China Merchants Securities Raises Hansoh Pharmaceutical (03692.HK) Target Price to HK$26.5 Amid Record-High H1 Performance

According to ZhiTong Finance APP, China Merchants Securities released a research report stating that they are optimistic about the strong growth of Hansoh Pharma's (03692) core products, including Almonertinib (Ameile), and the R&D prospects of its proprietary pipeline. Meanwhile, the group is also expanding its pipeline through efficient business development (BD) collaborations. Therefore, the brokerage raised its target price from HK$25.2 to HK$26.5. The good predictability of corporate profitability and the continuous realization of pipeline R&D will be important catalysts for future valuation reassessment.

Hansoh Pharma's healthy product mix and some innovative products drove rapid sales growth, achieving the best performance since its listing in the first half of the year. Mid-term oncology business revenue reached 4.5 billion RMB. Product revenue was 3.1 billion RMB, increasing over 20% year-on-year. The metabolism and gastrointestinal business declined in the first half of the year. The company believes that its older GLP-1 product, Fulai Mei, faced pressure due to competition from semaglutide and tirzepatide. However, the overall product revenue maintained a much higher growth rate than the industry and peers, also surpassing previous guidance.

The bank noted that the operating profit margin of the group's core products remained at 29%, mainly benefiting from the company's continuously increasing proportion of innovative drugs, a healthy product mix, and精细化运营 in production and management expenses. In terms of platform development, the group announced its collaboration with Silence Therapeutics, with expectations that the company will have small nucleic acid drugs entering clinical development in the future.