Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company reported a revenue of 15.028 billion RMB (+22.6% YoY) and a net profit of 5.555 billion RMB (+27.1% YoY) for the year 2025, with innovative drugs contributing 12.354 billion RMB (+30.4% YoY), accounting for 82.2% of total revenue [1][7] - The growth is driven by both innovation and business development (BD), indicating a strong outlook for continued growth [1] Revenue Breakdown - Oncology segment revenue reached 9.974 billion RMB (+23% YoY), primarily due to the strong performance of core products like Amivantamab and milestone income from GSK [2] - Anti-infection revenue was 1.586 billion RMB (+8% YoY), driven by the sales of Adefovir [2] - CNS segment revenue was 1.310 billion RMB (-5% YoY), with the negative impact from centralized procurement on generic drugs largely mitigated [2] - Revenue from metabolic and other diseases surged to 2.158 billion RMB (+67% YoY), mainly due to milestone payments from Merck [2] R&D Progress - The company has 8+1 innovative drugs and 15+3 indications approved, with 40+ molecules in over 70 clinical trials [3] - Key pipelines include Amivantamab, HS-20093, HS-20089, HS-20094, and HS-20117, with several in Phase III clinical trials [3] International Collaboration - The company has achieved at least one high-quality external authorization each year for the past three years, accumulating 542 million USD in upfront payments and a total of 8.8 billion USD in potential revenue from five projects in Europe and the US [4] - Ongoing collaborations with GSK, Regeneron, and MSD are progressing positively, with several projects in various clinical stages [4] Profit Forecast and Valuation - The company’s net profit forecasts for 2026 and 2027 have been raised to 6.228 billion RMB and 6.602 billion RMB, respectively, reflecting an increase of 14% and 15% [5] - The target price is set at 43.68 HKD, based on a sum-of-the-parts (SOTP) valuation of 264.5 billion HKD [5]

Investment Rating - The report does not explicitly state the investment rating for Hansoh Pharma Core Insights - Hansoh Pharma achieved revenue of RMB 15.0 billion in FY25, representing a 23% year-over-year increase. Innovative drug revenue reached RMB 10.2 billion (+30% YoY), while generic drug revenue was RMB 2.7 billion (-4% YoY). Collaboration revenue amounted to RMB 2.1 billion (+35% YoY) [1][4][5] - The proportion of innovative drug and collaboration income increased to 82% of total revenue, indicating a strong focus on innovative products [1][4] - The gross margin stood at 90.0%, down 1 percentage point year-over-year, while the operating profit margin increased by 4 percentage points to 36% due to improved selling expense ratios [5] - The net profit attributable to shareholders was RMB 5.56 billion, reflecting a 27% increase year-over-year, aligning with market expectations [1][5] Segment Analysis - Oncology revenue was RMB 10.0 billion (+23% YoY), accounting for 66% of total revenue. Anti-infective revenue was RMB 1.6 billion (+8% YoY), making up 12% of total revenue. Central nervous system revenue was RMB 1.3 billion (-5% YoY), representing 11% of total revenue. Metabolic and other diseases revenue was RMB 2.2 billion (+67% YoY), also accounting for 11% of total revenue [3][8] - Key milestones include the approval of Aumolertinib for first-line treatment in January 2026, expected to be included in the National Reimbursement Drug List in 2027. The company also completed three overseas licensing deals with a total transaction value exceeding USD 4.54 billion [6][8] - In 2025, the company advanced 8 new innovative drug candidates into clinical development and initiated 7 pivotal Phase III registrational clinical trials [6][8]

Investment Rating - The report does not explicitly state an investment rating for Hansoh Pharma Core Insights - Hansoh Pharma achieved revenue of RMB 15.0 billion in FY25, representing a 23% year-over-year increase. Innovative drug revenue was RMB 10.2 billion (+30% YoY), while generic drug revenue was RMB 2.7 billion (-4% YoY). Collaboration revenue reached RMB 2.1 billion (+35% YoY) [1][4] - The proportion of innovative drug and collaboration income increased to 82% of total revenue, indicating a strong focus on innovative products [1][4] - The gross margin was 90.0%, down 1 percentage point year-over-year. R&D expenses were RMB 3.4 billion (+24% YoY), and selling expenses were RMB 4.1 billion (+7% YoY). The operating profit margin improved by 4 percentage points to 36% [5] - The net profit attributable to shareholders was RMB 5.56 billion (+27% YoY), aligning with expectations [5] Segment Analysis - Oncology revenue was RMB 10.0 billion (+23% YoY), accounting for 66% of total revenue [8] - Anti-infective revenue was RMB 1.6 billion (+8% YoY), making up 12% of total revenue [8] - Central nervous system (CNS) revenue was RMB 1.3 billion (-5% YoY), representing 11% of total revenue [8] - Revenue from metabolic and other diseases was RMB 2.2 billion (+67% YoY), also accounting for 11% of total revenue [8] Recent Milestones - In January 2026, Aumolertinib (Ameile) was approved for first-line treatment of patients with locally advanced or metastatic EGFR-mutant NSCLC, expected to be included in the National Reimbursement Drug List in 2027 [6] - Aumolertinib has been approved for first-line treatment in the UK and EU, with commercialization rights granted to Glenmark in selected countries [6] - In 2025, the company completed three overseas licensing deals with a total transaction value exceeding USD 4.54 billion, enhancing its international presence [6] - The company advanced 8 new innovative drug candidates into clinical development and initiated 7 pivotal Phase III registrational clinical trials [6] - GSK, a partner, has initiated registrational Phase III clinical trials for B7-H3 ADC in SCLC and osteosarcoma, with plans for additional trials in 2026 [6]

