BOC International: Raising the target price of Rongchang Biotech (09995) to HK$103 to maintain a “buy” rating

The Zhitong Finance App learned that BOC International released a research report saying that research and development of the core product of Rongchang Biotech (09995) at home and abroad is progressing smoothly, and that the domestic phase III study on the use of Taitaxip to treat dry syndrome has reached the main end. The second half of the year will submit a marketing application and release the data. Taking into account Taitaxip's authorization, the bank lowered Rongchang Biotech's 2027 revenue forecast, but raised its net profit forecast and raised the target price to HK$103, maintaining a “buy” rating.

BOC International believes that Rongchang Biotech's product sales grew strongly in the second quarter, with revenue up 47.6% year on year, gross margin up 7.3 percentage points to 84.4% over the same period last year, and recorded a loss of 195 million yuan, which narrowed year-on-year and quarterly. The management maintains a guideline of product sales growth of at least 30% for the whole year. The goal is to achieve balance of payments next year, and it is expected that profit can be achieved after excluding BD by 2027.