Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

Risk Reward – Fosun Pharmaceutical (2196.HK)

KEY EARNINGS INPUTS

Drivers 2025 2026e 2027e 2028e

Manufacturing sales (Rmb, mn) 29,833 30,925 31,396 33,395

Research and development Margin

9.6 9.6 9.6 9.6

(%)

Diagnostic products and medical

4,321 4,364 4,451 4,629

device sales (Rmb, mn)

Healthcare services sales (Rmb, mn) 7,373 7,668 8,051 8,453

INVESTMENT DRIVERS RISKS TO PT/RATING MS ESTIMATES VS. CONSENSUS

CFDA & US FDA approval of new products RISKS TO UPSIDE FY Dec 2026e

Government policies Strong sales ramp-up of biosimilars

Volume uplift from NRDL implementation Quick uptake and label expansion of CAR-T Sales / 43,078.3

Quarterly earnings therapy Revenue Note: There are not sufficient brokers supplying

Favorable government policy (Rmb, mn) consensus data for this metric

GLOBAL REVENUE EXPOSURE Early launch of products

RISKS TO DOWNSIDE

0-10% MEA Government control over drug prices 7,180 0-10% North America EBITDA

Significant pipeline setbacks (Rmb, mn) Note: There are not sufficient brokers supplying 10-20% Europe ex UK

Generic and biosimilar VBP consensus data for this metric 70-80% Mainland China

Rising valuations for hospital M&A

Source: Morgan Stanley Research Estimate

View explanation of regional hierarchies here OWNERSHIP POSITIONING 3,994

Net income

Inst. Owners, % Active 34.1% (Rmb, mn) Note: There are not sufficient brokers supplying

MS ALPHA MODELS consensus data for this metric

Source: Refinitiv, Morgan Stanley Research

3/5 3 Month

MOST Horizon 1.5

EPS

Source: Refinitiv, FactSet, Morgan Stanley Research; 1 is (Rmb) Note: There are not sufficient brokers supplying

the highest favored Quintile and 5 is the least favored consensus data for this metric

Quintile

Mean Morgan Stanley Estimates

Morgan Stanley Research 3