Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

RiskRisk RewardReward– Shenzhen- ShenzhenNew IndustriesNew(300832.SZ)Industries (300832.SZ)

Leading CLIA Pure Play Benefiting from Domestic Substitution/Overseas Expansion

PRICE TARGET Rmb56.00 OVERWEIGHT THESIS

We use a discounted cash flow methodology assuming a WACC of 9.0%, in line with peers, ▪Leading CLIA pure play in China with a

and a perpetual growth rate of 3.0%. Our DCF model starts from 2026. comprehensive testing menu backed by

internal R&D, broad commercialization Rmb66.88

network and proven track record.

Consensus Price Target Distribution Rmb56.00 Rmb74.10 rollout of VBP for CLIA reagent from MS PT ▪The

2024 onwards with generous guidelines andSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

rational bidding strategies by industry

players should expedite domestic

substitution with largely manageable

RISK REWARD CHART pricing/margin impact, benefitting domestic

leaders including SNIBE in the long run.

Rmb70.00Rmb70.00(+66.63%)Rmb70.00(+66.63%)(+66.63%) ▪Accelerated pace of overseas expansion in CNY

recent years with a long growth runway,

high diversification and manageable

60 geopolitical risks.

Rmb56.00Rmb56.00(+33.30%)Rmb56.00(+33.30%)(+33.30%) ▪Valuation is undemanding against the

structural growth outlook. Near-term

45 headwinds are priced in and structural thesis

Rmb42.01Rmb42.01Rmb42.01 is unchanged.

Rmb32.00Rmb32.00(-23.83%)Rmb32.00(-23.83%)(-23.83%) Consensus Rating Distribution

100%Overweight

0% Equal-weight

0% Underweight

0 MS Rating

JUL '25 JAN '26 JUL '26 JUL '27

Source: Refinitiv, Morgan Stanley Research

Key: Historical Stock Performance Current Stock Price Price Target

Source: Refinitiv, Morgan Stanley Research Risk Reward Themes

Pricing Power: Negative

Secular Growth: Positive