches. The target price has been cut repeatedly, from Rmb22 in November 2023 to Rmb8 in March 2026. Risks to the Sell view include slower HPV TAM contraction, stronger HPV sales, and new vaccines from the mRNA platform.