GF Securities Maintains "Buy" Rating on Hansoh Pharmaceutical with Target Price of HK$22.35

　　GF SecuritiesGF Securities Co., Ltd. released a research report, maintaining the "Buy" rating for Hansoh Pharma (03692). It is projected that the EPS for 2023-25 will be HKD 0.46, 0.52, and 0.6 per share respectively, with a fair value of HKD 22.35. The company's commercialized innovative drugs continue to unlock market potential, and its core R&D pipeline is progressively demonstrating globally competitive clinical treatment capabilities. With innovation and internationalization accelerating, the firm is optimistic about the company reaching new heights in its development.

The main points of the report are as follows:

Innovation-Driven Pharmaceutical Leader, Significant Transformation Achievements.

The company is a leading innovation-driven pharmaceutical company in China, deeply engaged inChina MedicineWith over 25 years in the market, the company boasts strong R&D and commercialization capabilities. Focusing on five key therapeutic areas—oncology, central nervous system, anti-infectives, metabolism, and autoimmune diseases—it has established multiple innovative R&D platforms, including ADC, bispecific antibodies, and siRNA. To date, seven new drugs have been approved for marketing, with more than 30 new drug projects currently in clinical research stages, demonstrating significant achievements in the company’s innovation transformation.

The revenue share of innovative drugs continues to increase, and the approval of new products/new indications will contribute to incremental growth.

In the first half of 2023, the company's innovative drug revenue was approximately RMB 2.79 billion, accounting for 61.8% (18.0% in 2020). Pemostim was approved in China in June 2023, and the marketing application for Ibrexafungerp was accepted by the NMPA in July 2023. Aumolertinib and Inebilizumab are expanding into multiple indications, and HS-10365 (RET), among others, is in the registrational clinical stage. In the next three years, as these new products/new indications are approved and contribute to incremental growth, the company's performance growth is expected to accelerate.

Multiple core pipelines enter the POC stage, marking a new level of innovation and internationalization.

This year, a batch of new drug pipelines with global competitiveness from Hansoh Pharma, including HS-20094 (GLP-1/GIP), HS-20093 (B7-H3 ADC), HS-20089 (B7-H4 ADC), and HS-10374 (TYK2), have entered the POC stage and are expected to carry out registration clinical trials successively in 2024-2025. Meanwhile, in October 2023, the company reached an out-licensing agreement with GSK, marking a new phase in the company's R&D innovation and internationalization.

Risk Warning: Risks of new drug R&D failure or slower-than-expected progress, risks of lower-than-expected sales growth after innovative drugs are launched, risks of external authorization termination, and risks of intensified market competition, etc.

Editor: Shi Lijun