Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has successfully transformed through innovation, achieving significant revenue and profit growth. In the first half of 2024, the company reported revenue of 6.506 billion RMB, a year-on-year increase of 44.2%, and a net profit of 2.726 billion RMB, up 111.5% [4] - The company has established a leading position in major unmet medical needs, particularly in the oncology sector, with product revenue reaching approximately 4.475 billion RMB, accounting for 68.8% of total revenue [4][5] - The company is actively pursuing international expansion and has enriched its pipeline through business development (BD) collaborations, including a significant agreement with GSK [6][7] Summary by Sections Market Performance - The company's stock has shown a relative increase of 18.38% over one month and 30.97% over three months compared to the market [2] Financial Performance - For the first half of 2024, the company achieved a revenue of 6.506 billion RMB, with a gross margin of 89.80% and a net profit margin of 32.44% [4][15] - The projected revenue for 2024-2026 is 12.25 billion, 12.64 billion, and 14.885 billion RMB, with year-on-year growth rates of 21.24%, 3.21%, and 17.73% respectively [7][15] Product Development - The company has over 50 ongoing clinical trials for more than 30 innovative drug products, with several products already included in the national medical insurance directory [4] - The company’s innovative drugs, particularly in the oncology and metabolic disease sectors, are showing promising results in clinical trials [5][6] Business Development - As of June 30, 2024, the company has introduced 11 collaborative projects, with 9 in clinical stages and 2 in commercialization [6] - The company has signed multiple BD agreements, including a notable one with GSK that includes an upfront payment of 185 million USD [6][7]

Investment Rating - The report upgrades the investment rating for the company from "Hold" to "Buy" [3][4]. Core Views - The company reported a strong performance in the first half of 2024, with revenue exceeding expectations, driven primarily by the oncology drug segment, which saw a revenue increase of 75.1% year-on-year [2]. - The forecast for revenue and net profit for 2024-2026 has been adjusted upwards due to the strong performance in the oncology segment, with expected revenue growth from 61.6 billion RMB in 2023 to 90.8 billion RMB in 2026, representing a CAGR of 13.8% [2][3]. Summary by Sections Financial Performance - The company's revenue for the first half of 2024 increased by 44.2% to approximately 6.506 billion RMB, with the core pharmaceutical sales rising by 13.8% to 5.1 billion RMB after excluding project prepayments [2]. - The net profit attributable to shareholders surged by 111.5% to 2.73 billion RMB, driven by a 3.0 percentage point increase in gross margin and a 3.5 percentage point decrease in the sales expense ratio [2]. Earnings Forecast - The revenue forecast for 2024 has been raised by 2.2%, while the forecasts for 2025 and 2026 have been slightly lowered by 4.1% and 0.1%, respectively [2]. - The net profit forecasts for 2024, 2025, and 2026 have been increased by 5.5%, 0.1%, and 4.6%, respectively, reflecting the strong growth in the oncology drug segment [2]. Target Price - The target price has been raised to 23.40 HKD, reflecting the upward adjustments in profit forecasts [3][5].

Investment Rating - The report assigns a Neutral rating to the company with a target price of HKD 20.40, indicating a potential upside of 12% from the current price of HKD 18.22 [1][6]. Core Insights - The company's 1H24 revenue and profit exceeded market expectations, leading to an upward revision of the 2024-26 profit forecasts by 12-17% [1]. - The strong performance was driven by a 44% year-on-year revenue growth and a 111% increase in net profit, primarily due to the sales growth of the innovative drug Ameluz [1][2]. - The report highlights that the innovative drug revenue grew by 81%, increasing its share of total revenue from 61.8% in 1H23 to 77.4% in 1H24 [1]. - The company maintains guidance for double-digit growth in non-BD operating revenue for the full year [1]. Financial Forecast Changes - Revenue forecasts for 2024, 2025, and 2026 have been adjusted to RMB 12,637 million, RMB 13,265 million, and RMB 14,630 million respectively, reflecting increases of 2.7%, 2.7%, and 4.3% compared to previous estimates [3]. - Net profit forecasts for the same years have been revised to RMB 4,451 million, RMB 4,040 million, and RMB 4,690 million, showing increases of 11.5%, 15.6%, and 16.7% respectively [3]. - The gross profit margin is expected to remain stable at around 90.5% for 2024, with slight variations in subsequent years [3]. Sales Performance - The oncology line revenue (excluding BD) grew by 24%, with the core product Ameluz expected to achieve over 20% sales growth for the year [2]. - The anti-infection and neurology lines saw revenue increases of 17% and 5% respectively, while the generic drug segment faced a decline of approximately 15% due to competitive pressures [2]. - The company anticipates the launch of several new products in the coming years, including Chitosan and additional indications for Ameluz and other innovative drugs [2].

