Near-term readouts to validate novel pipeline assets

BeOne Medicines (ONC US) Near-term readoutstovalidate novel pipeline assets Target PriceUS$392.43Up/Downside25.2%Current PriceUS$313.32 BeOne delivered robust 1Q26 productsalesgrowth and improving profitability,prompting management to raise FY26 guidance. Wecontinue to seesignificantupside for Brukinsa's global BTK market share expansion. Furthermore, multiplenear-term clinical data readouts present compelling catalysts for furthervaluation upside. WemaintainBUY rating on BeOne with aTP ofUS$392.43. China Healthcare Strong 1Q26salesmomentum.BeOne reported 1Q26 total revenue ofUS$1.51bn (+35% YoY),representing28% of our previous FY26 estimateand exceeding our expectations. Thisrobust growth was primarily driven byBrukinsa, which generated US$1.10bn in 1Q26 sales (+38% YoY). Brukinsaretains its position as the top-selling global BTK inhibitor by revenue,underpinnedby its leadership in new patient starts for US CLL andsustainedEUexpansion fueled byimprovingreimbursement coverage. Weanticipate continued market share gainsof Brukinsa andproject FY26EBrukinsa sales of US$4.67bn (+19% YoY). Jill WU, CFA(852) 3900 0842jillwu@cmbi.com.hk Andy WANG(852) 3657 6288andywang@cmbi.com.hk Stock Data Profitabilitycontinues to improve.BeOne sustained its profitabilitytrajectory in1Q26, delivering GAAP net income of US$277mn, underpinnedby robust top-line growth and enhanced operating leverage. Non-GAAP netincomehas demonstrated consecutive quarter-over-quarter expansionsince1Q25,reaching US$414mn in 1Q26.Operating efficiency alsostrengthened: the SG&A-to-sales ratio declined to 37.3% (vs. 39.4% inFY25), and the R&D-to-sales ratio moderated to 36.4% (vs. 40.6% in FY25).Prompted by this strong 1Q26 performance, management raised its FY26revenueguidance to US$6.3–6.5bn(from US$6.2–6.4bn)and GAAPoperating profit guidance to US$750–850mn (from US$700–800mn). Continued enhancement of the hematology franchise.Sonrotoclax (Bcl-2) is positioned for potential FDA approval in 2Q26 for BTKi-treated MCL,following itslaunchinChina. BeOne also plans to advance Sonrotoclax intoa Ph3 study for 2L+ t(11;14) MM in 2H26. Furthermore, we anticipate uMRDdata from the Ph3 Sonrotoclax + Brukinsa trial in 1L CLL in 3Q26, as nearlyall patients have recently completed the fixed-durationtreatment. We alsoexpect a US NDA submission for the BTK CDAC in R/R CLL in 2H26. Multiple near-term solid tumor catalysts. Wethink multipleupcomingclinical milestones could unlock further valuation upside. Ph1 data for BGB-43395(CDK4 inhibitor)in 1L HR+/HER2-breast cancer(BC)at theupcoming ASCO meeting should drive near-term sentiment. As a potentiallybest-in-class CDK4-selective agent with a differentiated hematologicaltoxicity profile, BGB-43395 is slated for a global Ph3 trial in 1L BC.Additionally, 1H26 will feature ASCO data readouts for the GPC3/4-1BBbsAb and B7-H4 ADC, followed by clinical updates for the PRMT5i and CEAADC in 2H26. The GPC3/4-1BB bsAb is currently enrolling a potentialpivotal study in late-line HCC, alongsidetheongoingstudyin 1L HCC.ThePD-1/VEGF-A/CTLA-4 tsAb isalsoexpected to enter a Ph1 study shortly. Source: FactSet MaintainBUY.We expect BeOne to deliver robust FY26 sales growth andprofitability, further supported by a catalyst-rich R&D pipeline.WemaintainourDCF-derivedtarget priceunchangedatUS$392.43(WACC: 9.64%,terminal growth rate: 3.5%).Earnings Summary Source:Company data, CMBIGM Source:Company data, CMBIGM Source:Company data, CMBIGM Disclosures& Disclaimers AnalystCertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith 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, theanalyst confirms that neither the analyst nor 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 the date 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 thisreport; 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 months: Stock with potential return of +15% to-10% overnext 12 months: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM HOLDSELL :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expecte