Goldman Sachs has issued a research report indicating that SBP GROUP (01177) plans to acquire an additional 5% stake in its subsidiary Chia Tai Tianqing for RMB 4.48 billion in cash, based on a valuation of approximately 19 times the past 12-month price-to-earnings ratio. Upon completion, the effective ownership will rise from 60% to 65%.
The investment bank has kept its 2026 earnings forecast largely unchanged while raising its 2027 and 2028 earnings estimates by 9.1% each. Goldman Sachs maintains a "Buy" rating and has increased the target price from HK$8.65 to HK$9.07.
Management stated that the transaction is strategically attractive, as it enhances exposure to the group's core earnings and innovation engine at a discount compared to the roughly 26 times price-to-earnings multiple of Hong Kong-listed peers. Based on Chia Tai Tianqing's adjusted net profit over the past 12 months, management expects the acquired stake to contribute an additional approximately RMB 350 million in attributable earnings, representing about 7.4% of the group's adjusted profit for the trailing 12-month period ending June 2026.
Goldman Sachs noted that the upward revisions to 2027 and 2028 earnings forecasts primarily reflect the reduced minority interest in Chia Tai Tianqing, as well as the increased probability of business development contributions from wholly-owned subsidiaries LaNova and Hygieia.
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