CITIC International raised the target price of CSPC PHARMA to 13.93 yuan, expecting BD transactions to support profits and dividends

Zhao Yin International Research Report indicates that CSPC PHARMA (01093.HK) has signed a strategic research and development cooperation and licensing agreement with AstraZeneca (AZN.US) to develop innovative long-acting peptide drugs. CSPC will receive a $1.2 billion upfront payment, as well as potential milestone payments of up to $17.3 billion.

The report states that CSPC has signed six business development (BD) agreements since the end of 2024, and the company has established a pipeline that includes multiple late-stage or differentiated candidate drugs, which have high potential for external licensing. Meanwhile, the company's sales slightly rebounded in the third quarter of last year, with core revenue excluding licensing income recovering and increasing by 4.2% quarter-on-quarter, while major products also showed slight improvement quarter-on-quarter; it is expected that pharmaceutical sales will stabilize this year.

The report believes that BD transactions will become a continuous driving force for the company's profit growth and support dividend payments; it maintains a "Buy" rating, raising the target price from HKD 11.05 to HKD 13.93