Investment Rating - Maintains a Buy rating for Simcere Pharmaceutical (2096 HK) with a target price of HKD 10.00, implying a potential upside of 90.9% [1] Core Views - 1H24 Performance: Adjusted net profit grew by 36% YoY, driven by gross margin recovery (+3.3ppts) and reduced R&D expense ratio (-4.8ppts) [1] - Revenue Recovery: Expected 2024-26 revenue CAGR of 14%, supported by stable sales of Xianbixin and rapid market penetration of new products [1] - New Product Launches: Key products like Xianbixin (sublingual tablet), Cosela, and Suvaximab are expected to drive growth, with combined peak sales potential exceeding RMB 8.5 billion [1] Financial Performance - 1H24 Revenue: Declined by 7.9% YoY, with innovative drug revenue down 8.7%, accounting for 70.7% of total revenue [1] - Gross Margin: Improved to 78.8% in 2024E, up 0.3ppts from previous forecasts, with further improvement expected to 79.8% by 2026E [4] - Adjusted Net Profit: Forecasted to grow at a CAGR of 21% from 2024-26, reaching RMB 1.37 billion by 2026E [1][4] Product Pipeline and Market Potential - Xianbixin: Sales expected to stabilize, with sublingual tablet launch expanding treatment scenarios and maintaining a peak sales target of RMB 5.5 billion [1] - Cosela: Potential inclusion in NRDL by end of 2024 could drive annual sales to exceed RMB 500 million [1] - New Launches: Suvaximab and Daliresib expected to contribute over RMB 3 billion in peak sales within the next 18 months [1] Valuation and Forecasts - DCF Valuation: Target price revised to HKD 10.00 based on updated financial forecasts, reflecting a 91% upside potential [1] - Free Cash Flow: Expected to grow from RMB 750 million in 2025E to RMB 1.83 billion by 2033E, driven by operational leverage and cost efficiency [5] Industry Comparison - Biotech Sector: Simcere Pharmaceutical is part of a broader biotech sector with strong growth potential, as evidenced by similar buy ratings for peers like Legend Biotech (LEGN US) and BeiGene (6160 HK) [6]
先声药业：1H24利润端复苏势头良好，维持买入评级