BOC International raised Hanson Pharmaceuticals (03692) 2024-25E revenue forecast by 7%-14%.
The Zhitong Finance App learned that BOC International released a research report stating that it maintained the “neutral” rating of Hanson Pharmaceuticals (03692) and raised the 2024-25E revenue forecast by 7%-14% to reflect more optimistic revenue forecasts and down payment revenue from the second GSK Authorized Cooperation Agreement. The target price is HK$16. The bank is optimistic about the company's long-term growth prospects, but considering that key generic drugs and innovative drugs still face competitive pressure and a relatively limited potential share price increase (7.5%), the rating is neutral.
The report's main points are as follows:
FY23 exceeded expectations, and FY24 product sales growth is expected to return to double digits:
Revenue increased 7.7% year over year to 10.104 billion yuan, of which revenue from innovative drugs and cooperative products increased by 37.1%, accounting for 67.9% of total revenue (vs. 53.4% in 2022); GSK authorized cooperative down payment confirmed revenue of about 600 million yuan, accounting for about 62% of revenue after exclusion of innovative drugs. Net profit increased 26.9% to 3.278 billion yuan, exceeding the bank's and market expectations, mainly due to: 1) gross profit margin of 89.8% (-1.0 percentage point year over year) slightly exceeding expectations; 2) a sharp increase in bank income such as interest and investment income. The R&D/sales expenses ratio was +2.8/-2.9 percentage points to 20.8%/34.9%, respectively. The annual payout ratio is 36% (vs. 23% in 2022). 2024 guidelines: The revenue growth rate of products without BD has reached double digits, and innovative drugs account for more than 70% of revenue. Capital expenditure will double from last year's 200 million yuan to invest in R&D headquarters construction.
Key varieties are being released at a strong pace:
Among the main treatment areas, cancer, metabolism and other sectors performed well, with income +11.7%/+16.3% respectively. In the oncology sector, Amelot recorded sales growth of nearly 20% in 2023. Despite the price reduction of more than 40% in health insurance negotiations, sales doubled after 1LNSCLC indications were covered. As the impact of the price reduction in 2024 is basically cleared, the company expects annual sales to increase by more than 20% and maintain the 2026 sales target of 6 billion yuan. Revenue from the anti-infective and CNS segments was +1.6%/-8.5% respectively, with sales of Hengmu (amitenofovir) increasing by more than 40%.
2024 R&D Focus - Amelco, ADC, GLP-1 Dual Targets:
1) Adjuvant indications after amirac surgery are expected to be submitted in 3q24, 1LNSCLC layout with amirach+ chemotherapy (phase III in progress) and EGFR/c-Met dual antibodies (phase III next year); 2) B7H3 and B7H4 ADC will have further data reading this year/early next year; 3) GLP-1/GIP dual-target drugs will begin phase III weight loss by the end of the year.