Investment Rating - The report assigns a "BUY" rating to the company, indicating a potential return exceeding 15% over the next 12 months [15]. Core Insights - The company reported strong growth in innovative drug sales, with a revenue of 6.51 billion RMB in the first half of the fiscal year 2024, including a 185 million USD upfront payment from GSK related to the licensing of HS-20093 [1]. - The innovative drug sales accounted for 77% of total revenue, with a year-on-year growth of 31.6% when excluding collaboration revenue [1]. - The company plans to distribute approximately 40% of its net profit of 2.73 billion RMB as dividends [1]. - The target price for the company's stock has been raised to HK$24.11 from HK$22.06, reflecting a 17% upside from the current price of HK$20.60 [1]. Financial Performance - For FY24E, the company expects total revenue to grow by 21% to 12.23 billion RMB, with organic revenue growth projected at 14.3% and 14.1% for FY24E and FY25E, respectively [3][4]. - The net profit is expected to increase by 33.3% to 4.37 billion RMB in FY24E, followed by a decrease of 25.1% in FY25E [4][12]. - The company has improved cost efficiency, with sales expense ratio decreasing to 33.7% from 37.5% in FY23 [1]. Product Pipeline and Growth Drivers - The company is expanding the indications for aumolertinib, with new drug applications accepted for postoperative adjuvant therapy and maintenance treatment for locally advanced unresectable non-small cell lung cancer [1]. - Aumolertinib's sales are expected to grow by 22% by the end of FY24, reaching 438 million RMB, with a target of 600 million RMB by 2026 [1]. - The company is also advancing its ADC pipeline, with HS-20093 showing promising early signals in clinical trials for small cell lung cancer [3]. Market Position and Competitive Landscape - As an early entrant in the third-generation EGFR-TKI market in China, the company is well-positioned to capture market share with its innovative products [1]. - The company is expected to submit another NDA for aumolertinib in combination with chemotherapy in Q4 2024, differentiating itself from domestic competitors [1]. Valuation Metrics - The report provides a DCF valuation with a target price of HK$24.11, based on a weighted average cost of capital of 8.52% and a terminal growth rate of 3.5% [5][7]. - The company's P/E ratio is projected to be 25.6x for FY24E, reflecting a strong growth outlook [12].

Investment Rating - The report maintains a "BUY" rating for Hansoh Pharma, with a target price of HK$24.11, reflecting a 17.0% upside from the current price of HK$20.60 [2][3]. Core Insights - Hansoh Pharma demonstrated strong sales growth in innovative drugs, reporting RMB6.51 billion in revenue for 1H24, with RMB5.10 billion from product sales, marking a 13.8% year-over-year increase [2]. - The company continues to expand its innovative drug pipeline, particularly with aumolertinib, which is expected to drive significant revenue growth [2]. - Cost efficiency has improved, as indicated by a decrease in selling and administrative expense ratios [2]. Revenue and Profitability - For FY24E, total revenue is expected to increase by 21% year-over-year to RMB12.23 billion, with organic revenue growth projected at 14.3% [2][3]. - Net profit is anticipated to rise by 33.3% to RMB4.37 billion in FY24E, before decreasing by 25.1% in FY25E [2][3]. - The gross profit margin is projected to remain strong at 90.16% for FY24E [9]. Product Sales and Pipeline - Innovative drugs accounted for 77% of total revenue in 1H24, with a 31.6% year-over-year growth in sales from these products [2]. - Aumolertinib is set to expand its indications, with expected approvals by mid-2025, potentially becoming the first domestic EGFR-TKI for new indications [2]. - The company is also advancing other innovative drugs, including HS-20093 and HS-20089, with ongoing clinical trials [2]. Financial Metrics - The report outlines a significant increase in R&D expenses, which rose by 29% year-over-year to RMB1.20 billion, representing 23.4% of product sales [2]. - The earnings summary indicates a projected EPS of RMB0.74 for FY24E, with a P/E ratio of 25.6 [3][8]. - The company's market capitalization is reported at HK$122.27 billion, with an average turnover of HK$66.3 million over the past three months [4].

