Core Viewpoint - The Hu Run Research Institute released the "2025 Hu Run Women Entrepreneurs List," highlighting that Zhong Huijuan and her daughter Sun Yuan topped the list as China's richest women with a wealth of 141 billion yuan, marking an increase of 64 billion yuan or 83% from the previous year. This is the first time a woman from the life and health sector has achieved this status [1][3]. Company Overview - Zhong Huijuan, 64, is from Lianyungang, Jiangsu, and is married to Sun Piaoyang, the founder of Heng Rui Medicine. Together, they are known as "China's most powerful pharmaceutical couple," each leading companies with market values exceeding 100 billion yuan [3]. - Over the past year, Hansoh Pharmaceutical's market value doubled, driven by the launch of innovative drugs and international collaborations. Since 2025, the company's stock price has increased by over 115%, reaching 35.78 HKD per share, with a market capitalization of 216.65 billion HKD [3][4]. Business Transformation - Hansoh Pharmaceutical transitioned from a generic drug manufacturer to a leader in innovative drugs, reflecting the evolution of China's pharmaceutical industry over the past three decades. As of the first half of 2025, innovative drug revenue accounted for 82.7% of total revenue, with frequent overseas licensing deals [3][7]. - The company faced significant challenges due to the implementation of centralized drug procurement policies, which drastically reduced profits from generic drugs. In response, the company shifted its focus to innovative drug development, increasing R&D investments and establishing multiple research centers [7][10]. Financial Performance - In 2024, Hansoh Pharmaceutical reported total revenue of 12.261 billion yuan, a year-on-year increase of 21.3%, with a net profit of 4.372 billion yuan, up 33.4%. Innovative drug and collaboration product sales reached 9.477 billion yuan, a 38.1% increase, making up 77.3% of total revenue [8][10]. - For the first half of 2025, the company achieved revenue of 7.434 billion yuan, a 14.3% increase, and a net profit of 3.135 billion yuan, up 15%. Innovative drug sales further increased to 6.145 billion yuan, representing 82.7% of total revenue [8][10]. R&D Investment - Hansoh Pharmaceutical's commitment to R&D is evident, with R&D expenditures of approximately 2.702 billion yuan in 2024, a 28.8% increase, accounting for over 20% of total revenue. In the first half of 2025, R&D spending was about 1.441 billion yuan, up 20.4% [10]. - The company has over 1,800 R&D professionals and is advancing more than 70 innovative drug clinical trials across various therapeutic areas, including oncology and autoimmune diseases [10][11]. Licensing and Collaborations - International pharmaceutical giants have increasingly sought partnerships with Hansoh Pharmaceutical, leading to significant licensing agreements. Notable deals include a $1.85 billion upfront payment from GSK for ADC drug HS-20093 and a $1.12 billion upfront payment from Merck for GLP-1 receptor agonist HS-10535 [11]. - The company has established a "R&D-licensing-reinvestment" cycle, ensuring stable revenue growth while funding further research initiatives [11][12]. Market Position - The wealth increase of Zhong Huijuan and her daughter is largely attributed to the rise in Hansoh Pharmaceutical's stock price, which has surged over 115% since 2025. However, compared to other major domestic pharmaceutical companies, Hansoh remains relatively under the radar, focusing on R&D rather than media attention [12].

Core Viewpoint - The company, Hansoh Pharmaceutical, reported a 14.3% year-on-year revenue growth in the first half of 2025, reaching 7.43 billion yuan, with a net profit attributable to shareholders increasing by 15.0% to 3.14 billion yuan, exceeding expectations due to the strong sales of innovative drugs and BD collaboration income [1] Group 1: Financial Performance - In the first half of 2025, the company's comprehensive gross margin remained stable at 91.1% [1] - The sales expense ratio decreased by 2.0 percentage points to 24.5% year-on-year [1] - R&D expenses increased by 20.4% to 1.44 billion yuan, with the R&D expense ratio rising from 18.4% in the first half of 2024 to 19.4% [1] Group 2: Innovative Drug and Collaboration Revenue - The revenue from innovative drugs and collaboration increased by 22.1% year-on-year to 6.15 billion yuan, contributing 82.7% to total revenue, up from 77.3% in the first half of 2024 [2] - The sales of oncology products reached 4.53 billion yuan, accounting for 61% of total revenue, driven by the sales growth of Ameluz and Huasenxinfu [2] - Two new indications for Ameluz received NMPA approval, which are expected to further boost sales [2] Group 3: Innovation Pipeline - The company has over 40 innovative drugs in development and more than 70 clinical trials ongoing, covering both oncology and non-oncology areas [3] - Eight innovative drugs entered clinical stages for the first time in the first half of 2025, including HS-10561 (BTK inhibitor) and HS-20108 (ADC) [3] - Three new pivotal Phase III clinical trials were initiated, including HS-20093 (B7-H3 ADC for bone and soft tissue sarcoma) [3] Group 4: Licensing Agreements - In June 2025, the company granted global rights (excluding Greater China) for HS-20094 (GLP-1/GIP) to Regeneron, including an upfront payment of 80 million USD and milestone payments totaling 1.93 billion USD [4] - The company previously licensed two ADC drugs to GSK and HS-10535 to MSD [4] - Ongoing clinical trials for HS-20093 and HS-20089 are targeting various cancers, with HS-20094 and HS-10374 also in advanced clinical research stages [4] Group 5: Earnings Forecast and Target Price - The earnings per share forecast for 2025 was raised from 0.73 yuan to 0.88 yuan, with subsequent years also seeing upward adjustments [4] - The target price was increased from 25.1 HKD to 43.8 HKD, indicating a 22% upside potential, while maintaining a buy rating [4]

