Ge Long Hui·2026-01-15 04:57Core Viewpoint - Jiangsu Hengrui Medicine Co., Ltd. is recognized as a leading player in China's biopharmaceutical industry, transitioning from generic drugs to innovative drugs, with its strategic movements indicating the development direction of the entire Chinese pharmaceutical industry [1] Group 1: Strategic Overview - Hengrui has undergone a painful transformation over the past five years, successfully navigating the challenges posed by the National Drug Centralized Procurement (VBP), with 2023 revenue reaching 22.82 billion yuan, a year-on-year increase of 7.26%, and net profit of 4.30 billion yuan, up 10.14% [2] - The company is expected to accelerate growth in 2024 and 2025, with projected revenue of 27.99 billion yuan in 2024, a significant year-on-year increase of 22.63%, and innovative drug revenue surpassing 60% by mid-2025 [2] Group 2: Investment Logic Reconstruction - The core investment logic for Hengrui is restructured around four dimensions: the clearance of existing risks and realization of innovation, global competitiveness of the ADC platform, explosive potential of chronic disease pipelines, and iterative internationalization models [4] - The ADC pipeline, led by SHR-A1811, has established a competitive edge against imported drugs and validated its underlying technology platform (HRMAP) through extensive external licensing [4] Group 3: Financial Deep Dive - Hengrui's financial reports show a clear V-shaped recovery trend, with 2023 revenue of 22.82 billion yuan and innovative drug revenue reaching 10.64 billion yuan, a year-on-year increase of 22.1% [6] - By 2025, the company anticipates revenue of 33.65 billion yuan, with net profit projected between 6 to 7 billion yuan, reflecting a growth rate of approximately 29% [6] - Operating cash flow surged by 504.12% to 7.644 billion yuan in 2023, indicating strong cash generation capabilities [10] Group 4: Oncology Pipeline Insights - Hengrui's oncology pipeline has shifted from a "Me-too/Me-better" strategy to a "Best-in-Class" and "First-in-Class" approach, with the ADC platform becoming a new cornerstone [12] - SHR-A1811 is positioned as a strategic asset, directly competing with DS-8201, and has received breakthrough therapy designations for multiple indications [14] Group 5: Non-Oncology Growth Areas - Hengrui's deep layout in non-oncology fields serves as a stabilizer for its performance and a second growth curve, particularly in metabolic diseases, cardiovascular, and autoimmune areas [23] - The company is actively participating in the GLP-1 market, with HRS9531 showing potential for superior efficacy in weight loss and diabetes management [24] Group 6: Globalization Strategy 2.0 - Hengrui's internationalization strategy has evolved from simple export to a more integrated approach involving NewCo and licensing-out models, allowing for risk isolation and capital leverage [33] - The NewCo model enables Hengrui to finance high-risk clinical developments through partnerships with top-tier venture capital, mitigating cash flow strain [34] Group 7: Policy Environment and Market Access - The impact of the VBP has diminished, with Hengrui's main generic products now serving as cash cows to support innovative drug development [41] - Successful negotiations in the National Reimbursement Drug List (NRDL) for innovative drugs are expected to catalyze growth, despite average price reductions of around 60% [42]