Investment Rating - Buy (Maintained) [2] Core Views - The company's 2024 interim results exceeded expectations, driven by significant growth in innovative drug revenue and successful transformation into an innovation-driven growth cycle [2] - The company's revenue and profit surged due to the recognition of a USD 185 million upfront payment from GSK in the first half of the year [2] - Innovative drug revenue grew rapidly, accounting for 77.4% of total revenue in H1 2024, with a year-on-year increase of 80.6% [2] - The company's R&D pipeline is robust, with global strategic布局 and accelerated international BD collaborations, providing long-term support for innovation transformation [2] Financial Performance - H1 2024 total revenue reached RMB 6.506 billion, a year-on-year increase of 44.2%, with net profit of RMB 2.726 billion, up 111.5% year-on-year [2] - Operating income, excluding milestone payments, was RMB 5.103 billion, up 13.83% year-on-year [2] - Revenue breakdown: Oncology (68.8%), CNS (11.3%), Anti-infectives (10.8%), Metabolism & Others (9.1%) [2] R&D and Innovation - Seven approved innovative drugs and nine indications have been included in the national医保目录 [2] - Core product Ameile (阿美替尼) has seen its third and fourth indications for NSCLC NDA accepted in July and August 2024, respectively [2] - The company's R&D pipeline includes领先 global progress in dual-target GLP-1, B7-H4 ADC, and B7-H3 ADC, with total授权金额 exceeding USD 1.7 billion [2] Profit Forecast and Valuation - Forecasted total revenue for 2024-2026: RMB 11.874 billion, RMB 12.714 billion, and RMB 14.827 billion, respectively [2][3] - Forecasted net profit for 2024-2026: RMB 3.524 billion, RMB 3.704 billion, and RMB 4.103 billion, respectively [2][3] - ROE for 2024-2026 is projected at 12.1%, 11.3%, and 11.2%, respectively [3] Stock Data - Closing price on August 28, 2024: HKD 20.60 [4] - Year-to-date high/low: HKD 20.75/HKD 9.43 [4] - Total market capitalization: HKD 122.274 billion [4]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [3]. Core Insights - The company reported strong mid-year results for 1H24, with revenue, net profit attributable to shareholders, and adjusted net profit reaching 6.506 billion, 2.726 billion, and 2.684 billion RMB respectively, representing year-on-year growth of 44.17%, 111.47%, and 118.39% [1]. - Innovative drug sales accounted for nearly 80% of total revenue, with significant contributions from the ADC (antibody-drug conjugate) segment, leading to a doubling of net profit [1]. - The company has made substantial progress in expanding its product pipeline, particularly with its core product Amelot, which is the first domestic third-generation EGFR-TKI [2]. Summary by Sections Performance Review - In 1H24, the company achieved a revenue of 6.506 billion RMB, a 44.2% increase year-on-year, with innovative drugs and collaborative product sales reaching 5.032 billion RMB, up 80.6% [1]. - The ADC breakthrough includes collaborations with GSK, resulting in upfront payments of 85 million and 185 million USD for two products [1]. - Seven innovative drugs and nine indications have been included in the national medical insurance catalog [1]. Product Development - The core product Amelot has received approval for new indications, enhancing its market potential [2]. - The company is focusing on core areas such as oncology, metabolism, and autoimmune diseases, with a rich pipeline of products [2]. - The self-developed GLP-1/GIP dual agonist has shown promising safety and efficacy data presented at the 2024 ADA annual meeting [2]. Financial Forecast and Valuation - The revenue forecast for 2024 and 2025 has been adjusted downwards by 2.61% and 13.03% to 11.6 billion and 11.9 billion RMB respectively, while the net profit forecast for 2024 has been increased by 22% to 4 billion RMB [3]. - The expected revenue for 2026 is projected to be 13.7 billion RMB, with net profit anticipated at 3.9 billion RMB [3]. - Key financial metrics include a projected P/E ratio of 26.99 for 2024 and a P/B ratio of 3.64 [5].

