Bank of China International: Maintaining Rongchang Biotech's (09995) “Buy” Rating and Lowering the Target Price to HK$114

The Zhitong Finance App learned that Bank of China International released a research report stating that maintaining Rongchang Biotech's (09995) “buy” rating, the long-term value of verdicitumab was lowered due to intense competition, and the sales contribution of RC28 was delayed. However, these negative effects were partially offset by Taitacip's faster sales growth, lower sales expenses, and R&D cost forecasts. The bank lowered Rongchang Biotech's target price from HK$127 to HK$114.

The company's revenue in the first half of the year increased 436% year on year, with drug sales revenue up 23% year on year. The cooperative revenue from AbbVie was RMB 4.462 billion, which is in line with the overall expectations of this reservation. During the period, the sales expense ratio decreased by about 7 percentage points to 41% year on year. Excluding BD-related revenue/costs and changes in fair value of warrants, the company recorded a loss of RMB 26 million and achieved core business profit for the first time in a single quarter in the second quarter.