UBS Reiterates 'Buy' Rating on Hansoh Pharmaceutical (03692.HK), Raises Target Price to HK$20.8

According to the Zhishang Finance APP, UBS released a research report stating that the market underestimates the high-quality drug pipeline of Hansoh Pharma (03692). The target price has been raised from HK$17.8 to HK$20.8, reiterating a "Buy" rating and making it the top pick in the industry.

The bank stated that the company's main mid-to-late stage drug production line is projected to generate unadjusted peak sales of RMB 11.2 billion, with a blended Probability of Success (PoS) of 61.1%. Assuming all other factors remain constant, the current share price only reflects a blended success probability of 2.2%. Additionally, the bank believes that Hansoh Pharma has the potential to unlock overseas value from its pipeline through licensing deals, providing further upside to its base valuation.

In addition to adjusting revenue forecasts, the bank raised its estimates for the short-term sales and R&D expenditure ratio, while lowering its earnings per share forecasts for 2024, 2025, and 2026 by 9%, 7%, and 9%, respectively. The bank's quantitative indicators show that the stock has had strong upward momentum since May this year, indicating a narrowing of institutional investors' net short positions.