2025-11-24 01:46Investment Rating - The report assigns a "Buy" rating for Jiangsu Hengrui Pharmaceuticals with a target price of Rmb123.000, indicating an expected share price return of 95.5% and an expected total return of 95.9% [4]. Core Insights - Jiangsu Hengrui Pharmaceuticals is positioned as a leading global biopharma, ranking No.2 in the size of its originated pipeline and No.3 in pipeline growth, benefiting from China's status as a significant source of global innovation [4][6]. - The report highlights that approximately 30% of global innovative drug trials originate from China, and about one-third of global innovative pipelines are from China-headquartered companies, indicating a robust growth trajectory for the industry [2][3]. - The Chinese pharmaceutical market shows significant potential for growth in innovative drugs, which currently account for only about 14% of total drug sales in hospitals, compared to much higher percentages in developed markets [3]. Summary by Sections Globalization and Innovation - Jiangsu Hengrui has made substantial progress in globalization, with over 20 global trials ongoing and a diversified portfolio across key therapeutic areas [6]. - The company leverages global partnerships and in-house capabilities to maximize innovation impact, with a strong record in out-licensing and strategic partnerships since 2018 [6]. Market Dynamics - The report notes that the demand for affordable innovation from China is expected to thrive due to increasing pricing pressures and the loss of exclusivity for leading multinational corporations [2]. - China's commitment to supporting innovative drugs is underscored by strong government backing for commercial health insurance, which is anticipated to improve coverage for innovative drugs in the future [3]. Financial Valuation - A discounted cash flow (DCF) approach is used to assess the fair value of Jiangsu Hengrui Pharmaceuticals, with a terminal growth rate of 4% and a weighted average cost of capital (WACC) of 8.3% [7].