Investment Rating - The report maintains an "Outperform" rating for the pharmaceutical and biotechnology industry [3] Core Insights - The pharmaceutical excipients industry is entering a mature phase, with a focus on leading companies in pharmaceutical excipients [9] - The report highlights the increasing specialization and scale of the pharmaceutical excipients industry in China, driven by improved regulatory and standard systems [9][36] - The demand for plant-based capsules is expected to grow significantly, particularly in the Chinese market, with projections indicating a market size of approximately 423.7 billion yuan by 2027 [39] Summary by Sections Market Review - The pharmaceutical biotechnology index rose by 0.5% this week, underperforming the CSI 300 index by 0.58 percentage points, ranking 25th in industry performance [14] - Year-to-date, the pharmaceutical biotechnology index has increased by 2.96%, outperforming the CSI 300 index by 1.21 percentage points, ranking 24th [14] Sub-industry Performance - Among sub-industries, biological products increased by 2.56%, medical devices by 2.16%, and pharmaceutical commerce by 1.13%, while chemical pharmaceuticals and medical services decreased by 0.64% and 0.99%, respectively [21] - The medical services sub-sector has shown the highest growth at 9.4% year-to-date, while chemical pharmaceuticals have the lowest growth with a decline of 1.65% [21] Key Company Announcements - Aibo Medical plans to acquire 68.31% of the shares of Demei Medical for approximately 6.83 billion yuan, with performance commitments set for the next three years [33] - GSK's new oral targeted drug, Linerixibat, has been accepted for market registration in China, aimed at treating primary biliary cholangitis [33] - Hansoh Pharmaceutical's new lung cancer drug, Amivantamab, has been approved for sale in the EU [34] Industry Trends - The report emphasizes the importance of pharmaceutical excipients in drug formulation and their impact on drug efficacy and manufacturing processes [36] - The new version of the Chinese Pharmacopoeia, effective from October 1, 2025, will enhance the quality of domestic pharmaceutical excipients and improve their competitiveness in international markets [36] - The market for plant-based capsules is expected to expand significantly, driven by the growth of the health supplement industry and the demand for high-quality pharmaceutical excipients [39]

Group 1 - The Hong Kong stock market's innovative drug sector is performing well, with the Hong Kong Stock Connect Innovative Drug ETF (159570) rising by 0.56% and achieving a trading volume exceeding 700 million CNY [1] - Over the past 10 days, the ETF has attracted over 360 million CNY in capital, with its latest scale surpassing 25 billion CNY, leading its peers significantly [1] - Key stocks within the ETF, such as Federated Pharmaceutical and Rongchang Biopharmaceutical, have shown notable gains, with Federated Pharmaceutical increasing by over 6% [1][2] Group 2 - The innovative drug business development (BD) is focused on unmet clinical needs, technological differentiation, and global value, with significant transactions in oncology and metabolic disease sectors [3][4] - In oncology, notable advancements include Rongchang Biopharmaceutical's PD-1/VEGF dual antibody RC148, which received a substantial upfront payment of 650 million USD from a partnership with Aibowei [3] - The metabolic disease sector is highlighted by Shiyao Group's GLP-1 receptor agonist SYH2082, which secured a 1.2 billion USD upfront payment from AstraZeneca [3] Group 3 - The mRNA vaccine sector is experiencing rapid approvals, with several domestic products receiving IND approvals, indicating a swift advancement in local innovation [5] - The FDA has relaxed its drug review policies, allowing for a single key clinical trial to suffice for new drug approvals, which is expected to significantly reduce development timelines and costs [6] - New drug approvals include Hansoh Pharmaceutical's lung cancer drug "Amatinib," which has been granted marketing authorization in the EU for specific NSCLC patient populations [6]