Financial Performance - The company reported revenue of approximately RMB 6.506 billion for the six months ended June 30, 2024, representing a year-on-year growth of approximately 44.2%[2]. - The company's profit was approximately RMB 2.726 billion, reflecting a year-on-year increase of approximately 111.5%[2]. - Basic earnings per share were approximately RMB 0.046, up approximately 111.4% compared to the same period last year[2]. - Gross profit for the same period was RMB 5,926,283 thousand, reflecting a gross margin improvement from 88.0% in 2023 to 91.1% in 2024[35]. - The company achieved a profit before tax of RMB 3,118,186 thousand, up 108.5% from RMB 1,499,883 thousand in the previous year[35]. - Net profit for the period was RMB 2,725,525 thousand, representing a year-on-year increase of 111.0% compared to RMB 1,288,848 thousand[36]. - The total comprehensive income for the period was RMB 2,810,182 thousand, compared to RMB 1,752,778 thousand in the same period of the previous year[36]. - For the six months ended June 30, 2024, the total income tax expense was RMB 392,661,000, compared to RMB 211,035,000 for the same period in 2023, representing an increase of approximately 86%[48]. Revenue Breakdown - Revenue from innovative drugs and collaborative products reached approximately RMB 5.032 billion, an increase of approximately 80.6% year-on-year, accounting for about 77.4% of total revenue[2]. - The company’s revenue from the oncology segment reached approximately RMB 4.475 billion, accounting for about 68.8% of total revenue[7]. - Revenue from central nervous system diseases reached approximately RMB 733 million, accounting for about 11.3% of total revenue[9]. - Revenue from metabolic and other diseases reached approximately RMB 597 million, accounting for about 9.1% of total revenue[10]. - Revenue from product sales amounted to RMB 5,103,080 thousand, up from RMB 4,483,227 thousand, indicating a year-over-year increase of about 13.8%[43]. - Collaborative income surged to RMB 1,402,421 thousand, compared to RMB 27,990 thousand in the previous year, reflecting a dramatic increase of over 4900%[43]. Research and Development - Research and development expenses amounted to approximately RMB 1.196 billion, a year-on-year increase of approximately 28.7%, representing about 18.4% of total revenue[2]. - The company has received approval for seven innovative drugs, all included in the National Medical Insurance Catalogue in China[3]. - The company has over 50 ongoing clinical trials for innovative drugs, covering more than 30 products as of June 30, 2024[22]. - HS-20094, a dual agonist for GLP-1 and GIP receptors, showed good safety and efficacy in reducing blood sugar and weight in type 2 diabetes patients during the 2024 ADA annual meeting[23]. - HS-20093, a B7-H3 targeted ADC, demonstrated strong anti-tumor activity in patients with recurrent or refractory bone and soft tissue sarcoma, surpassing existing standard treatments[24]. - The company has established a comprehensive R&D platform with over 1,700 researchers across four centers in the U.S. and China[21]. Innovative Drug Approvals - In January 2024, the company obtained clinical trial approval for the innovative drug HS-10501, intended for treating type 2 diabetes and adult obesity[3]. - In April 2024, the company entered into a licensing agreement with Jiangsu Quanxin Biopharmaceutical Co., Ltd. for the development and commercialization of HS-20137 monoclonal antibody in China[4]. - The innovative drug Amelot® has been approved for two indications and has been included in the national medical insurance catalog as of January 2023[13]. - The innovative drug Haosenxinfu® is recommended as a first-line treatment for chronic myeloid leukemia in national treatment guidelines[15]. - The innovative drug Fulaimi® is the first domestically developed GLP-1RA weekly formulation, approved for type 2 diabetes treatment[16]. - The innovative drug Hengmu® is the first oral antiviral drug for hepatitis B in China, included in the national medical insurance catalog as of December 2023[17]. - Multiple clinical studies for Hengmu® have demonstrated its long-term efficacy and safety in chronic hepatitis B patients[17]. - Amelot® has multiple ongoing Phase III clinical trials for various indications, including postoperative adjuvant therapy[14]. - The company continues to advance regulatory procedures for Amelot®'s marketing authorization applications in the UK and EU[14]. - The drug Xinyue® (Inalizumab injection) received approval in China in March 2022 and was included in the national medical insurance catalog in January 2023[18]. - Shengluo® (Pemosate injection) was approved for two indications in June 2023, targeting anemia caused by chronic kidney disease, and was included in the national medical insurance catalog in December 2023[19]. Financial Position - As of June 30, 2024, the company had cash and bank deposits totaling RMB 21.745 billion, a decrease from RMB 22.435 billion as of December 31, 2023[30]. - The company's asset-liability ratio was approximately 11.9% as of June 30, 2024, down