Company Coverage
Sino Biopharmaceutical (1177 HK): Innovation Continues To Fuel Growth
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$5.19
HK$7.20
+38.7%
HK$$7.70
Analyst
Analyst
Highlights
- Despite weak generics, Sino Biopharm's innovative drug revenue and out-licensing income will drive double-digit revenue growth in 1H26. 1H26 adjusted net earnings may fluctuate sharply due to the absence of aRmb1.35b special dividend from associate Sinovac LS in 1H25, while we still expect double-digit earnings growth for 2026.
- Backed by new in-licensed products and strong R&D, Sino Biopharm should
see steady revenue and earnings growth in 2027.
- Maintain BUY, with target price trimmed to HK$7.20 on generic drug policy
headwinds.
Analysis
- Licence fee income becomes new growth driver. Sino Biopharmaceutical (Sino Biopharm) has entered into two major out-licensing agreements. The collaboration with Sanofi and AstraZeneca on Rovadicitnib (a potential global first-in-class JAK/ROCK inhibitor) and TQC3721 (PDE3/4 inhibitor) respectively, will bring in a total upfront income of US$335m. According to management, the US$135m was received from Sanofi and will likely be recognised as revenue in 1H26, while approximately 90% of US$200m from AstraZeneca may be recognised at 2H26 revenue based on the progress of the collaborations. The out-licensing income will likely contribute to over 5% of total revenue in 2026.
Highlights
- Despite weak generics, Sino Biopharm's innovative drug revenue and out-licensing income will drive double-digit revenue growth in 1H26. 1H26 adjusted net earnings may fluctuate sharply due to the absence of aRmb1.35b special dividend from associate Sinovac LS in 1H25, while we still expect double-digit earnings growth for 2026.
- Backed by new in-licensed products and strong R&D, Sino Biopharm should
see steady revenue and earnings growth in 2027.
- Maintain BUY, with target price trimmed to HK$7.20 on generic drug policy
headwinds.
Analysis
- Licence fee income becomes new growth driver. Sino Biopharmaceutical (Sino Biopharm) has entered into two major out-licensing agreements. The collaboration with Sanofi and AstraZeneca on Rovadicitnib (a potential global first-in-class JAK/ROCK inhibitor) and TQC3721 (PDE3/4 inhibitor) respectively, will bring in a total upfront income of US$335m. According to management, the US$135m was received from Sanofi and will likely be recognised as revenue in 1H26, while approximately 90% of US$200m from AstraZeneca may be recognised at 2H26 revenue based on the progress of the collaborations. The out-licensing income will likely contribute to over 5% of total revenue in 2026.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$5.19
HK$7.20
+38.7%
HK$$7.70
Analyst
Analyst
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