Zhong Zheng Wang·2025-09-09 13:53Core Viewpoint - Morgan Stanley has upgraded Fosun Pharma's rating to "Overweight" due to its anticipated profit turning point and undervalued innovative drug business, raising the target price for A-shares to 42 RMB and H-shares to 33 HKD [1] Group 1: Financial Performance - Fosun Pharma reported a revenue of 19.514 billion RMB and a net profit of 1.702 billion RMB for the first half of 2025, marking a year-on-year growth of 38.96% [1] - The revenue from innovative drugs exceeded 4.3 billion RMB, representing a year-on-year increase of approximately 14%, accounting for about 32% of the pharmaceutical business revenue [1] - Morgan Stanley projects that by 2030, the revenue from innovative drugs will constitute 45% of the company's total pharmaceutical sales [1] Group 2: Research and Development - Fosun Pharma has established three mature R&D entities focusing on key technology platforms such as antibodies, ADC, small molecules, and cell therapy, targeting core treatment areas like solid tumors and immune inflammation [2] - The innovative drug pipeline, including products like DPP-1, MEK1/2, and AR1001, is crucial for the growth of innovative drug revenue, with significant potential from core pipelines like HLX43, HLX22, and the anti-PD-1 monoclonal antibody [2] Group 3: International Market and Business Development - In the first half of 2025, Fosun Pharma's overseas revenue reached 5.478 billion RMB, accounting for approximately 28.07% of total revenue [3] - The company has strengthened global licensing collaborations, including a recent agreement with Expedition for the development and commercialization of the product XH-S004 outside of China, with a potential total value of 645 million USD [3] - A stock incentive plan introduced by Fosun Pharma has boosted market confidence, setting a compound annual growth rate target of about 20% for net profit and innovative drug revenue from 2025 to 2027 [3]