FAST NEWS: Sihuan Pharma stock skyrockets on latest share buyback program

The Latest: Sihuan Pharmaceutical Holdings Group Ltd. (0460.HK) on Sunday announced a new program to purchase up to HK$500 million ($64 million) worth of its shares on the open market over the next 12 months.

Looking Up: The company has a strong portfolio of nearly 20 self-developed innovative drugs and diabetes biosimilars that have been approved for sale, which may underpin its belief that its shares are undervalued.

Take Note: Funds required for the new buyback would represent 11% of Sihuan’s cash of about 4 billion yuan ($570 million) as of the end of June this year, based on the price at the time of the announcement.

Digging Deeper: Founded in 2001 and listed in Hong Kong in 2010, Sihuan originally specialized in the production of cardiovascular and oncology generic drugs, and is one of the largest cardiovascular prescription drug suppliers in China. In February 2021, it entered the medical aesthetics business with its exclusive launch of wrinkle-reducing Botox “Letybo,” the fourth type-A Botox product approved for sale in China. In the first half of 2024, its revenue fell 10% to 950 million yuan, affected by a nearly 30% drop in revenue from generic drugs. However, its revenue from medical aesthetics products surged 66.4% to 320 million yuan.

Market Reaction: Sihuan shares surged on Monday, closing up 23.6% at HK$0.89 by the midday break, a 52-week high.

Translation by A.Au

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