20260424-招银国际-诺诚健华-09969.HK-Autoimmune_and_oncology_pipelines_set_stage_for_long-term_dual-engine_growth_6页_1mb

InnoCare Pharma (9969 HK) Summary

Core Content and Overview

InnoCare Pharma has demonstrated strong commercial performance in 2025 and continued this momentum into 1Q26, with total product sales reaching RMB1.44bn and a 43.4% YoY increase. In 1Q26, product sales were RMB450mn, marking a 44.5% YoY growth and a 4.2% QoQ increase, alongside a net profit of RMB100mn. The company's growth is expected to continue, primarily due to the inclusion of orelabrutinib in the NRDL for 1L CLL/SLL starting in January 2026. Management has guided for at least a 30% YoY increase in orelabrutinib sales in FY26.

Key Assets and Pipelines

• Orelabrutinib:

  • Already commercialized in oncology.
  • NDA submission for primary immune thrombocytopenia (ITP) is upcoming, which will open its commercialization in the autoimmune market.
  • Phase 3 trials for systemic lupus erythematosus (SLE) are ongoing.
  • ZBIO is advancing Phase 3 trials for primary progressive multiple sclerosis (PPMS) and secondary progressive multiple sclerosis (SPMS), targeting large unmet medical needs and multi-billion-dollar markets.

• Mesutoclax (Bcl-2 inhibitor):

  • Shows improved safety and strong potency.
  • Targeted to initiate Phase 3 trial in 1L AML.
  • Being explored for MDS globally.
  • Competitor venetoclax has failed in MDS, presenting a favorable competitive landscape for mesutoclax.

• TYK2/JAK1 inhibitor ICP-332:

  • Released highly competitive Phase 2 data in atopic dermatitis (AD).
  • Phase 3 data expected in mid-2026.
  • Being explored for multiple high-potential autoimmune indications, including vitiligo, chronic spontaneous urticaria (CSU), and prurigo nodularis (PN).

Business Development (BD)

• In 2025, InnoCare out-licensed two major assets:
  • Orelabrutinib to Zenas BioPharma (ZBIO US, NR).
  • CD3xCD20 bsAb (ICP-B02) to Prolium.
• These strategic BD moves, combined with robust sales, have strengthened the company's balance sheet, resulting in a cash balance of RMB7.92bn at the end of 1Q26.

Financial Highlights

Year	Revenue (RMB mn)	Net Profit (RMB mn)	EPS (RMB)
FY24A	1,009	-440.6	-0.26
FY25A	2,375	643.0	0.38
FY26E	2,592	225.4	0.13
FY27E	3,063	281.1	0.16
FY28E	3,936	598.8	0.34

Valuation and Target Price

• Target Price (TP): HK$18.31 (up from previous TP of HK$11.95).
• DCF Valuation (RMB mn):
  • 2026E: 20,260
  • 2027E: 25,770
  • 2028E: 35,596
• Terminal Growth Rate: 2.00%
• WACC: 10.73%
• Equity Beta: 1.10
• Risk-Free Rate: 2.50%
• Market Risk Premium: 10.50%

Shareholding and Stock Performance

• Shareholding Structure:

  • Hillhouse Capital: 11.8%
  • Vivo Capital: 7.1%

• Stock Data:

  • Market Cap (HK$ mn): 24,846.2
  • Average 3-month total return (HK$ mn): 107.0
  • 52-week High/Low (HK$): 20.00/9.40
  • Total Issued Shares (mn): 1,764.6

• 12-Month Price Performance:

  • Absolute: 19.7%
  • Relative: 12.6%

Financial Summary

• FCFF (Free Cash Flow to Firm):

  • 2026E: 400
  • 2027E: 514
  • 2028E: 675
  • 2029E: 1,206
  • 2030E: 1,891
  • 2031E: 2,201
  • 2032E: 2,517
  • 2033E: 2,710
  • 2034E: 2,877
  • 2035E: 3,046

• Terminal Value (RMB mn): 35,596

• Equity Value (RMB mn):

  • 2026E: 28,438
  • 2028E: 32,316 (HK$)

• Net Debt: -6,519 (RMB mn)

• Minorities: 21 (RMB mn)

• Equity Value (HK$ mn): 32,316

Analyst Ratings and Recommendations

• CMBIGM Rating: BUY
• Target Price (TP) per share: HK$18.31
• Up/Downside: 30.1%
• Current Price: HK$14.08

Sensitivity Analysis

Terminal Growth Rate	WACC 9.73%	WACC 10.23%	WACC 10.73%	WACC 11.23%	WACC 11.73%
3.00%	22.26	20.77	19.48	18.34	17.35
2.50%	21.38	20.04	18.86	17.82	16.90
2.00%	20.62	19.39	18.31	17.35	16.50
1.50%	19.95	18.83	17.83	16.93	16.13
1.00%	19.36	18.32	17.39	16.56	15.80

CMBIGM Estimates vs Consensus

Metric	CMBIGM (RMB mn)	Consensus (RMB mn)	Diff (%)
Revenue (FY26E)	2,592	2,206	17%
Gross Profit (FY26E)	2,322	1,946	19%
Operating Profit (FY26E)	318	-59	NA
Net Profit (FY26E)	224	49	358%
EPS (FY26E)	0.13	0.04	265%
Gross Margin (FY26E)	89.59%	88.22%	+1.37 ppt

Key Financial Indicators

• Gross Profit Margin:

  • FY23A: 82.6%
  • FY24A: 86.3%
  • FY25A: 92.0%
  • FY26E: 89.6%
  • FY27E: 87.1%
  • FY28E: 86.9%

• Return on Equity (ROE):

  • FY23A: -8.6%
  • FY24A: -6.4%
  • FY25A: 8.9%
  • FY26E: 2.9%
  • FY27E: 3.5%
  • FY28E: 7.0%

• Current Ratio (x):

  • FY23A: 4.2
  • FY24A: 7.4
  • FY25A: 5.8
  • FY26E: 5.2
  • FY27E: 4.3
  • FY28E: 3.9

Valuation Ratios

• P/E Ratio:

  • FY23A: ns
  • FY24A: ns
  • FY25A: 32.3
  • FY26E: 96.0
  • FY27E: 77.0
  • FY28E: 36.1

• P/B Ratio:

  • FY23A: 4.2
  • FY24A: 3.9
  • FY25A: 4.5
  • FY26E: 4.7
  • FY27E: 4.8
  • FY28E: 5.2

Key Events and Outlook

• The upcoming ASCO meeting will release global clinical data on ICP-248 in AML and MDS, along with data on combination therapy with orelabrutinib.
• The company's pipeline is expanding, with ICP-332 and ICP-488 also being explored for multiple autoimmune indications.
• InnoCare's robust cash position supports its R&D initiatives and long-term growth in both oncology and autoimmune markets.

Analyst Certification

The research analyst certifies that:

• All views expressed accurately reflect personal views.
• No part of compensation is directly or indirectly related to the specific views in the report.
• No trading in the stock(s) covered in the report has occurred within 30 days prior to the report's issue, and no trading is planned within 3 business days after issue.

Important Disclosures

• The report is not investment advice and should not be relied upon for investment decisions.
• CMBIGM is not a registered broker-dealer in the US and may have conflicts of interest.
• The report is for the use of intended recipients only and may not be reproduced or distributed without prior written consent.