Accelerating global commercialization and innovation

Henlius Biotech (2696 HK) Accelerating global commercialization and innovation innovation Target PriceHK$99.78(Previous TPHK$97.75)Up/Downside52.0%Current PriceHK$65.65 Henlius delivered strong FY25 financial results, driven by robust product salesgrowth. TheCompany isexpanding its global biosimilar footprint and forging newinternational partnerships.Henlius is accelerating its evolution into an innovativebiologicspowerhouse,spearheaded by competitive assets such as HLX43,HLX22, and serplulimab. Anticipating multiple clinical and regulatory catalysts in2026, we maintain BUY rating on Henlius with a TP of HK$99.78. China Healthcare FY25product sales beat.Henlius reported FY25 total revenue ofRMB6.67bn (+16.5% YoY). Total product sales reached RMB5.77bn (+17.0%YoY),beating our previous full-year estimate of RMB5.35bn by ~7.9%,primarily driven by the continued ramp-up of serplulimab (PD-1,RMB1.50bn,+14.0% YoY). The foundational biosimilar franchise remained resilient, withtrastuzumab generating global sales of RMB2.97bn (+5.5% YoY).Overseasproduct sales reached around RMB260mn in FY25, +100% YoY. Henliusmaintainednet profitability(RMB827mn)while stepping up its R&Dinvestments to RMB2.49bn (+35.4% YoY) to fuel its next-generation pipeline. Jill WU, CFA(852) 3900 0842jillwu@cmbi.com.hk Andy WANG(852) 3657 6288andywang@cmbi.com.hk Stock Data HLX43 (PD-L1 ADC) entering pivotal stages.As a leading PD-L1 ADCglobally, HLX43 has demonstrated competitive early efficacy signals in IO-resistantNSCLC.Among heavily pre-treated NSCLC patients,HLX43delivered an ORR of 33.3% insq-NSCLC (n=33) and an impressive 47.4% inEGFRwild-type nsq-NSCLC (n=19), with PFS data expected in 2026.A globalPh2 trial in late-line NSCLC is actively enrolling across the US, China, Japan,andAustralia.Furthermore,Henlius has initiated a global Ph2/3 trialevaluating HLX43 +/-HLX07 (EGFR mAb) for IO-resistant sq-NSCLC (vsdocetaxel), with the Ph2 portion expected to complete enrollment in 4Q26.Weanticipate initiation of additional pivotal trials for HLX43 in NSCLC (includingEGFR wild-type IO-resistant nsq-NSCLC and EGFRm NSCLC) by 4Q26. Executing serplulimab's global commercialization and label expansion.The 1L ES-SCLC US bridging study completed enrollment in Oct 2025,targeting ESMO 2026 datareadoutand a 2026 US BLA submission. Forperioperative GC, Ph3 data is expected at ASCO (Jun 2026) alongside a mid-2026 China NDA approval.In 1L MSS CRC, following demonstrated PFS andOS improvements in a Ph2 trial (serplulimab + chemo + bevacizumab), a Ph3MRCT across China, Japan, and SEA fully enrolled in mid-2025, with dataexpected in 2027. The asset's value was further validated by anout-licensingdeal with Eisai(4523 JP, NR)about Japan rights in Feb, securing a US$75mnupfront payment. Source: FactSet HLX22 (HER2mAb)shows best-in-class efficacy in gastric cancer.HLX22 is emerging as a formidable alternative for 1L HER2+ GC. In a Ph2trial with a median follow-up of 28.5 months, the addition of HLX22 to thestandardof care(trastuzumab+chemotherapy)dramatically improvedefficacy. Median PFS wasnotreached in the HLX22 arm versus 8.3 monthsin theSoCarm, translating to an exceptionalhazardratio of 0.2. Henlius isadvancing a global Ph3 MRCT in 1L HER2+ GC across China, the US, Japan,and Europe, with data readouts expected in 1H27. Maintain BUY.Factoring in thestrong product sales beat in 2025,weslightlyrevise ourDCF-derivedtarget price to HK$99.78from HK$97.75(WACC:9.13%, terminal growth rate: 3.5%, both unchanged).EarningsSummary Disclosures& Disclaimers Analyst CertificationThe research analyst who isprimary responsible for the content of this research report, in whole or in part, certifies that with respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analystnor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to thedate of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potentialloss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevan