Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

RiskRisk RewardReward– China -NationalChinaAccordNationalMedicinesAccordCorp Ltd (000028.SZ)Medicines Corp Ltd

(000028.SZ)Fast Network Expansion and Price Cuts Weighing on Earnings

PRICE TARGET Rmb16.80 UNDERWEIGHT THESIS

Base case, discounted cash flow. Key assumptions: 9.5% cost of equity, long-term ROE of ▪As a subsidiary of Sinopharm (largest drug

12.0%, 20 years to reach steady state, and a terminal growth rate of 3.0%. distributor in China), Accord's product mix is

heavily skewed toward prescription Rmb26.74

medicines, which are under price cut

Consensus Price Target Distribution Rmb16.80 Rmb36.33 pressures that affect Accord's distribution

MS PT

and retail businesses.Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates ▪Store closures across the pharmacy

industry are also putting pressure on the

top line; we project revenue and earnings

RISK REWARD CHART CAGRs of 1.0% and 0.1% (2025-28e),

respectively.

the stock trading at a P/E of 10.8x CNY ▪With

(2026e), we see additional downside risk as

core business growth remains minimal or

Rmb29.00Rmb29.00(+45.73%)Rmb29.00(+45.73%)(+45.73%) flat. 32

Consensus Rating Distribution

Rmb19.90Rmb19.90Rmb19.90 60% Overweight

0% Equal-weight

16 Rmb16.80Rmb16.80(-15.58%)Rmb16.80(-15.58%)(-15.58%)

40% Underweight

MS Rating

8 Source: Refinitiv, Morgan Stanley Research

Rmb7.20Rmb7.20(-63.82%)Rmb7.20(-63.82%)(-63.82%)

0 Risk Reward Themes

JUN '25 DEC '25 JUN '26 JUN '27

Secular Growth: Negative

Key: Historical Stock Performance Current Stock Price Price Target View descriptions of Risk Rewards Themes here

Source: Refinitiv, Morgan Stanley Research

BULL CASE Rmb29.00 BASE CASE Rmb16.80 BEAR CASE Rmb7.20

15.6x bull case 2026e EPS 9.1x base case 2026e EPS 4.0x bear case 2026e EPS