Hengrui Pharma(SH:600276) Southwest Securities·2024-08-23 10:13Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - 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 revenue from innovative drugs grew by 33% year-on-year, totaling 6.612 billion yuan, supported by a 1.6 billion euro upfront payment from Merck [2] - The approval of the innovative drug Fumaric Acid Teglazid in the first half of 2024 and the potential approval of eight additional innovative drugs in the second half 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] Market Position and Growth Potential - The company is positioned as a leading choice for investment in domestic innovative pharmaceuticals, with an increasing proportion of revenue from innovative drugs and accelerated innovation upgrades [3] - The internationalization of innovative drugs is expected to undergo a qualitative change, enhancing the company's market presence [3] Future Outlook - The company has 10 clinical trials progressing to Phase III and 20 to Phase II, indicating a robust pipeline for future product launches [2] - The licensing agreement with Hercules for the GLP-1 product portfolio is expected to significantly contribute to revenue growth and international market expansion [2]