BOCOM International Maintains 'Neutral' Rating on Hansoh Pharmaceutical (03692.HK), Raises Target Price to HK$20.4

According to the SmartTong app, Bocom International released a research report stating that it maintains a "neutral" rating for Hansoh Pharma (03692). Based on Hansoh Pharma's strong first-half performance, the company’s revenue forecast for 2024 to 2026 has been raised by 3% to 4%, while the net profit forecast increased by 12% to 17%. The target price has been raised to HKD 20.4.

The report stated that the company's interim performance exceeded expectations, with revenue growing 44% year-on-year and net profit increasing 1.11 times. Revenue from innovative drugs surged 81%, and their share of total revenue quickly rose from 61.8% in the first half of last year to 77.4%, mainly due to the upfront payment income (approximately RMB 1.3 billion) from the licensing of B7H3 ADC to GSK.

Excluding this one-time income, Hansoh Pharma's total revenue, innovative drug revenue, and net profit for the first half of the year increased by 15%, 33%, and 26% respectively, surpassing the expectations of both the bank and the market. The company has maintained its guidance for double-digit growth in non-self-developed and business development (BD) operating income for the full year. Based on revenue excluding BD, the gross margin improved by approximately 1 percentage point, while selling, general, and administrative expenses (SG&A) decreased by about 4.5 percentage points.