BOCOM INTL: Raise target price of Jiangsu Hengrui Pharmaceuticals (01276) to HK$74. First quarter performance continues high growth trend.

BOCOM INTL released a research report stating that Jiangsu Hengrui Pharmaceuticals (01276) continued its high growth trend from last year in the first quarter, with rapid growth in innovative drugs, especially non-tumor products, accounting for over 60% of overall product sales. The company's innovative transformation has been successful. The company continues to efficiently advance its research and development, with positive progress in multiple pipelines. The ADC data readout at the ASCO conference is highly anticipated. Based on its first-quarter performance, BOCOM INTL has raised its profit margin forecast for Jiangsu Hengrui Pharmaceuticals for the years 2026 to 2028, raising its net profit forecast by 3% to 4%. The company believes the current valuation is reasonable and has raised the target price to 74 Hong Kong dollars, maintaining a "neutral" rating. The report points out that Jiangsu Hengrui Pharmaceuticals' first-quarter revenue and non-GAAP net profit increased by 13% and 17% respectively, slightly surpassing the bank's previous expectations. Sales revenue from innovative drugs grew by 26% year-on-year, with the proportion of total product sales rising to over 60% (61.7%). Non-tumor products performed well, with sales revenue increasing by 92% year-on-year, benefiting from multiple products being approved for market launch, new medical insurance coverage, and accelerated hospital admission. First-quarter BD revenue was 787 million yuan, mainly from the first payment from the GSK collaboration (PDE3/4) and revenue recognized from another 11 assets based on research and development progress, with an expected total of 250 million USD from the 500 million USD first payment to be recognized for the full year.