Huayuan Securities: Reiterates 'Buy' Rating for Hansoh Pharma (03692) as Innovative Pipeline Gradually Enters Harvest Period

According to Zhitong Finance, Huayuan Securities issued a research report stating that it expects Hansoh Pharma (03692) $HANSOH PHARMA (03692.HK)$ to achieve net profits attributable to shareholders of 6.41 billion, 7.26 billion, and 8.58 billion yuan for 2026-2028, with year-over-year growth rates of 15.4%, 13.2%, and 18.3% respectively, corresponding to price-to-earnings (PE) ratios of 33, 29, and 25 times. The company's performance is impressive, with its innovative pipeline gradually entering the harvest period, maintaining a 'Buy' rating.

Huayuan Securities' main viewpoints are as follows:

Event

Hansoh Pharma announced its 2025 annual report, with total revenue of 15.028 billion yuan, a year-on-year increase of 22.6%. Revenue from innovative drugs and collaborative products reached 12.354 billion yuan, a year-on-year increase of 30.4%, accounting for 82.2% of total revenue. Net profit was 5.555 billion yuan, a year-on-year increase of 27.1%.

Innovative products have become the core driver of performance growth

In 2025, Hansoh Pharma's total revenue was 15.028 billion yuan, of which revenue from innovative drugs and collaborative products reached 12.354 billion yuan, a year-on-year increase of 30.4%, accounting for 82.2% of total revenue. Innovative products have become the core driver of performance growth. In terms of sector breakdown: 1) Oncology revenue was 9.974 billion yuan, accounting for 66.4% of total revenue, with oncology remaining the core revenue sector; 2) Central nervous system revenue was 1.31 billion yuan, accounting for 8.7%; 3) Anti-infective revenue was 1.586 billion yuan, accounting for 10.6%; 4) Metabolic and other disease revenue was 2.158 billion yuan, accounting for 14.3%.

Core marketed products provide a solid foundation, while clinical pipelines are actively advancing, offering promising prospects for the future

Seven innovative drugs generated revenue in China, with 11 indications included in the National Reimbursement Drug List. Marketed products: 1) Aumolertinib: Three new indications were approved (two already included in the reimbursement list), receiving Level I/first-line recommendations from eight national treatment guidelines; 2) Flumatinib: Selected for recommendation by two national guidelines; 3) Inebilizumab: Two new indications approved. Clinical pipeline: 1) HS-20093: Phase III clinical trials for small cell lung cancer and osteosarcoma, with proof-of-concept studies underway for head and neck cancer, castration-resistant prostate cancer, and other solid tumors, recognized as a breakthrough therapy by the NMPA for three indications; 2) HS-20089: Phase III clinical trial for ovarian cancer, recognized as a breakthrough therapy by the NMPA; 3) HS-20094: Phase III clinical trials for type 2 diabetes, obesity, or overweight. Several other innovative products have advanced to clinical stages for the first time.

BD transactions are expected to provide recurring profits

Over the past three years, the company has completed more than five out-licensing deals, covering assets from preclinical to late-stage development, with a total transaction value exceeding 9 billion US dollars, providing potential for recurring profits. 1) HS-20094: Licensed to Regeneron in June 2025, with upfront and milestone payments totaling 2.01 billion US dollars; 2) HS-20110: Licensed to Roche in October 2025, with cumulative upfront and milestone payments exceeding 1.53 billion US dollars; 3) Aumolertinib: Licensed to Glenmark in December 2025, with cumulative upfront and milestone payments exceeding 1 billion US dollars.

Risk Warning:Risks include clinical development failure, worsening competitive landscape, and lower-than-expected sales, among others.

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