from 21.9% as of December 31, 2023[30]. - The company has generated a net cash inflow of RMB 2.682 billion from operating activities for the six months ended June 30, 2024[29]. - Capital expenditures during the review period amounted to RMB 306 million, primarily for land use rights, workshop construction, and equipment purchases[29]. - The net asset value as of June 30, 2024, was RMB 27,903,275 thousand, an increase from RMB 25,794,773 thousand as of December 31, 2023, marking a growth of approximately 8.2%[38]. - Total liabilities amounted to RMB 2,410,159,000, an increase from RMB 2,375,680,000 as of December 31, 2023, reflecting a growth of approximately 1.5%[56]. Corporate Governance and Compliance - The company has complied with all provisions of the Corporate Governance Code except for the separation of the roles of Chairman and CEO, which are currently held by the same individual[57][58]. - The Audit Committee, consisting of three independent non-executive directors, has reviewed the unaudited interim results for the six months ended June 30, 2024, in conjunction with external auditors[60]. - The company has confirmed that all directors have complied with the company's code of conduct regarding securities transactions for the six months ended June 30, 2024[59]. - The company has not reported any significant changes or delays in the use of proceeds from fundraising activities as of June 30, 2024[65]. Shareholder Returns - The declared final dividend for 2023 is HKD 0.1422 per share, totaling approximately RMB 768,760,000, compared to RMB 268,852,000 for the final dividend of 2022, reflecting a significant increase[49]. - The interim dividend declared for the six months ended June 30, 2024, is HKD 0.201 per share, up from HKD 0.0707 per share for the same period in 2023, representing an increase of approximately 184.5%[62]. Fundraising and Utilization - The company successfully issued $600 million zero-coupon convertible bonds due in 2026, with net proceeds of approximately $595.65 million allocated for R&D, facility upgrades, and general corporate purposes[66]. - As of June 30, 2024, the company has utilized $591.65 million of the net proceeds, with 65% ($387.17 million) used for R&D expenses, including clinical trials and drug development[67]. - 25% ($148.91 million) of the proceeds were allocated for upgrading and expanding existing production facilities, including R&D facilities[67]. - 10% ($59.57 million) of the proceeds were designated for general corporate purposes, all of which have been fully utilized as of June 30, 2024[67].

Investment Rating - The report initiates a "Buy" rating for Hansoh Pharmaceutical with a target price of HKD 22.06, indicating a potential upside of 28% from the current price of HKD 17.24 [2][4][12]. Core Insights - Hansoh Pharmaceutical has successfully transitioned from a traditional generic drug manufacturer to an innovative biopharmaceutical company, with innovative drug sales reaching RMB 6.87 billion in FY2023, a 37.1% year-on-year increase, accounting for 68% of total revenue [1][8][14]. - The company is expected to continue strong revenue growth driven by its innovative drug portfolio, particularly key assets like Aumolertinib (Ameile), Tenofovir Amibufenamide (Hengmu), and Pegmolesatide (Saintrolai) [1][8][14]. - Hansoh's R&D spending has increased significantly, reaching RMB 21 billion in FY2023, representing 21% of total revenue, with ongoing development of over 50 clinical trials across more than 30 innovative drug products [1][11][62]. Summary by Sections Innovative Drug Growth - Hansoh's innovative drug sales are projected to grow by 37% in FY2024, reaching RMB 9.5 billion, which will constitute 79% of total revenue [2][12][129]. - Aumolertinib is expected to maintain strong sales momentum, particularly after being included in the National Reimbursement Drug List (NRDL) for first-line non-small cell lung cancer (NSCLC) [1][17][36]. Diverse Product Pipeline - The company has a robust pipeline with significant potential in areas such as antibody-drug conjugates (ADCs), GLP-1 receptor agonists, and TYK2 inhibitors, with ongoing clinical trials for multiple indications [1][11][62]. - ADC assets like HS-20093 and HS-20089 have gained global recognition through licensing agreements with GSK, enhancing their development prospects [1][12][120]. Global Collaboration - Hansoh is actively seeking global collaboration opportunities to strengthen its product pipeline, having established various exclusive licensing partnerships with both domestic and international entities [2][12][120]. - The company aims to become a leading platform for biotechnology collaborations in China, leveraging its R&D and commercialization capabilities [2][12][120]. Financial Performance - Total revenue for FY2024 is expected to grow by 19% to RMB 12 billion, with oncology-related sales projected to increase by 25% to RMB 7.7 billion [2][12][129]. - The report anticipates organic revenue growth rates of 12% and 14% for FY2024 and FY2025, respectively, with net profit expected to reach RMB 4.1 billion in FY2024 [2][12][129].

