Investment Rating - The report downgrades the investment rating of Rongchang Biopharmaceutical (9995.HK) to "Hold" from a previous rating, maintaining a target price of HKD 33.0, indicating a potential upside of 12% from the current price of HKD 30.0 [1][2]. Core Views - The company is expected to achieve a revenue growth of over 50% year-on-year in 2024, driven by its innovative drugs RC18 and RC48. However, the lack of clear guidance on the international launch timeline for its product Tai Tasi Pu has led to the downgrade in rating [1][2]. - The company reported a revenue of RMB 1.08 billion in 2023, reflecting a year-on-year increase of 40.2%, with product sales contributing RMB 1.05 billion, up 42.1% year-on-year. The net loss attributable to shareholders was RMB 1.51 billion, a 51.3% increase year-on-year [1][2]. - The report highlights that the company has sufficient cash flow to sustain operations for approximately three years, with a cash balance of RMB 727 million at the end of 2023 and a net cash burn of RMB 1.5 billion for the year [1][2]. Financial Performance - The report provides a financial forecast indicating that revenue is expected to grow to RMB 1.61 billion in 2024, representing a 49.9% year-on-year increase, and further to RMB 2.52 billion in 2025 [6][7]. - The gross profit margin for product sales improved to 75.9% in 2023, an increase of 12.4 percentage points year-on-year, primarily driven by the sales growth of innovative drugs [1][2]. - The report anticipates that research and development expenses will rise to RMB 1.5 billion in 2024, reflecting the ongoing clinical trials for core products [1][2]. Key Catalysts - Major catalysts for 2024 include potential international licensing for RC18, approval for RA indications in China, and data readouts for RC48 and RC88 in clinical trials [1][2]. - The management expressed confidence in achieving the revenue guidance for 2024, citing strong sales performance in the first quarter [1][2].
浦银国际研究 公司研究|医药行业线仍未有明确指引，下调至“持有”评级