REMEGEN(SH:688331)2024-10-31 08:00Investment Rating - The report maintains a "Hold" rating for Rongchang Biologics with a target price of HKD 26.0 for the Hong Kong stock and RMB 35.0 for the A-share [11][18]. Core Insights - Rongchang Biologics' Q3 2024 revenue met expectations, with a significant improvement in net loss primarily due to effective control of R&D expenses. The company reported a revenue of RMB 470 million, a year-on-year increase of 34.6% and a quarter-on-quarter increase of 13.6% [11][12]. - The gross margin for Q3 2024 was 82.1%, showing a significant year-on-year and quarter-on-quarter improvement, attributed to the economic effect of increased revenue scale [11]. - The management indicated that the sales of Taitasip reached approximately RMB 270 million in Q3 2024, with a 43% year-on-year increase, driven by enhanced market access and recognition of product efficacy [12]. - R&D expenses for Q3 2024 were RMB 350 million, reflecting a 9.3% year-on-year increase but a 26.9% quarter-on-quarter decrease, indicating effective cost management [14]. Financial Summary - For 2024E, the company expects total revenue of RMB 1.769 billion, with a year-on-year growth of 64.4%. The net loss is projected to be RMB 1.34 billion [19]. - The report forecasts a gradual improvement in net loss over the next few years, with estimates of RMB 1.165 billion for 2025E and RMB 816 million for 2026E [18][19]. - The cash and cash equivalents as of September 30 were RMB 1.12 billion, with a loan credit line of RMB 2.8 billion, indicating a solid liquidity position [11].