Investment Rating - The report maintains a "Buy" rating for Hansoh Pharmaceutical [2][9][16] Core Views - Hansoh Pharmaceutical's 1H25 revenue increased by 14.3% year-on-year to Rmb7.43 billion, with net profit rising by 15.0% to Rmb3.14 billion, exceeding expectations due to strong sales of innovative drugs and BD collaboration revenue [5][12][16] - The company's gross margin remained stable at 91.1%, while the selling expense ratio decreased by 2.0 percentage points to 24.5% [5][12] - R&D expenses grew by 20.4% to Rmb1.44 billion, with the R&D expense ratio increasing to 19.4% from 18.4% in 1H24 [5][12] Revenue and Profitability - Innovative drugs and collaborative products contributed Rmb6.15 billion in revenue, a 22.1% increase year-on-year, accounting for 82.7% of total revenue [6][13] - Oncology product sales reached Rmb4.53 billion, representing 61% of total revenue, driven by the sales ramp-up of Ameile and Hansoh Xinfu [6][13] - The CNS and anti-infective sectors generated Rmb768 million and Rmb735 million in sales, respectively, together accounting for 20% of total revenue [6][13] Future Growth Drivers - The company has over 40 innovative drugs in development and more than 70 ongoing clinical trials across oncology and non-oncology fields [7][14] - Eight innovative drugs entered clinical stages for the first time in 1H25, with three new phase III pivotal registration trials initiated [7][14] - Successful licensing of HS-20094 (GLP-1/GIP) to Regeneron, with significant upfront and milestone payments, indicates strong collaboration potential [8][15] Financial Forecasts - EPS forecasts for 2025, 2026, and 2027 have been raised to Rmb0.88, Rmb0.95, and Rmb1.06, respectively [9][16] - The target price has been adjusted from HK$25.1 to HK$43.8, indicating a 22% upside potential [9][16] - Projected revenue and net profit growth rates for the coming years are 15.13% and 20.13% for 2025, respectively [10][19]

Core Insights - The company reported a total revenue of 12.261 billion yuan for 2024, representing a year-on-year growth of 21.3% [2] - The net profit attributable to shareholders reached 4.372 billion yuan, with a year-on-year increase of 33.4% [2] - The basic earnings per share were 0.74 yuan, also reflecting a growth of 33.3% year-on-year [2] Revenue Breakdown - Sales revenue from innovative drugs and cooperative products amounted to 9.477 billion yuan, accounting for 77.3% of total revenue [2] - The company achieved robust growth in core therapeutic areas including oncology, central nervous system, metabolism, and other diseases [2] Product Performance - The core product, Amelot, has been particularly successful, with three indications approved in China and two renewed for inclusion in the national medical insurance directory [3] - The product Housen Xinfu, a novel second-generation TKI for chronic myeloid leukemia, has also been renewed for inclusion in the national medical insurance directory [3] - The product Xinyue, the first humanized CD19 monoclonal antibody approved for treating AQP4 antibody-positive NMOSD, has been included in the national medical insurance directory [3] R&D Investment - The R&D team consists of over 1,800 researchers across four centers in China and the U.S. [4] - The company submitted 57 formal patent applications in China and 222 overseas, with respective authorizations of 48 and 42 [4] - Over 60 innovative drug clinical trials are ongoing, with eight new candidates entering clinical research during the reporting period [4] Compliance Issues - The company faced significant compliance challenges, including a fine of 2.1 million yuan and the confiscation of illegal gains totaling approximately 25.54 million yuan due to unfair competition [6] - Violations included improper payments to doctors and various fraudulent activities during academic events [6] - The core product Amelot was notably involved in these compliance issues, with projected sales reaching 5 billion yuan in 2024, up from 3.5 billion yuan in 2023 [6] Workforce Challenges - The company has experienced a reduction in workforce, with employee numbers decreasing from 10,523 at the end of 2022 to 8,989 at the end of 2024, a total reduction of 1,534 employees [7] - There are 75 ongoing legal cases involving the company, with 25 related to labor disputes [7]