CICC Maintains Hansoh Pharmaceutical (03692.HK) 'Outperform' Rating, Raises Target Price to HK$23.30

According to the Zhisheng Finance APP, CICC released a research report stating that it maintains the "Outperform Industry" rating for Hansoh Pharma (03692). Based on the SOTP valuation method and considering the upward revision of the profit forecast as well as the stable growth rate of the company’s product sales revenue, the target price has been raised by 10.3% to HKD 23.30, corresponding to 31.5x/29.5x P/E for 2025/2026 (with a 15.9% upside). Due to the high growth of Almonertinib, the profit forecast for 2025 was raised by 5.1% to RMB 4.405 billion, and the profit forecast for 2026 is introduced at RMB 4.683 billion.

CICC's main viewpoints are as follows:

2024 Performance Slightly Exceeds Bank's Expectations

Hansoh Pharma Announces 2024 Results: Revenue of RMB 12.261 billion, up 21.3% YoY; Net Profit Attributable to Shareholders of RMB 4.372 billion, up 33.4% YoY, surpassing the bank's expectations due to upfront payments from product out-licensing and rapid sales growth of Almonertinib.

The Proportion of Innovative Drug Revenue Continues to Increase

In 2024, Hansoh Pharma's revenue from innovative drugs and collaboration products reached RMB 9.477 billion, representing a year-over-year (YoY) increase of 38.1%, with the proportion rising to 77.3% (+9.4pct YoY). Among this, revenue from collaboration products amounted to RMB 1.573 billion, primarily due to the upfront payment from licensing B7H3 ADC to GSK. Excluding this upfront payment, the company's sales revenue was RMB 10.788 billion, marking a YoY growth of 13.7%. Revenue from innovative drugs was approximately RMB 7.9 billion, up 28% YoY. By segment: Oncology business revenue reached RMB 8.122 billion (+31.7% YoY), mainly driven by the high growth of Almonertinib and GSK BD revenue recognition, with an estimated revenue growth of about 28% for Almonertinib; Anti-infective business revenue was RMB 1.464 billion (+15.4% YoY), primarily due to the strong growth of Henmu; Central nervous system business revenue was RMB 1.379 billion (+0.9% YoY); Metabolic disease business revenue was RMB 1.296 billion (YoY -0.2%). In terms of expenses: Gross margin stood at 91.0% (+1.2pct YoY), sales expenses in 2024 were RMB 3.796 billion (+7.5% YoY), administrative expenses were RMB 713 million (+0.4% YoY), and R&D expenses were RMB 2.702 billion (+28.8% YoY).

Rapid Progress in R&D Pipeline

Hansoh Pharma's core product, Amelo, used for maintenance therapy in patients with Stage III unresectable NSCLC following concurrent chemoradiotherapy, was approved for marketing in March 2025. The product has two additional indications (adjuvant treatment of NSCLC and first-line combination chemotherapy for NSCLC) still in the NDA phase, with expectations that they will be approved for marketing in 1H25 and 2H25 respectively. It is recommended to monitor the progress of indication expansion and National Reimbursement Drug List negotiations. HS-20093 (B7H3 ADC) initiated a Phase III clinical trial for second-line monotherapy in SCLC in China in 2H24. The company’s partner, GSK, is expected to release more data on the SCLC indication at this year’s ASCO and plans to initiate pivotal clinical studies before the end of 2025. HS-20094 (GLP-1/GIP dual agonist) started a Phase III clinical trial in 2H24 for the treatment of obesity or overweight. HS-10374 (TYK2 inhibitor) began a Phase III clinical trial in 2H24 for the treatment of psoriasis. In terms of early-stage projects, the company has received clinical approval for eight key innovative drugs, including representative products such as fourth-generation EGFR-TKI, oral GLP-1 small molecules, CDH6 ADC, and CDH17 ADC. Regarding external collaborations, the company will continue to accelerate the advancement of licensed-in projects and overseas licensing of its proprietary pipeline.

Risk Warning:Product commercialization falls short of expectations; increased competitive landscape; clinical data underperforms.