Hengrui Pharma(SH:600276) Sou Hu Cai Jing·2025-05-19 09:18Core Viewpoint - Heng Rui Medicine, a leading Chinese innovative pharmaceutical company, is set to launch its global IPO on the Hong Kong Stock Exchange, aiming to raise up to HKD 130.8 billion, marking the largest IPO in the Hong Kong pharmaceutical sector in the past five years [1][4]. Group 1: Financial Performance - In 2024, Heng Rui Medicine reported revenue of CNY 27.985 billion, a 22.63% increase, and a net profit of CNY 6.337 billion, up 47.28%, returning to 2020 levels [4]. - The core driver of growth is innovative drugs, with 19 Class 1 new drugs launched, generating CNY 13.892 billion in revenue, a 30.6% increase, accounting for 46.3% of total revenue [4]. - The proportion of generic drugs decreased from 60.3% to 42% [4]. Group 2: Research and Development - Heng Rui Medicine's R&D investment reached CNY 8.3 billion in 2024, representing 29.4% of revenue, maintaining a position among the top two globally for R&D pipeline scale for four consecutive years [4]. - The company has engaged in 14 licensing agreements totaling USD 14 billion, collaborating with major firms like Merck and IDEAYA, with upfront payments of CNY 2.7 billion [4]. Group 3: IPO Details - The IPO price range is set at HKD 41.45-44.05, reflecting a 19.3% discount compared to the average price on the A-share market [4]. - A strong cornerstone investor base, including GIC and Hillhouse Capital, has committed to purchasing 43% of the shares, injecting HKD 4.1 billion, indicating international capital's recognition [4]. Group 4: Market Sentiment and Trends - The average first-day gain for new pharmaceutical stocks in Hong Kong in 2024 was 11.8%, with Heng Rui expected to attract long-term capital due to its unique position as a leading player [5]. - The oversubscription rate for Heng Rui's IPO reached 143.47 times, with predictions of it potentially reaching 186.51 times, increasing the likelihood of price appreciation in the dark market [11]. Group 5: Risks and Challenges - The company faces challenges from policy pressures, including the impact of the ninth batch of centralized procurement, which led to a decline in generic drug revenue by CNY 844 million [13]. - Heng Rui's overseas revenue is significantly lower than competitors, with only CNY 700 million, highlighting the need for improved international market penetration [13].