2025-10-27 00:52Summary of Jiangsu Hengrui Conference Call Company Overview - Company: Jiangsu Hengrui (1276.HK) - Industry: Biopharmaceuticals Key Points Financial Performance - 3Q25 Product Sales Growth: Estimated to be in the low-teens percentage range year-over-year, with single-digit growth quarter-over-quarter compared to 2Q25 [4][9] - Net Profit Growth: Expected to show low-teens percentage growth in 3Q25, with a significant increase in net profits projected at RMB 8,546 million, a 34.9% year-over-year increase [12] - Revenue Estimates: Projected revenue for FY25 is RMB 32,121 million, reflecting a 14.8% year-over-year growth [12] Business Development (BD) Outlook - BD Income: Anticipated to include a €15 million upfront payment from Merck for GnRH and a portion of the US$500 million upfront payment from GSK related to PDE3/4 [4][9] - Collaboration Revenue: Expected to grow significantly, with estimates of RMB 3,741 million for FY25, a 38.5% increase year-over-year [12] Oncology Portfolio Strength - ESMO 2025 Highlights: Hengrui showcased 46 oncology projects, with SHR-A1811 (HER2 ADC) demonstrating significant progression-free survival (PFS) improvement in advanced HER2+ breast cancer [5][14] - SHR-A1811 Results: Reported median PFS of 30.6 months compared to 8.3 months for the control group, with a competitive profile against Enhertu [15][16] Market Position and Valuation - Valuation Metrics: Hengrui A and H shares are trading at 42x and 45x 2026 estimated EPS, with a projected EPS CAGR of 25% from 2024 to 2027 [6] - Price Target: Set at HK$86.00, indicating a 13% upside from the current price of HK$76.30 [7] Upcoming Catalysts - Key Events: NRDL negotiation in October-November, Phase 3 readout for HRS9531 (GLP-1/GIP injectable) at Obesity Week, and potential new BD deals [6][9] Risks and Considerations - Upside Risks: More-than-expected out-licensing deals and faster-than-expected drug sales growth [25] - Downside Risks: Potential setbacks in pipeline progress and adverse impacts from VBP on specific drugs [25] Additional Insights - Pipeline Depth: Hengrui's pipeline is noted for its depth and breadth, which supports its premium valuation compared to Chinese biopharma peers [6] - Market Cap: Current market capitalization is approximately RMB 435.74 billion [7] This summary encapsulates the critical insights from the conference call, focusing on Jiangsu Hengrui's financial performance, business development outlook, oncology portfolio strength, market position, upcoming catalysts, and associated risks.