Core Viewpoint - Jiangsu Hengrui Medicine Co., Ltd. has completed the first lock-up period of its 2023 employee stock ownership plan, with all shares sold or transferred, indicating a significant step in its employee incentive strategy [1][4]. Group 1: Employee Stock Ownership Plan Implementation - The company held board and supervisory meetings on November 3, 2023, and a temporary shareholders' meeting on November 23, 2023, to approve the 2023 employee stock ownership plan [1]. - On December 27, 2023, the company received a transfer confirmation for 11.5 million shares to the employee stock ownership plan account at a price of 23.85 yuan per share [2]. - The first meeting of the employee stock ownership plan holders was held on December 27, 2023, where a management committee was established to oversee the plan [2]. Group 2: Lock-up Period and Share Transfer - A total of 4.1605 million shares were unlocked during the first lock-up period, accounting for 0.065% of the company's total share capital [4]. - As of April 8, 2025, 2.5961 million shares were transferred non-traditionally to the plan holders, while 1.5644 million shares were sold through centralized bidding [4]. Group 3: Drug Registration and New Indications - The company’s subsidiary, Suzhou MSD Biopharmaceutical Co., Ltd., received a drug registration certificate for its innovative drug, Fuanqi Zhuan Injection, for a new indication in treating adult patients with active ankylosing spondylitis [7]. - The drug is classified as a Class 1 therapeutic biological product and is prescribed for patients with inadequate response to conventional treatments [7][8]. - The approval of this new indication is significant given the prevalence of ankylosing spondylitis in China, with nearly 4 million patients [8]. Group 4: Drug Development and Market Potential - Fuanqi Zhuan is a recombinant humanized monoclonal antibody targeting IL-17A, which plays a crucial role in the inflammatory process of ankylosing spondylitis [9]. - The global market for IL-17A inhibitors is competitive, with several other products already approved, indicating a substantial market opportunity for Fuanqi Zhuan [9][10]. - The company has invested approximately 65.135 million yuan in the development of Fuanqi Zhuan, highlighting its commitment to advancing innovative treatments [10].

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company is expected to achieve an EPS of 1.06/1.17 CNY for 2025-26, with a new forecast of 1.42 CNY for 2027. The target price is set at 56.18 CNY based on a PE ratio of 53 for 2025 [2] - The company reported a significant revenue increase of 22.63% year-on-year for 2024, reaching 27.985 billion CNY, and a net profit increase of 47.28%, totaling 6.337 billion CNY [9] - The company is actively advancing its internationalization efforts, with several products receiving FDA approval and significant licensing agreements contributing to revenue growth [9] Financial Information Summary - Revenue (in million CNY): - 2023A: 22,820 - 2024A: 27,985 (22.6% YoY growth) - 2025E: 31,684 (13.2% YoY growth) - 2026E: 35,553 (12.2% YoY growth) - 2027E: 40,900 (15.0% YoY growth) [4] - Net Profit (in million CNY): - 2023A: 4,302 - 2024A: 6,337 (47.3% YoY growth) - 2025E: 6,759 (6.7% YoY growth) - 2026E: 7,477 (10.6% YoY growth) - 2027E: 9,060 (21.2% YoY growth) [4] - EPS (in CNY): - 2023A: 0.67 - 2024A: 0.99 - 2025E: 1.06 - 2026E: 1.17 - 2027E: 1.42 [4] - Gross Margin: - 2023A: 84.6% - 2024A: 86.2% - 2025E: 84.5% - 2026E: 84.9% - 2027E: 85.4% [4] - Net Margin: - 2023A: 18.9% - 2024A: 22.6% - 2025E: 21.3% - 2026E: 21.0% - 2027E: 22.2% [4]

Core Viewpoint - Heng Rui Medicine's subsidiary has received approval for a new indication for its innovative drug, demonstrating the company's ongoing commitment to expanding its product offerings in the biopharmaceutical sector [1] Group 1: Company Developments - The subsidiary, Suzhou Sediya Biopharmaceutical Co., Ltd., has been granted a drug registration certificate by the National Medical Products Administration for the new indication of Funazhuan Injection [1] - Funazhuan Injection is now approved for the routine treatment of adult patients with active ankylosing spondylitis who have inadequate response to conventional therapies [1] - The drug was previously approved for the treatment of moderate to severe plaque psoriasis in adults suitable for systemic therapy or phototherapy [1] Group 2: Financial Aspects - The total research and development investment for the related projects has reached approximately 651 million yuan [1]

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company is expected to achieve an EPS of 1.06/1.17 CNY for 2025-26, with a new forecast of 1.42 CNY for 2027. The target price is set at 56.18 CNY based on a PE ratio of 53 for 2025 [2] - The company reported a significant revenue increase of 22.63% year-on-year for 2024, reaching 27.985 billion CNY, and a net profit increase of 47.28%, totaling 6.337 billion CNY [9] - The company is actively advancing its internationalization efforts, with several products receiving FDA approval and significant licensing agreements contributing to revenue growth [9] Financial Information Summary - Revenue (in million CNY): - 2023A: 22,820 - 2024A: 27,985 (22.6% YoY growth) - 2025E: 31,684 (13.2% YoY growth) - 2026E: 35,553 (12.2% YoY growth) - 2027E: 40,900 (15.0% YoY growth) [4] - Net Profit (in million CNY): - 2023A: 4,302 - 2024A: 6,337 (47.3% YoY growth) - 2025E: 6,759 (6.7% YoY growth) - 2026E: 7,477 (10.6% YoY growth) - 2027E: 9,060 (21.2% YoY growth) [4] - EPS (in CNY): - 2023A: 0.67 - 2024A: 0.99 - 2025E: 1.06 - 2026E: 1.17 - 2027E: 1.42 [4] - Gross Margin: - 2023A: 84.6% - 2024A: 86.2% - 2025E: 84.5% - 2026E: 84.9% - 2027E: 85.4% [4] - Net Margin: - 2023A: 18.9% - 2024A: 22.6% - 2025E: 21.3% - 2026E: 21.0% - 2027E: 22.2% [4]