$合生元(01112)$   花旗的观点，仅供参考，应该是目前大行里唯一看好的。
Biostime International Holdings (1112.HK)Earnings Upgrade on Substantial Results Beat Reiterate Buy/High Risk — We reaffirm our bullish view on Biostime following itsstrong 2015 results. Core earnings, excluding forex gain, beat our estimate by 56%on stronger than expected Swisse results and a better margin in the original babyproduct business. We raise 2016E/17E earnings 14%/10% and our target price toHK$34.10 from HK$  28.00. The stock now trades at 16x 2016E P/E. Results beat substantially — Revenue (up 2%) was 3% above our estimate dueto higher revenue from Swisse. Gross margin stabilized at 61.9%, 2.8ppt above ourestimate due to a better gross margin in the baby product business. Excluding forexloss, core EBIT margin decreased 10.0ppt to 15.5% but 4.3ppt above our estimatedue to a higher gross margin and lower than expected SG&A. Core net profit decreased 58% to RMB340m, 56% above our estimate due to higher EBIT margin. Strong Swisse results — Swisse contributed RMB850m revenue in 4Q15, 16%higher than expected. Profit after tax of RMB242m with post-tax profit margin of28.5% (excluding M&A related expenses) came in 22% and 1.6ppt above estimates,due to stronger than expected operating efficiency. Better margin outlook — Gross margin of the baby product business recoveredfrom 58.2% in 1H15 to 62.1% in 2015 (up 0.2ppt yoy), due to the end of pricepromotions in 2H15. Management is now refocused on brand building and customerrelationship to strengthen competitiveness. We thus expect gross margin to remainrelatively stable. We expect an EBIT margin rebound in 2016E from a low base. Earnings and TP upgrades — We raise our 2016E/17E net profits by 14%/10% tomainly reflect higher EBIT margin assumptions for both Swisse and the babyproduct business. We also raise our SOTP target price from HK$28.00 toHK$  34.10, implying 2016E P/E of 20x (from 19x).