HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Hutchison China MediTech Ltd / Equity Bottom-Up

<ul>
<li>HUTCHMED’s 23H1 results were in line with expectation. We updated our forecast for the three core products. Its 2023 total revenue would achieve a high double-digit growth. HUTCHMED is undervalued. </li>
<li>Performance prospects for 2024 and beyond largely depend on whether fruquintinib can smoothly obtain FDA approval in 2023, which means significant progress in internationalization and possibility of breakeven in 2025.</li>
<li>Based on the performance so far, we think the clarity of HUTCHMED’s performance is high and the guidance given by management is reliable. The Company deserves more attention from investors.</li>
</ul>


HUTCHMED’s 23H1 results were in line with expectation. We updated our forecast for the three core products. Its 2023 total revenue would achieve a high double-digit growth. HUTCHMED is undervalued. 
Performance prospects for 2024 and beyond largely depend on whether fruquintinib can smoothly obtain FDA approval in 2023, which means significant progress in internationalization and possibility of breakeven in 2025.
Based on the performance so far, we think the clarity of HUTCHMED’s performance is high and the guidance given by management is reliable. The Company deserves more attention from investors.


Hutchmed China Ltd (13.HK/​HCM.US) 23H1 - This Company Is Becoming More Attractive

Equity Capital Markets

Hutchmed China Ltd / Equity Capital Markets

<ul>
<li>HUTCHMED announced the disposal of 45% equity interest in SHPL for US$608 million, including selling 35% equity interest to GP Health Service Capital and 10% equity interest to Shanghai Pharma.</li>
<li>There’re synergies between SHPL and Shanghai Pharma regarding TCM business. It's necessary for HUTCHMED to sell non-core JV to reserve cash flow in advance to focus on innovative drug business.</li>
<li>The entire valuation of SHPL reaches RMB10 billion, or about 15x P/E. If HUTCHMED’s innovative drug business can bear fruit, its valuation has more room to grow in the future.</li>
</ul>


HUTCHMED announced the disposal of 45% equity interest in SHPL for US$608 million, including selling 35% equity interest to GP Health Service Capital and 10% equity interest to Shanghai Pharma.
There’re synergies between SHPL and Shanghai Pharma regarding TCM business. It's necessary for HUTCHMED to sell non-core JV to reserve cash flow in advance to focus on innovative drug business.
The entire valuation of SHPL reaches RMB10 billion, or about 15x P/E. If HUTCHMED’s innovative drug business can bear fruit, its valuation has more room to grow in the future.


HUTCHMED to Divest 45% Stake in Non-Core Joint Venture with Shanghai Pharma

Ascentage Pharma Group Corp / Equity Capital Markets

<ul>
<li>Ascentage has filed with the SEC to raise up to US$100 million in a US IPO. We think its future market value is expected to surpass that of Hutchmed.</li>
<li>The outlook of olverembatinib is clear. Takeda can give more possibilities to olverembatinib. 2025 Sales of olverembatinib is expected to reach RMB500 million.Market value contribution from olverembatinib is US$1-1.5 billion. </li>
<li>Investors have higher expectations on APG-2575 to be out-licensed to MNCs. We think the peak sales of APG-2575 is expected to surpass that of olverembatinib in overseas markets. </li>
</ul>


Ascentage has filed with the SEC to raise up to US$100 million in a US IPO. We think its future market value is expected to surpass that of Hutchmed.
The outlook of olverembatinib is clear. Takeda can give more possibilities to olverembatinib. 2025 Sales of olverembatinib is expected to reach RMB500 million.Market value contribution from olverembatinib is US$1-1.5 billion. 
Investors have higher expectations on APG-2575 to be out-licensed to MNCs. We think the peak sales of APG-2575 is expected to surpass that of olverembatinib in overseas markets. 


Pre-IPO Ascentage Pharma - The US Stock Listing Will Stimulate Future Growth Potential

Ascentage Pharma Group Corp / Equity Bottom-Up

<ul>
<li>For full-year 2024, sales of olverembatinib is expected to reach about RMB240 million, and there is a possibility of exceeding expectations. RMB500 million sales of olverembatinib is expected in 2025.</li>
<li>Market value of US$1.25 – 1.9 billion is reasonable range for Ascentage if just considering olverembatinib alone. The peak sales of APG-2575 is expected to surpass olverembatinib in overseas markets. </li>
<li>The next big catalyst is the potential licensing cooperation with MNCs for APG-2575, if reaches, would push Ascentage’s market value to surpass HUTCHMED, as prospects of APG-2575 is basically guaranteed.</li>
</ul>


For full-year 2024, sales of olverembatinib is expected to reach about RMB240 million, and there is a possibility of exceeding expectations. RMB500 million sales of olverembatinib is expected in 2025.
Market value of US$1.25 – 1.9 billion is reasonable range for Ascentage if just considering olverembatinib alone. The peak sales of APG-2575 is expected to surpass olverembatinib in overseas markets. 
The next big catalyst is the potential licensing cooperation with MNCs for APG-2575, if reaches, would push Ascentage’s market value to surpass HUTCHMED, as prospects of APG-2575 is basically guaranteed.


