Inaugural year of commercialization

Inaugural year of commercializationT Target PriceHK$507.11(Previous TPHK$498.55)Up/Downside20.5%Current PriceHK$421.00 Kelun-Biotech marks 2025 as its transformational commercialization inflectionyear, transitioning from a clinical-stage biotech to a biopharmaceutical companywith four approved products and a robust revenue trajectory. TheCompanyreported total revenue of RMB2.06bn (+6.5% YoY), with pharmaceutical productsales contributing RMB543mn—a testament to its nascent but rapidly scalingcommercial infrastructure. The strategic milestone of securing NRDL inclusionfor three core assets (Sac-TMT, A167, and A140) effective Jan 2026 establishesa solid foundation for volume growth in 2026.Despite the widened net loss ofRMB382.0mnin 2025(compared to RMB266.8mn in 2024)-a naturalconsequence of concurrent commercial scaling and late-stage clinical trialenrolment-theCompany’sfinancialposition remained strong.The CompanyheldRMB4.6bnincashand financial assetsas of end-2025,providing ampleliquidity to fund domestic commercialization andadvanceits pipeline. China Healthcare Jill WU, CFA(852) 39000842jillwu@cmbi.com.hk Andy WANG(852) 3657 6288andywang@cmbi.com.hk Strongproof-of-concept for sac-TMT 1L NSCLC with topline China Ph3results.The mostvalue-accretive clinicaldevelopmentin 2025 wasthesuccess of theChinaPh3 trial evaluating Sac-TMT plus pembrolizumab vs.pembrolizumab monotherapy in 1L PD-L1-positive (TPS≥1%) NSCLC. Thisstudy achieved its primary PFS endpoint, alongside a positive OS trend,with full-data expectedat theASCO meeting in June. This represents thefirstPh3 trial globally to demonstrate success for an ADC plus ICIcombination in the first-line NSCLC setting-a potential paradigm shift.While the OS endpoint remains the gold standard for successful FDAapprovals,sac-TMT is notably the leading TROP2 ADC globally todemonstratepositiveOS benefits across multiple indications, including 2LEGFRm NSCLC, 3L EGFRm NSCLC, 2L+ TNBC, and 2L+ HR+/HER2-BC.Meanwhile,the readout of AstraZenca’s AVANZAR study in 2H26evaluating Datroway (Dato-DXd)+ Durvalumab and Carboplatinin 1L wild-type NSCLC willlikelyserve as a critical catalyst for the broader TROP2ADC landscape. Stock Data Source: FactSet Sac-TMT is positioned forfast-trackFDA approval.In Jan 2026, Sac-TMT was granted a Commissioner's National Priority Voucher (CNPV) bythe FDA. This designation condenses the regulatory review cycle from thestandard 10-to-12 months down to an ultra-fast 1-to-2-month window fromthe application filing date. We expect MSD topotentiallysubmit the initialBLA forSac-TMT in 2026 for 2L+ endometrial cancer, paving the way for apotential approval in late 2026 or early 2027. To date,MSD has initiated 17global Ph3 trials spanning breast cancer (4trials), lung cancer (5trials),gynecological cancers (6trials), gastric cancer, and urothelial carcinoma.Given the success of the China Ph3 trial ofsac-TMT combined withpembrolizumab in 1L PD-L1-positive NSCLC, we believe MSDmay alsoevaluatethe combination potential of sac-TMT with its PD-1/VEGFbispecific in first-line settings. Source: FactSet Maintain BUY.Factoring in the additionalout-licensingoftheITGB6ADCto Crescent in late 2025, werevised our DCF-based TP from HK$498.55toHK$507.11(WACC: 8.69%, terminal growth rate: 3.5%,unchanged).Earnings Summary Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this researchreport, 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 analyst nor his/her associates (as defined in the code ofconduct 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 coveredin 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 potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expected to perform in-line with the relevant broad marketbenchmark over next 12 months:Industry expected to underperform the relevant broad market benchmark over ne