UBS lowers Zai Lab's target price to 20.1 yuan, reiterates "Buy"

UBS published a research report stating that although Zai Lab (09688.HK) faces several adverse factors affecting its recent performance, it remains optimistic about its long-term growth potential and promising product line; despite its stock price having fallen approximately 27% since November 6, it believes the company's risk-reward ratio is attractive, as the development and business expansion potential of its key assets (such as Zoci (DLL3 ADC) and ZL-1503 (IL13/IL31R)) have not yet been reflected in the stock price.

UBS expects that several catalysts for Zai Lab's assets will help drive the company's recovery starting in the first half of next year; it reiterates a "Buy" rating, with a target price reduced from HKD 33.5 to HKD 20.1.

UBS noted that investors are disappointed with the recent adverse factors affecting Zai Lab, but believes that these factors have largely been reflected in the stock price. It also believes that the third-quarter performance this year, which did not meet expectations, has impacted market sentiment; the stock price performance reflects market concerns about its ability to commercialize in an increasingly competitive environment. However, UBS believes that the company can maintain robust sales growth through increasing market penetration and the launch of more new products