Hengrui Pharma(SH:600276) BOCOM International·2025-04-01 10:23Investment Rating - The investment rating for the company is Neutral [2][9]. Core Insights - The company's strong growth in 2024 is driven by the continued expansion of innovative drug sales and licensing income from multiple business development (BD) deals [2][5]. - The target price has been raised to RMB 51.00, reflecting a potential upside of 3.7% from the current price of RMB 49.20 [1][2]. - The company is expected to maintain a robust growth trajectory with a projected compound annual growth rate (CAGR) of over 26% for innovative drug sales from 2024 to 2026 [5]. Financial Performance Summary - Revenue for 2025 is forecasted at RMB 32,039 million, representing a 13.5% increase from the previous estimate [4][10]. - Gross profit is expected to reach RMB 27,633 million in 2025, up 14.2% from prior forecasts [4][10]. - The net profit attributable to shareholders is projected to be RMB 7,118 million for 2025, reflecting a 13.8% increase [4][10]. - The gross margin is anticipated to improve slightly to 86.2% in 2025 [4][10]. Product Sales and Pipeline - Innovative drug sales are expected to grow by 31% to RMB 139 billion in 2024, contributing over 50% to the company's product sales revenue [5]. - The company has over 90 innovative products in clinical development, with multiple data readouts expected at major academic conferences [5][6]. - Future licensing income is anticipated to become a recurring revenue stream as early and mid-stage pipeline products are licensed to overseas pharmaceutical companies [5]. Valuation and Market Position - The current valuation is considered reasonable, with a price-to-earnings ratio of 44 times the 2025 earnings [5][6]. - The company faces long-term risks related to price competition in the generic drug market, which may limit upside potential [5].