Sunshine Lake Pharma Co., Ltd. (06887.HK) – IPO Investor Fact Sheet

(Main Board, Hong Kong Stock Exchange – Expected Listing: June 2025)

IPO Snapshot

• Ticker: 06887.HK

• Market: Main Board, HKEX

• Expected Pricing: 10 June 2025

• Expected Listing: 17 June 2025

• Registered Capital: RMB450 million (converted into joint stock company in June 2023).

• Business Model: Vertically integrated pharmaceutical company – R&D, manufacturing, and sales with a focus on anti-infective, chronic disease, and oncology drugs.

Business Overview

• Founded: 2003, Guangdong, China.

• Specialization:

  • Leading producer of oseltamivir phosphate (Kewei) with ~39% market share in China’s anti-influenza segment (2024).

  • Extensive pipeline: 150 approved drugs (48 marketed in China, 23 overseas) and 100+ R&D candidates, including 49 Class I innovative drugs.

• R&D Strength:

  • Over 1,100 researchers, 3 Class I innovative drugs launched.

  • Partnerships with research institutes to co-develop products and share risk.

• Manufacturing Footprint: Global GMP-certified facilities; 610 distributors across China.

Financial Highlights (FY 2022–2024)

• Cash & Equivalents (Dec 31, 2024): RMB1.48 billion.

• Profitability remains volatile due to R&D and product cycle effects.

Key Investment Positives

• Market Leadership: Largest oseltamivir player in China’s anti-influenza space.

• Innovation-Driven Growth: 49 innovative drugs in pipeline, diversifying revenue away from influenza products.

• Infrastructure Advantage: GMP-certified facilities and extensive distribution network.

• Turnaround Momentum: Returned to profitability in 2023 with strong revenue growth.

Risks

• Profit Volatility: FY2024 profit margin thin; heavy R&D could lead to losses.

• Product Concentration: Reliance on influenza segment (Kewei), facing competition as patents expire.

• Regulatory & Market Risks: Drug approval delays, price pressures, and competition from larger Chinese and multinational pharma companies.

Verdict

Sunshine Lake Pharma presents a speculative growth opportunity for investors seeking exposure to China’s innovative pharma sector.

• For growth-focused investors: upside potential lies in its R&D pipeline and market leadership.

• For conservative investors: near-term earnings volatility and reliance on a few key products pose risks.

• Performance will hinge on new drug approvals and market expansion beyond influenza.

  🌟 Sunshine Lake Pharma Co., Ltd. (06887.HK) – IPO Investor Fact Sheet

  Peer Comparison Table – Relative Valuation Metrics

  Company	Ticker	Trailing P/E	Dividend Yield	Comment
  Sunshine Lake Pharma (IPO)	N/A	N/A	N/A	Profit profile emerging; valuation TBD
  Shanghai Pharmaceuticals Holding Co.	2607 / 601607.CN	~16.2× (CN) / ~9.6× (OTC/Korea ADR)	~2.0%	Large scale, slower growth; P/E below peers Investing.com India+12Simply Wall St+12Stockopedia+12Simply Wall St+3Yahoo Finance+3Wall Street Journal+3
  Huadong Medicine Co. Ltd.	000963.SZ	~20–21× (TTM)	~2.1–2.2%	Mid‑sized innovator; P/E modestly above peer avg (~16.5×) Investing.com NigeriaEulerpool Research SystemsSimply Wall St
  Sinopharm Group Co. Ltd. (ADR)	1099.HK / SHTDY	~7.5× (HK) / ~7.7× (ADR)	Briefly ~3–4% yield	State-owned, mature business; low P/E reflects low growth expectations Investing.com IndiaYahoo Financewebull.ca

  Insights:

  • Sunshine Lake Pharma will likely price at a material premium over Sinopharm due to innovation pipeline, but aim for a rating comparable to or slightly higher than Huadong Medicine (~20×).

  • Compared to Shanghai Pharma, Sunshine Lake’s growth focus and pipeline may justify a valuation closer to mid‑teens P/E or above.

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  Valuation Range Estimate: IPO Price Scenarios

  Assuming Sunshine Lake Pharma begins to deliver stable earnings post-IPO:

  Scenario	Estimated FY26 Earnings (RMB mn)	Implied P/E	Implied Market Cap (RMB mn)	IPO Stock Price Range
  Conservative	1,500	~15×	~22,500	~HKD 6.0–6.5 (+10–20%)
  Base / Moderate Growth	2,000	~20×	~40,000	~HKD 7.5–8.5 (+30–50%)
  Bullish / Pipeline Breakthrough	2,500	~25×	~62,500	~HKD 9.5–11 (>70%)

  • Assumes post-RMB1 b net profit run rate by FY26 as more new drugs commercialize.

  • P/E multiples reflect growth-adjusted valuations vs peers.

  • Dividend yield is secondary as profits are likely re-invested; yield may improve later.

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  ✅ Investment Highlights

  • High inherent valuation potential, trading at mid-teens to low-20s P/E, depending on pipeline delivery.

  • Strong growth narrative: expanding from antiviral-focused portfolio into oncology and chronic disease segments.

  • Substantial R&D pipeline: 49 Class I innovative candidates diversify revenue beyond influenza products.

  ⚠️ Key Risks & Valuation Threats

  • Profit volatility: Earnings are sensitive to R&D cycles—FY2024 profits were encumbered by high pipeline spend.

  • Regulatory and market risks: Drug approvals, pricing pressure, and rising competition could delay value realization.

  • Dependence on key products: Declines in influenza drug demand or pricing may impact topline until new drugs ramp up.

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  🔍 Summary – Valuation Outlook

  • Based on peer valuation and projected earnings, Sunshine Lake could reasonably IPO-valued between HKD 6 to HKD 11, depending on growth assumptions.

  • Investors buying closer to the lower end of this range may benefit from upside potential if clinical/pipeline milestones are met.

  • Conservative investors should be mindful that near-term earnings may remain volatile and dividend upside limited initially.

  Thank you