Hengrui Pharma(SH:600276) Southwest Securities·2024-08-23 10:00Investment Rating - The report maintains a "Buy" rating for the company [1][3]. Core Insights - The company reported a significant revenue increase of 21.8% year-on-year, reaching 13.6 billion yuan in the first half of 2024, with a net profit attributable to shareholders of 3.43 billion yuan, up 48.7% [2]. - The innovative drug revenue grew by 33% year-on-year, amounting to 6.612 billion yuan, bolstered by a 160 million euro upfront payment from Merck [2]. - The approval of the innovative drug Fumaric Acid Tejilidine and the anticipated approval of eight additional innovative drugs in the second half of the year are expected to drive future growth [2]. - The company has entered into a licensing agreement for its GLP-1 product portfolio with Hercules, with a total transaction value of approximately 6.035 billion USD [2]. Summary by Sections Financial Performance - The company achieved a gross margin of 86.2% (+2 percentage points) and a net margin of 25.2% (+4.7 percentage points) in the first half of 2024 [2]. - The R&D expense ratio was 22.3% (+1.5 percentage points), while the sales expense ratio decreased to 29% (-4 percentage points) [2]. - The forecasted net profit for 2024-2026 is projected to be 5.41 billion, 6.56 billion, and 7.87 billion yuan, respectively, with corresponding PE ratios of 50X, 41X, and 34X [3][4]. Market Position and Future Outlook - The company is positioned as a leading choice for investment in domestic innovative pharmaceuticals, with an accelerating pace of innovation and internationalization [3]. - The report highlights the ongoing clinical trials, with 10 projects in phase III and 20 in phase II, indicating a robust pipeline for future products [2].