Tianjin Zhongxin Pharma

Tianjin Zhongxin Pharma: CIMB deems 9M14 net profit (74% of FY14 forecast) as slightly below , as 4Q tends to be seasonally weaker. Still revenue growth was strong at +25.4% y/y. Gross profit grew by a decent but slower 16.5%, mainly due to higher revenue contribution from the group's commercial enterprises (lower margin drug distribution business). Core net profit grew by 23.1% y/y to Rmb54.5m , helped by the strong profit of Rmb23m from its associated companies, mainly Sino-American Tianjin Smithkline & French Lab. CIMB sees Tianjin Zhongxin as a prime beneficiary of the authority's revised policy to ease the previous price ceiling applied on certain essential drugs. According to the NDRC, the retail prices of low priced essential drugs (daily cost of