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the innovative pharmaceutical sector, highlighting recent developments and regulatory approvals for various companies in the industry. Company-Specific Developments 恒瑞医药 (Hengrui Medicine) - On February 12, the CDE website indicated that the company submitted a marketing application for ANGPTL3 monoclonal antibody SHR-1918 targeting HOFH. The company has not yet disclosed the Phase III clinical results for SHR-1918 [1] 翰森制药 (Hansoh Pharmaceutical) - On February 20, the company announced that Amivantamab has been approved by the European Medicines Agency (EMA) for marketing in the EU for first-line treatment of EGFR19del or L858R NSCLC, as well as for T790M NSCLC treatment [2] 石药集团 (Shijiazhuang Yiling Pharmaceutical) - On February 16, the company announced that its receptor-biased GLP1/GIP agonist monthly formulation SYH2082 has been approved for clinical trials in the United States [3] 信立泰 (Sino Biopharmaceutical) - On February 12, the company disclosed its initial prospectus for a Hong Kong IPO, updating on R&D progress over the next 12 months, including the Phase II results for JK07 targeting HFrEF expected in 1H26, and the current pipeline status with SAL0147 AT1R/ETAR small molecule, SAL0167 PCSK9 oral cyclic peptide, and SAL012 GPC3 ADC anticipated to advance rapidly to clinical stages [4] 华东医药 (East China Pharmaceutical) - On February 12, the company announced that its self-developed FGFR2b ADC HDM2020 targeting GC/GEJ indications received orphan drug designation from the FDA in the United States [5] - On February 18, a clinical trial was registered for HDM1005 (GLP1R/GIPR weekly formulation) in a head-to-head study against Mars' dulaglutide for second-line diabetes patients in China [6] 康方生物 (CanSino Biologics) - On February 12, the company announced that its PD1*CTLA4 dual antibody cardunil combined with chemotherapy is undergoing a Phase III study for first-line gastric cancer [7] - On February 17, a clinical trial was registered for AK104 targeting MSI-H/dMMR colorectal cancer in perioperative treatment in China [8] 中国抗体 (China Antibody) - On February 20, the company disclosed preclinical data for IL17RB monoclonal antibody SM17 targeting CRSwNP and IPF in the journal ERJ OPEN RESEARCH [9] 基石药业 (CStone Pharmaceuticals) - On February 15, PR Newswire reported that the company's PD1*VEGF*CTLA4 tri-antibody CS2009 has received FDA approval to initiate a Phase II clinical trial in the United States targeting pan-solid tumors [10] 和铂医药 (HaploX) - On February 23, the company announced that it has licensed the rights for its next-generation CTLA4 monoclonal antibody HBM4003 (with significantly improved safety and expanded therapeutic window) to Solstice Oncology in Greater China. The company will receive a $50 million upfront payment, $50 million in equity, $5 million for recent milestones, and $1.1 billion in subsequent milestones and sales sharing [11]

Investment Rating - The report maintains an "Overweight" rating for the pharmaceutical and biotechnology sector [1]. Core Insights - The FDA has relaxed its innovative drug review policies, which is favorable for the innovative drug sector, significantly shortening development cycles and reducing costs [4][9]. - The A-share pharmaceutical index has shown a year-to-date increase of 2.4%, while the Hang Seng Biotechnology Index has risen by 12.5% [4][9]. - The report highlights a positive trend in mRNA vaccine technology, with significant advancements in both flu and cancer vaccines [16][23]. Summary by Sections Industry Trends - The A-share pharmaceutical index has underperformed slightly compared to the CSI 300, with a weekly decline of 0.8% and a year-to-date increase of 2.4% [4][9]. - The report notes that the medical services sector has shown resilience with a slight increase of 0.2%, while other sectors like traditional Chinese medicine and medical devices have seen declines [4][9]. mRNA Vaccine Developments - Moderna's mRNA-1010 flu vaccine has been resubmitted to the FDA and is expected to be commercially available for the 2026-2027 flu season, marking a significant regulatory turnaround [16][18]. - The report emphasizes the milestone achieved in mRNA cancer vaccines, with several domestic products receiving IND approvals, indicating a rapid advancement in this field [23][26]. R&D Progress and Company Dynamics - The report lists several companies with promising pipelines, including Hansoh Pharmaceutical's lung cancer drug approved in the EU and various clinical trials initiated by domestic firms [4][9]. - Specific companies to watch include WuXi AppTec, Haoyuan Pharmaceutical, and others in the innovative drug and CXO sectors [12][10]. Market Performance - The report provides a detailed overview of stock performance, highlighting top gainers and losers in the A-share market, with notable increases in companies like Aidi Tech and ZhenDe Medical [4][9]. - The report also tracks the price-to-earnings ratio of the pharmaceutical index, currently at 37.01 times, which is higher than historical averages [4][9].

