China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Innovent Biologics Placement - Has Ample Cash but the Discount Is Enticing

China/Asia TMT

Shawn Yang

Equity Bottom-Up

Innovent Biologics Inc / Equity Bottom-Up

<ul>
<li>Innovent reported C2H22 top line 13% below our estimate and 4.5% below consensus. Operating/net losses missed our expectation slightly, thanks to better gross margin, OPEX cutting and FX gain; </li>
<li>With biosimilars and license-in drugs contributing ~60% of total revenues, Innovent is effectively becoming a channel company. </li>
<li>We acknowledge it has a comprehensive pipeline, but stress that it is only in quantity not in quality; We maintain our SELL rating and cut TP by HK$1 to HK$24.</li>
</ul>


Innovent reported C2H22 top line 13% below our estimate and 4.5% below consensus. Operating/net losses missed our expectation slightly, thanks to better gross margin, OPEX cutting and FX gain; 
With biosimilars and license-in drugs contributing ~60% of total revenues, Innovent is effectively becoming a channel company. 
We acknowledge it has a comprehensive pipeline, but stress that it is only in quantity not in quality; We maintain our SELL rating and cut TP by HK$1 to HK$24.


[Innovent Biologics (1801 HK) Target Price Change]: Biotech Cannot Shun Itself Away from R&D Risks