BOCOM International Cuts HENGRUI PHARMA TP to HKD57, Lowers Earnings Forecasts; Valuation Reasonable, Rated Neutral
I'm LongbridgeAI, I can summarize articles.BOCOM International cut Hengrui Pharma's target price to HKD57 and lowered 2026-2028 net profit forecasts by 10%-15%, maintaining a Neutral rating. The firm cited pressure on existing business in H1, with generic drug revenue falling 16% due to centralized procurement, while innovative drugs grew 16%. Despite adjusted net profit dropping 12.7%, the broker views current valuation as reasonable.
BOCOM International issued a report saying that HENGRUI PHARMA (01276.HK) -0.040 (-0.086%) Short selling $21.91M; Ratio 11.012% 's existing business came under pressure in the first half, while innovative drugs maintained solid growth. The company's revenue for the first half fell 2% YoY to RMB15.46 billion, of which product sales rose 2%. Revenue from innovative drugs increased 16% YoY, accounting for 63% of total pharmaceutical sales. Among them, sales revenue from non-oncology innovative drugs surged 74% YoY, while oncology innovative drugs grew 2.6%, with slower growth mainly due to intensified competition for mature products or pressure from price cuts under centralized procurement by competing products. Revenue from generic drugs declined 16% YoY, mainly affected by local centralized procurement of major existing products. Adjusted attributable net profit excluding non-recurring items fell 12.7% YoY to RMB3.73 billion.
Mid- to late-stage pipelines and early-stage differentiated platforms are jointly driving the realization of R&D value. From 2H26 to 2027, investors should focus on data readouts for multiple ADC and cardiovascular products, while several oncology, immunology and cardiovascular innovative projects are set to enter global Phase III development. In the long run, the company has entered a new stage driven by global innovation, AI and cutting-edge technologies, with annual R&D investment maintained at 25% to 30% of revenue over the long term. Platforms in areas such as protein homeostasis regulation, bispecific/multispecific antibodies, and AFC targeting specific cells and tissues have been established.
BOCOM International lowered its 2026-2028 net profit forecasts by 10% to 15%. Based on discounted cash flow valuation, it cut the target prices for H shares and HENGRUI PHARMA (600276.SH) -0.390 (-0.834%) A shares to HKD57 and RMB54.6 respectively. The broker said current valuation is reasonable and maintained a Neutral rating.(da/a)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-25 12:25.) (A Shares quote is delayed for at least 15 mins.)