CSL had earlier flagged that transitioning to its own distribution channel in China would have a one-off impact on FY20 financials. On Friday the company quantified this impact in the form of a decline in albumin sales by -US$340-US$370m.
Citi analysts estimate the impact on net profits will be around -6% with the impact on cash flows to be much lower, also because CSL will continue to collect outstanding receivables from existing distributors despite the accountancy change/delay. Buy. Target unchanged at $236.60.
Sector: Pharmaceuticals, Biotechnology & Life Sciences.
Target price is $236.60.Current Price is $212.12. Difference: $24.48 – (brackets indicate current price is over target). If CSL meets the Citi target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).