Ascentage Pharma (6855.HK) - The Future Valuation Leap Is Worth Looking Forward To

<ul>
<li>HUTCHMED will receive a US$20 million milestone payment from its partner Takeda. In our view, peak sales of fruquintinib is expected to reach about US$700 million in overseas markets.</li>
<li>After the Head of AstraZeneca China has been detained by authorities, AstraZeneca's future commercialization would be affected, which will have a negative impact on savolitinib and HUTCHMED in short term.</li>
<li>Reasonable market value of HUTCHMED based on the three major products is about US$2.7-3.3 billion assuming P/S of 4. If market value is below US$2.5 billion, HUTCHMED is undervalued.</li>
</ul>


HUTCHMED will receive a US$20 million milestone payment from its partner Takeda. In our view, peak sales of fruquintinib is expected to reach about US$700 million in overseas markets.
After the Head of AstraZeneca China has been detained by authorities, AstraZeneca's future commercialization would be affected, which will have a negative impact on savolitinib and HUTCHMED in short term.
Reasonable market value of HUTCHMED based on the three major products is about US$2.7-3.3 billion assuming P/S of 4. If market value is below US$2.5 billion, HUTCHMED is undervalued.


Hutchmed China Ltd (13.HK/​​HCM.US) - The Fundamentals Remain Strong

Hong Kong

Hutchison China MediTech Ltd develops, manufactures, and sells pharmaceutical products. The Company offers drugs for oncology and autoimmune diseases treatment. Hutchison China MediTech markets its products globally.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Hutchison China MediTech Ltd (HCM US)

Hutchmed China Ltd (13.HK/HCM.US) 23H1 - This Company Is Becoming More Attractive

We have seen over 35% share price rally after this insight was published. Obviously, the market is optimistic about the upcoming fruquintinib's FDA...

Xinyao (Criss) Wang

HUTCHMED to Divest 45% Stake in Non-Core Joint Venture with Shanghai Pharma

HUTCHMED sells 45% stake in SHPL for US$608 million to focus on innovative drug business, which is a right strategic move. If innovative drug...

Xinyao (Criss) Wang

Pre-IPO Ascentage Pharma - The US Stock Listing Will Stimulate Future Growth Potential

Ascentage aims to raise $100 million in US IPO, with potential valuation surpassing Hutchmed. Olverembatinib's outlook is certain. Catalyst is...

Xinyao (Criss) Wang

Ascentage Pharma (6855.HK) - The Future Valuation Leap Is Worth Looking Forward To

Olverembatinib sales is expected to reach RMB240 million in 2024, RMB500 million in 2025. Reasonable market value is US$1.25-1.9 billion. Licensing...

Xinyao (Criss) Wang

Hutchmed China Ltd (13.HK/HCM.US) - The Fundamentals Remain Strong

HUTCHMED receives $20 million milestone from Takeda. Fruquintinib peak sales is expected to reach $1 billion.AstraZeneca China Head's detainment...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hutchmed China Ltd (13.HK/​HCM.US) 23H1 - This Company Is Becoming More Attractive

We have seen over 35% share price rally after this insight was published. Obviously, the market is optimistic about the upcoming fruquintinib's FDA...

Xinyao (Criss) Wang

HUTCHMED to Divest 45% Stake in Non-Core Joint Venture with Shanghai Pharma

​HUTCHMED sells 45% stake in SHPL for US$608 million to focus on innovative drug business, which is a right strategic move. If innovative drug...

Xinyao (Criss) Wang

Pre-IPO Ascentage Pharma - The US Stock Listing Will Stimulate Future Growth Potential

​Ascentage aims to raise $100 million in US IPO, with potential valuation surpassing Hutchmed. Olverembatinib's outlook is certain. Catalyst is...

Xinyao (Criss) Wang

Ascentage Pharma (6855.HK) - The Future Valuation Leap Is Worth Looking Forward To

Olverembatinib sales is expected to reach RMB240 million in 2024, RMB500 million in 2025. Reasonable market value is US$1.25-1.9 billion. Licensing...

Xinyao (Criss) Wang

Hutchmed China Ltd (13.HK/​​HCM.US) - The Fundamentals Remain Strong

​HUTCHMED receives $20 million milestone from Takeda. Fruquintinib peak sales is expected to reach $1 billion.AstraZeneca China Head's detainment...

Xinyao (Criss) Wang

Hutchmed China Ltd (13.HK/HCM.US) 23H1 - This Company Is Becoming More Attractive

HUTCHMED sells 45% stake in SHPL for US$608 million to focus on innovative drug business, which is a right strategic move. If innovative drug...

Ascentage aims to raise $100 million in US IPO, with potential valuation surpassing Hutchmed. Olverembatinib's outlook is certain. Catalyst is...

Hutchmed China Ltd (13.HK/HCM.US) - The Fundamentals Remain Strong

HUTCHMED receives $20 million milestone from Takeda. Fruquintinib peak sales is expected to reach $1 billion.AstraZeneca China Head's detainment...