BeiGene-百济神州：Sales exceeding expectations and achieving non-GAAP profitability

Investment Rating - Maintain BUY rating for BeiGene, reflecting strong product growth momentum and near-term profitability [1][2][9] Core Insights - BeiGene's product sales in 2Q24 reached US $921 million, a 23% increase quarter-over-quarter and a 66% increase year-over-year, exceeding expectations [1] - The company achieved non-GAAP profitability with a net loss narrowed to US$ 120 million in 2Q24, compared to US $251 million in 1Q24, marking a significant milestone [1] - Forecasts indicate that BeiGene's zanubrutinib (zanu) will generate US$ 2.6 billion in sales for FY24, representing a 102% year-over-year increase, with peak sales projected at US $5.6 billion by 2031 [1] Summary by Sections Sales Performance - Total product sales for 1H24 reached US$ 1.67 billion, representing 51.4% of the previous FY24 estimate [1] - Zanubrutinib sales increased by 30% quarter-over-quarter and 107% year-over-year to US $637 million, capturing approximately 24% of the global BTK inhibitor market [1][2] Profitability Metrics - Gross profit margin improved to 85.0% in 2Q24 from 83.3% in 1Q24, driven by high-margin product sales and economies of scale [1] - The SG&A ratio decreased to 48% in 2Q24 from 57% in 1Q24, while the R&D ratio shrank to 49% from 62% in the previous quarter [1] Future Growth Potential - The company is advancing clinical trials for sonrotoclax and BGB-16673, which are expected to become future blockbusters [1] - Phase 3 trials for sonrotoclax in R/R CLL and R/R MCL are anticipated to start in late 2024 and early 2025, respectively [1] Financial Projections - Revenue projections for FY24E are set at US$ 3.87 billion, with net profit expected to turn positive in FY25E at US $53.4 million [2][10] - Target price raised from US$ 269.73 to US $288.93, indicating a potential upside of 57.9% from the current price of US$ 183.03 [2][9]