Hengrui Pharma(SH:600276) GOLDEN SUN SECURITIES·2024-10-28 00:10Investment Rating - The report maintains a "Buy" rating for the company [3]. Core Views - The company's revenue for the first three quarters of 2024 reached 20.189 billion yuan, a year-on-year increase of 18.67%, while the net profit attributable to shareholders was 4.620 billion yuan, up 32.98% year-on-year. The third quarter alone saw revenue of 6.589 billion yuan, a year-on-year increase of 12.72%, and a net profit of 1.188 billion yuan, which is a slight increase of 1.91% year-on-year [1]. - The report highlights that revenue growth is primarily driven by innovative drugs, while profit growth is slightly below expectations due to increased sales, research and management expenses [1]. - The company is expected to see a gradual recovery from the impact of centralized procurement, with an increasing proportion of revenue coming from innovative drugs, which will support long-term growth [1]. Financial Performance Summary - For the first three quarters of 2024, the sales expense ratio was 30.26%, a decrease of 1.53 percentage points year-on-year, with absolute sales expenses amounting to 6.109 billion yuan, an increase of 12.96% year-on-year. The R&D expense ratio was 22.53%, an increase of 0.63 percentage points year-on-year, with absolute R&D expenses of 4.549 billion yuan, up 22.10% year-on-year [1]. - The company’s net cash flow from operating activities for the first three quarters was 4.585 billion yuan, a year-on-year increase of 6.42% [1]. - The report projects the company's net profit for 2024-2026 to be 6.017 billion yuan, 6.519 billion yuan, and 7.660 billion yuan respectively, with corresponding year-on-year growth rates of 39.9%, 8.3%, and 17.5% [2][1]. Product Development and Market Outlook - The company has received approval for the IL-17A monoclonal antibody and expects to gain approvals for several other innovative drugs in 2024, increasing the number of first-class new drugs to 20 [1]. - The report notes that the company’s internationalization efforts are progressing, with the FDA accepting the BLA for the combination of carrelizumab and apatinib for first-line HCC, with a PDUFA date set for March 23, 2025 [1]. - The company is expected to maintain a stable but slightly declining trend in domestic generic drugs [1].