Hengrui Pharma(600276) CSC SECURITIES (HK) LTD·2025-05-08 10:23Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside of 15% to less than 35% [6][11]. Core Insights - The company reported a Q1 2025 revenue of 7.21 billion RMB, representing a year-over-year increase of 20.1%, and a net profit of 1.87 billion RMB, up 36.9% year-over-year [6]. - The significant profit growth in Q1 is attributed to a $75 million upfront payment from IDEAYA for a licensing agreement, with an estimated core revenue growth of approximately 11% after excluding this payment [8]. - The company has a robust pipeline with 26 innovative molecules entering clinical stages in 2024, covering various therapeutic areas, and is expected to showcase 15 innovative drugs at the upcoming ASCO conference [8]. - Future net profits are projected to be 6.98 billion RMB, 8.75 billion RMB, and 10.4 billion RMB for 2025, 2026, and 2027 respectively, with year-over-year growth rates of 10.2%, 25.3%, and 18.9% [10]. Summary by Sections Company Overview - The company operates in the pharmaceutical and biotechnology sector, with a market capitalization of 328.9 billion RMB and a share price of 51.56 RMB as of May 7, 2025 [1]. Financial Performance - The company achieved a gross margin of 85.2% in Q1 2025, an increase of 0.9 percentage points year-over-year, while the expense ratio decreased by 1.3 percentage points to 55.6% [8]. - The projected earnings per share (EPS) for 2025, 2026, and 2027 are 1.09 RMB, 1.37 RMB, and 1.63 RMB respectively, with corresponding price-to-earnings (P/E) ratios of 47X, 38X, and 32X [10]. Shareholder Information - The major shareholder is Jiangsu Hengrui Medicine Group Co., Ltd., holding 24.11% of the shares, while institutional investors account for 9.1% of the circulating A-shares [2][1].