CICC: Maintaining Hewang Pharmaceuticals (00013) Outperforms the Industry Rating Target Price of HK$30
The Zhitong Finance App learned that CICC released a research report saying that considering Hewang Pharmaceutical (00013)'s domestic product sales trend, the 2025 revenue forecast was lowered by 12.4% to 594 million US dollars, and the net profit returned to mother in 2026 was reduced by 65% to US$35 million. However, considering the pace of confirmation of the proceeds from the sale of shares, the bank basically kept the net profit forecast of US$366 million unchanged for 2025. The bank maintained an outperforming industry rating. Considering that the company's innovation pipeline is progressing smoothly, based on the DCF model, the target price of HK$30 remains unchanged, with 24.7% upside compared to the current stock price.
CICC's main views are as follows:
1H25 performance falls short of expectations
The company announced 1H25 results: revenue of US$278 million, -9% year-on-year, lower than expected, mainly due to lower domestic product sales than expected; net profit of US$455 million, mainly due to sales of non-core business shares. The comprehensive revenue of 1H25's oncology immunization business was US$144 million, -15% year over year. The company lowered its comprehensive revenue guide for the annual oncology immunization business from US$35—450 million to US$27—350 million.
Overseas distribution of fruquintinib is going well, and domestic product release is under pressure
1H25's overseas sales of furoquintinib were US$163 million, +25% year over year, maintaining steady growth. According to the company announcement, as of 1H25, fruquintinib has been approved for marketing in more than 30 countries and regions, further expanding medical insurance reimbursement coverage and increasing market share. 1H25's domestic revenue of fruquintinib, sevotinib and surufatinib declined year-on-year, mainly due to sales restructuring and changes in the competitive landscape. The bank believes that the company's product sales revenue trend is expected to improve in the second half of the year, thanks to the approval of new indications of sevotinib and the smooth release of fruquintinib overseas.
ATTC is expected to enter clinical trials in the second half of the year
According to the company's announcement, the company's antibody-targeted conjugate drug (ATTC) candidate HMPL-A251 has received good conceptual verification in pre-clinical models and has shown the potential for treating earlier-line tumors in combination with chemotherapy. The company plans to launch phase 1 clinical research in China and the US at 2H25, and the other two drug candidates, HMPL-A580 and HMPL-A830, will start phase 1 clinical studies in 2026. It is recommended to focus on clinical verification of this next-generation technology platform.
Other R&D developments
According to the company's announcement, the company expects 2H25 to complete SAFFRON enrollment, 1H26 to read data, and 2H25 to complete SANOVO enrollment; solepinib plans to re-submit a marketing application in China at 1H26; and surufatinib will read data on first-line pancreatic duct adenocarcinoma in 2H25.
Risk warning: R&D has failed, the competitive landscape has deteriorated, the review and approval falls short of expectations, and the cost exceeds expectations.