Investment Rating - Buy (First Coverage) [1][4] Core Views - The company is a leading innovation-driven BigPharma in China, with significant potential for international expansion [1] - The company has 8 innovative drugs approved for marketing, all included in the National Reimbursement Drug List, with innovative drug revenue reaching 6.865 billion yuan in 2023, a year-on-year increase of 37.1%, accounting for 67.9% of total revenue [1] - The company aims to increase the contribution of innovative drugs to 80% of total revenue by 2025 [1] - The company has a strong presence in oncology, CNS, anti-infectives, and metabolic diseases, with a robust pipeline of high-value innovative products [1][2] - The company is accelerating its global strategy through international BD collaborations, with significant milestones and licensing deals, such as the $1.85 billion deal with GSK for HS-20093 [2][14] Revenue and Profit Forecast - The company is expected to achieve total revenues of 11.846 billion yuan, 12.658 billion yuan, and 14.728 billion yuan in 2024, 2025, and 2026, respectively [2][4] - Net profits are forecasted to be 3.422 billion yuan, 3.614 billion yuan, and 4.073 billion yuan for the same periods, with corresponding P/E ratios of 28x, 26x, and 23x [2][4] - The company's fair equity value is estimated at 120.5 billion yuan, equivalent to 130.2 billion HKD, based on a DCF valuation with a perpetual growth rate of 2% and WACC of 8.29% [4] Key Therapeutic Areas Oncology - The company has a strong portfolio in oncology, with key products including Ameile (Aumolertinib) and Haosen Xinfu (Flumatinib), generating 6.169 billion yuan in revenue in 2023, accounting for 61.0% of total revenue [1][2] - Aumolertinib, a third-generation EGFR-TKI, is a leading product in the lung cancer market, with ongoing Phase III trials for adjuvant therapy and other indications [19][20] - The company is advancing its ADC pipeline, including HS-20093 (B7-H3 ADC) and HS-20089 (B7-H4 ADC), with significant global licensing deals with GSK [14][26][27] Central Nervous System (CNS) - The company has a long-standing advantage in CNS, with products like Inebilizumab (Xinyue), the only CD19 monoclonal antibody approved for NMOSD treatment [31][32] - HS-10380, targeting schizophrenia, is in Phase Ib/II clinical trials, with potential to address unmet needs in the mental health market [33][34] Anti-Infectives - The company has two self-developed innovative drugs in the anti-infective field: Hengmu (Ainuovirine) and Mailingda (Morinidazole) [35][36] - Ibrexafungerp, a fourth-generation antifungal drug, is under review for domestic approval, with potential to address recurrent vulvovaginal candidiasis (RVVC) [39][40] Metabolic and Other Diseases - The company has launched Fulaimei (Pegylated Loxenatide) and Shengluolai (Peginesatide), with HS-20094, a GLP-1/GIP dual agonist, in Phase II clinical trials for diabetes and obesity [40][41] - HS-10374, a TYK2 inhibitor, is in Phase II trials, positioning the company as a global leader in this therapeutic area [43][44] - HS-10390, an ETA/AT1 dual receptor antagonist, is in Phase I trials for FSGS and IgA nephropathy, with potential to address unmet needs in renal diseases [45][46]