Key Takeaways
Shares of Hangzhou Tigermed Consulting Co. (03347.HK) fell as much as 3.19 percent to a near one-year low after JPMorgan lowered its price target on the clinical research firm, citing a regulatory probe and a disappointing profit recovery.
"The probe will have limited impact on the company's daily operations and is likely to conclude within one month," JPMorgan analysts said in a research report, while noting first-quarter profit performance was disappointing. Nomura also noted in a recent report that the investigation could create short-term share price pressure.
JPMorgan cut its target for Tigermed's Hong Kong-listed shares to HKD39 from HKD41, a 4.9 percent reduction, while maintaining a Neutral rating. The stock closed at HKD33.42 in Hong Kong. The bank lowered its recurring net profit forecasts for the company for 2026 through 2028 by 12 to 14 percent. While Tigermed's first-quarter revenue was in line with expectations, its recurring net profit rose only 18 percent year-over-year to RMB120 million, missing JPMorgan's forecast for a rebound of more than 50 percent.
The downgrade highlights the dual pressures facing the company as it navigates both a regulatory investigation by the China Securities Regulatory Commission into a co-founder and fundamentals that have failed to impress analysts. The combination has soured investor sentiment, pushing the stock to its lowest level in almost a year.
The stock's decline tests a key support level for investors, with the next major catalyst being the resolution of the regulatory probe, which JPMorgan expects within a month. Continued weakness in profit recovery could lead to further downward revisions from analysts.
This article is for informational purposes only and does not constitute investment advice.
