Highlights

• Following a robust revenue growth of over 50% yoy to Rmb3.8b in 1Q26, our channel check indicates Innovent’s 2Q26 product sales remained strong, supported by its rapid market expansion of chronic disease products.  
   
• Innovent has achieved three major out-licensing deals, bringing total upfront income to US$2.2b. Expecting smooth progress of these collaborations, we believe the out-licensing income will become a steady revenue stream for the company in the years ahead. 
   
• Maintain BUY and target price of HK$112.00.
   

Analysis

• Channel check: 2Q26 product sales growth remained strong. Innovent Biologics Inc (Innovent) experienced robust domestic sales growth of over 50% to reach Rmb3.8b in 1Q26. Our channel check indicates that product sales growth remained strong in 2Q26, driven by rapid market expansion of its chronic disease products, namely Mazdutide, SINTBILO (Tafolecinmab injection), and SYCUME (Teprotumumab N01 injection). Moreover, the oncology products also generated steady growth, supported by the rapid commercial uptake of the five tyrosine kinase inhibitor (TKI) therapies newly included in the National Reimbursement Drug List (NRDL).  
   
• Licensing revenue becomes a major revenue contributor. Innovent has closed three out-licensing deals totalling US$2.2b in upfront payments. The Takeda and Eli Lilly upfronts were received in late-25 and 1H26, respectively, with the Pfizer payment expected in 3Q26. As the Eli Lilly and Pfizer collaborations are still at an early stage, Innovent will amortise these proceeds over 7-8 years, generating US$200m-300m in annual licensing revenue over the medium to long term. We forecast total revenue rising 45.9% yoy and net earnings increasing 31.5% yoy in 1H26, given the relatively high earnings base in 1H25.