Group 1: Market Overview - The A-share market is experiencing a wide range of fluctuations, with a focus on price-increasing sectors and export industry chains [6][9] - As of February 13, 2026, the major indices showed declines: the Shanghai Composite Index fell by 1.26% to 4082.07 points, and the ChiNext Index dropped by 1.57% to 3275.96 points [6][7] - The overall market sentiment is cautious, with expectations of a gradual return to intrinsic market dynamics as the National People's Congress approaches [6][8] Group 2: Industry Dynamics - Hansoh Pharmaceutical's (3692.HK) Amivantamab has been approved for marketing in the EU for specific types of lung cancer [27] - The world's largest offshore wind farm, Hornsea 3, is set to begin construction, with significant logistical preparations already underway [29] - The CWEA reported that China's wind power installation capacity is expected to grow significantly, with a 49.9% year-on-year increase anticipated for 2025 [31] Group 3: Company Updates - Dongfang Cable (603606.SH) has successfully shipped a large-scale underwater cable to the UK, valued at over 900 million RMB, for use in multiple offshore wind projects [37] - The actual controller of Youkeshu (300209.SZ) plans to increase his stake in the company, reflecting confidence in its business recovery [39] - The electric motorcycle industry is seeing accelerated growth due to new policies and market demand, with over 12.5 million units expected to be replaced under the "old for new" subsidy program in 2025 [33]

Investment Rating - The report maintains a "Buy" rating for the company with a target price adjusted to HKD 42.10 [4][7]. Core Insights - The company's product sales revenue is expected to continue growing rapidly, driven by the successful launch of key innovative drugs in the oncology and liver disease sectors [1][3]. - Increased promotional efforts are anticipated, particularly with the upcoming launch of the drug Amivantamab in the UK, which may lead to higher sales expenses [2]. - Long-term revenue from licensing agreements is expected to increase, particularly from a deal with Glenmark Specialty for the commercialization of Amivantamab in various regions [3]. Financial Summary - Revenue projections for the company are as follows: - 2023: RMB 10,104 million - 2024: RMB 12,261 million (21.3% growth) - 2025E: RMB 15,426 million (25.8% growth) - 2026E: RMB 15,600 million (1.1% growth) - 2027E: RMB 17,644 million (13.1% growth) [6][12] - Shareholder net profit estimates are: - 2023: RMB 3,278 million - 2024: RMB 4,372 million (33.4% growth) - 2025E: RMB 5,434 million (24.3% growth) - 2026E: RMB 4,739 million (-12.8% decline) - 2027E: RMB 5,828 million (23.0% growth) [6][12]. - The company’s earnings per share (EPS) are projected to be: - 2023: RMB 0.55 - 2024: RMB 0.74 - 2025E: RMB 0.92 - 2026E: RMB 0.79 - 2027E: RMB 0.98 [6][12]. Target Price and Valuation - The target price has been adjusted to HKD 42.10 based on a discounted cash flow (DCF) model, reflecting the company's growth potential despite an upward revision in sales expense forecasts [4][7].

Investment Rating - The report maintains a "Buy" rating for the company with a target price adjusted to HKD 42.10 [4][7]. Core Insights - The company's product sales revenue is expected to continue growing rapidly, driven by the successful launch of key innovative drugs in the oncology and liver disease sectors [1][3]. - Increased promotional efforts are anticipated, particularly with the upcoming launch of the drug Amivantamab in the UK, which may lead to higher sales expenses [2]. - Long-term revenue from licensing agreements is expected to increase, particularly from a deal with Glenmark Specialty for the commercialization of Amivantamab in various regions [3]. Financial Summary - Revenue projections for the company are as follows: - 2023: RMB 10,104 million - 2024: RMB 12,261 million (growth rate of 21.3%) - 2025E: RMB 15,426 million (growth rate of 25.8%) - 2026E: RMB 15,600 million (growth rate of 1.1%) - 2027E: RMB 17,644 million (growth rate of 13.1%) [6][12] - Shareholder net profit estimates are: - 2023: RMB 3,278 million - 2024: RMB 4,372 million (growth rate of 33.4%) - 2025E: RMB 5,434 million (growth rate of 24.3%) - 2026E: RMB 4,739 million (decline of 12.8%) - 2027E: RMB 5,828 million (growth rate of 23.0%) [6][12] - The company’s earnings per share (EPS) projections are: - 2023: RMB 0.55 - 2024: RMB 0.74 - 2025E: RMB 0.92 - 2026E: RMB 0.79 - 2027E: RMB 0.98 [6][12] Target Price and Valuation - The target price has been adjusted to HKD 42.10 based on a discounted cash flow (DCF) model, reflecting a potential upside from the current price of HKD 36.62 [4][7].