Robust sales growth and sustainable BD momentum

Hansoh Pharma (3692 HK) Robustsales growthandsustainableBD momentum Hansoh delivered strong FY25 results, with total revenue reaching RMB15.03bn(+22.6% YoY) and attributable net income ofRMB5.56bn (+27.1% YoY).Productsales grew 20.8%YoY to RMB12.91bn.Excluding collaborationrevenues,innovative drug sales surged 29.5%YoY to RMB10.24bn,successfully beating management’stargetofRMB10bn. Operating efficiencyimproved significantly as the SG&A-to-sales ratio fell to 36.7% (vs 42.2% inFY24). Concurrently, R&D investments rose 24.3% YoY to RMB3.36bn. Withnearly 20 Ph3trials planned or ongoing in 2026, we anticipate elevated R&Dspending, which should continue to fuel sustainable business development (BD)income.Thanks to thecontinuousR&Dinvestment, we believethe Company’sBD income will become sustainable in thefuture. We maintain ourBUYratingwith a target price ofHK$46.41. Target PriceHK$46.41(Previous TPHK$45.26)Up/Downside24.0%Current PriceHK$37.42 China Healthcare Jill WU, CFA(852) 3900 0842jillwu@cmbi.com.hk Andy WANG(852) 3657 6288andywang@cmbi.com.hk Sustainableglobal out-licensing.Hansoh recorded BD income ofRMB2.12bn in FY25, primarily driven by upfront and milestone paymentsfrom MSD and GSK. Since late 2023, the Company hassuccessfully out-licensed multiple assets—including B7-H3 and B7-H4 ADCs to GSK, an oralGLP-1 to MSD, a GLP-1/GIP to Regeneron, and a CDH17 ADC to Roche.Supported by a highly productive R&D engine, we view out-licensing as arecurring profit center. In FY25 alone, eightnew assets entered the clinic,including a BTK inhibitor, EGFR/c-Met ADC, and KRAS G12D inhibitor,ensuring continuous global BD optionality. Stock Data Innovative clinical pipeline advancing on track.Hansoh’skey late-stageassets are progressingrapidlyincollaborationwithitspartners. HS-20093(B7-H3 ADC) is advancing through global/ChinaPh3 trials for 2LSCLC anda China Ph3 for osteosarcoma, withdomestic BLAsexpected in 2026. AChinaPh3ofHS-20093 in pre-treated nsq-NSCLChasalsobeeninitiatedrecentlyby Hansoh. Furthermore, HS-20089 (B7-H4 ADC) entered Ph3 forovarian cancer in China, while partner GSK registered two global Ph3studiesin ovarian and endometrialcancers. In the metabolic space, MSDadvanced HS-10535 (oral GLP-1)into obesity trials, and HS-20094 (GLP-1/GIP)is ina Ph3 obesity trial in China alongside Regeneron's US Ph2study. Aumolertinibsales bolstered by indication expansion. We projectstrongcontinued growth for flagship asset aumolertinib,driven by 1LNSCLC market share gains and new regulatory approvals. In early 2026, itsecured twoadditional NRDL inclusions for adjuvant and maintenancetherapy in locally advanced EGFRm NSCLC, becoming the first domesticEGFR-TKI approved for these settings. Additionally, its combination withchemotherapyfor 1L NSCLC was approved in early 2026.Furthercommercial upside is supported by a Feb 2026 sNDA submission for acombo with c-Met inhibitor HS-10241 in 2L EGFRm NSCLC, alongsideongoing Ph3 evaluations with an EGFR/c-MetbsAbin 1L NSCLC. Source: FactSet Maintain BUY.We expect Hansoh’s revenue to grow11.1%/5.6%YoY inFY26E/27E, withnet profit toincrease by 3.6%/1.85over the same periods,respectively.Factoring in the strong product sales, weraiseour TPfromHK$45.26to HK$46.41(WACC: 8.13%, terminal growth rate:4.5%).Earnings Summary Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible forthe 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 analyst nor his/her associates (asdefined 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 potential loss of over 10% over next12 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 relevantbroad market benchmark over next 12 months:Industry expected to underperform the relevant broad market benchmark over next 12 months Ad