SINO BIOPHARM(HK:01177) First Shanghai Securities·2024-06-17 09:01Investment Rating - The report assigns a "Buy" rating for the company with a target price of HKD 3.25, indicating a potential upside of 15.6% from the current price of HKD 2.81 [1]. Core Insights - The company is expected to see a gradual increase in the proportion of innovative drugs, which will likely enhance revenue growth in the future. The innovative drug revenue grew by 13.3% year-on-year to HKD 9.89 billion, accounting for 37.8% of total revenue [1]. - The company’s adjusted net profit for 2023 is projected to increase by 1.5% to HKD 2.59 billion, despite a decline in net profit attributable to shareholders by 8.3% to HKD 2.33 billion [1]. - The company has a robust pipeline of innovative products, with several expected to launch in the coming years, which will contribute to revenue growth [1]. Financial Summary - For 2023, the company reported total revenue of HKD 26.2 billion, a slight increase of 0.7% year-on-year. The revenue breakdown includes oncology drugs (33.6%), liver disease (14.6%), respiratory (11.3%), and others [1][2]. - The gross margin decreased by 1.8 percentage points to 81.0%, while R&D expenses amounted to HKD 4.7 billion, representing 18% of total revenue [1]. - The company’s operating cash flow decreased by 3% year-on-year to HKD 6.07 billion, with cash reserves reaching HKD 21.1 billion, including net cash of HKD 9.27 billion [1]. Product Pipeline - The company’s innovative product pipeline includes several key drugs, with expected launches in 2024 and 2025, such as Bemarituzumab and TQB3616, which are anticipated to significantly impact revenue [1]. - The company’s subsidiary, invoX, has shown promising results with its FS222 product, indicating strong potential for future development [1]. Market Position - The company has a market capitalization of HKD 52.8 billion, with a P/E ratio of 20.7 for 2024, reflecting its growth potential in the pharmaceutical industry [1][2].