Guangzhou Pharma Started At Outperform - BS

Guangzhou Pharma Started At Outperform - BS

STOCK CALL: Guangzhou Pharmaceutical (0874.HK) started at Outperform by Bear Stearns, targeting HK$10.00; notes it's among

China's largest makers of traditional Chinese medicines, general western medicines;

"Pending government approval of the formation of a 50%-owned JV company with Alliance Boots and Beijing Med-Pharm, GPC will have greater access to global medicines and the ability to accelerate the rollout of a national retail drug network." Says shares trading at 2008E P/E of 13.6X, expects 28.0% 2-year forward EPS CAGR; DCF-based target price implies 2008E P/E of 20.0X vs peer group average of 14.0X. Shares last at HK$6.83.