A strong Buy-rating on the inflection point

We raise our Dec-25 ex-div TP to HUF 14,050. This implies an upside potential of 41%
including a gross DPS of HUF 533.
 Richter is on our conviction list as the stock, we think, offers the best R/R among the
regional blue chips we cover. The de-escalation of the RU-UKR war or peace talks
between the two assisted by the US and the EU should work as a tailwind while
concerns over lower Vraylar sales is priced in, in our view. The higher TP reflects a
decrease in our fair value estimate for the CNS, but higher FV estimate for the WHC,
BIO and GM segments. More importantly, compared to our previous analysis, we have
reviewed and made some modifications to the valuation methodology. In addition to
the net cash position, a significant amount of liquid, marketable assets have been
accumulated on Richter’s balance sheet. We valued them based on the reported
positions at the end of Q3 and we also included Richter’s investments (e.g. the stake
in Formycon, listed on Xetra) into the equity value. Shares in Richter should recover
from the current levels.