CICC Maintains 'Outperform Market' Rating on Hansoh Pharmaceutical with Target Price Raised to HK$17.81

CICC released a research report, maintaining the "Outperform Industry" rating for Hansoh Pharma (03692). As the portion of the upfront payment from the collaboration will be recognized in 2024 and the bank expects the company to maintain good control over its three expenses, the 2024 revenue and net profit attributable to shareholders forecasts have been raised by 2.0%/11.0% to RMB 11.566 billion/3.43 billion. The first profit forecast for 2025 has been introduced at RMB 3.56 billion. Due to the company’s innovative drug pipeline entering the harvest period, the target price has been raised by 27.2% to HKD 17.81.

The report stated that in 2023, the company's innovative drug and collaboration product revenue reached 6.87 billion yuan, increasing to 67.9% (+14.5pct YoY), of which collaboration product revenue was 700 million yuan, mainly from the upfront payment for licensing B7H4 ADC to GSK. The company expects another approximately 1.3 billion yuan in upfront payments from licensing B7H3 ADC to GSK will be booked in 2024.

By segment: 1) Oncology business revenue in 2023 was RMB 6.17 billion (+11.7% YoY). Although Almonertinib (Ameile) faced pricing pressure after being included in the National Reimbursement Drug List in March 2023, its sales volume doubled. The company expects its sales revenue to grow by approximately 12% in 2023 and approach 20% year-on-year growth in 2024; 2) Anti-infective business revenue in 2023 was RMB 1.27 billion (+1.6% YoY), CNS business revenue in 2023 was RMB 1.37 billion (-8.5% YoY), and other businesses revenue in 2023 was RMB 1.30 billion (+16.3% YoY). In 2023, the company achieved multiple commercial collaborations, including out-licensing to GSK, introducing Selinexor from Antengene, and expanding the EGFRxcMET bispecific antibody collaboration with Premas Biotech in March 2024.

Editor: Shi Lijun