China Renaissance Securities Maintains 'Recommended' Rating on Hansoh Pharmaceutical (03692.HK) with Target Price of HK$25.44

According to the Zhitong Finance APP, Huachuang Securities released a research report stating that it maintains the "Recommended" rating for Hansoh Pharma (03692). Based on adjustments to the profit forecast according to the indications of each product and market launch expectations, the company's revenue for 2024-2026 is expected to be 12.155 billion, 12.439 billion, and 14.470 billion yuan respectively; net profit attributable to shareholders will be 4.259 billion, 3.945 billion, and 4.669 billion yuan. The target price is set at HK$25.44. The company has essentially completed its transformation into an innovation-driven enterprise, with innovative drug revenue reaching a new high. Its R&D pipeline includes several major products leading in progress within China, and the international potential of ADCs is becoming evident.

Matters:The company achieved total revenue of 6.506 billion yuan (+44.2%), net profit of 2.726 billion yuan (+111.5%), and EPS of 0.46 yuan (+111.4%). Revenue from innovative drugs and collaboration products reached 5.032 billion yuan (+80.6%), accounting for 77.4% of total revenue, up from 61.8% in the first half of 2023.

The main viewpoints of Huachuang Securities are as follows:

Revenue from innovative drugs increased significantly year-on-year, with multiple therapeutic areas showing strong growth.

In the first half of the year, the sales revenue of the company's innovative drugs and cooperative products reached RMB 5.032 billion (+80.6%), accounting for 77.4% of total revenue, up from 61.8% in H1 2023, setting a new record high. In the first half of 2024, the oncology sector generated revenue of RMB 4.475 billion (+75.15%), accounting for 68.8% of total revenue (+12.2pp); the central nervous system sector achieved revenue of RMB 733 million (+4.57%), representing 11.3% of total revenue (-4.2pp); the anti-infective sector achieved revenue of RMB 701 million (+16.64%), accounting for 10.8% of total revenue (-2.5pp); the metabolism and other sectors generated revenue of RMB 597 million (-8.72%), representing 9.1% of total revenue (-5.5pp).

R&D and regulatory submissions are proceeding smoothly, with several major products in the pipeline at the forefront of progress in China.

Selinexor Third-Line Treatment for DLBCL Approved; NDAs for the Third and Fourth Indications of Aumolertinib Accepted by NMPA, for Adjuvant Post-Surgery EGFRmt NSCLC and Unresectable Locally Advanced EGFRmt NSCLC without Progression after Platinum-based Radical Chemoradiotherapy, Respectively. HS-20094 (GLP-1R/GIPR) Phase IIa Diabetes Data Published, Showing Good Safety and Tolerability. Inebilizumab (CD19) IgG4-RD Phase III Study Met Primary Endpoint; gMG Global Multicenter Clinical Trial Including China is Ongoing.

The ADC product pipeline has international potential.

HS-20093 (B7H3 ADC) Receives FDA Breakthrough Therapy Designation; This ADC is Being Evaluated for the Treatment of ES-SCLC Patients Who Progress During or After Platinum-Based Chemotherapy. Additionally, GSK Has Completed Phase I Clinical Registrations Overseas for Two ADCs: HS-20093 and HS-20089 (B7H4 ADC). The Novel Solid Tumor ADC HS-20124 Has Been Approved for Clinical Trials. Furthermore, Hansoh Pharma and Pumis Have Expanded Their Collaboration on the EGFR/c-Met Bispecific Antibody HS-20017, Granting Hansoh an Exclusive License to Develop, Manufacture, and Commercialize HS-20117 as a Bispecific ADC Globally, with the Right to Further Sub-License.

Risk Warning:Clinical progress falls short of expectations, commercial performance falls short of expectations, and competitive landscape changes.