Jiangsu Hengrui Pharmaceuticals Co., Ltd. (Hengrui Pharma, 01276) reported a marked acceleration in earnings for the quarter ended 30 September 2026, powered by a sharp rise in out-licensing income and sustained growth in innovative drug sales.
Revenue and Profitability • Q3 operating revenue reached RMB 8.95 billion, up 20.55% year on year. • Total profit jumped 103.97% to RMB 2.78 billion, while net profit attributable to shareholders climbed 88.92% to RMB 2.46 billion. • Helped by milestone receipts from global partners, non-recurring items reduced reported earnings by RMB 55.61 million; core net profit still expanded 90.93% to RMB 2.51 billion. • Basic and diluted EPS for the quarter rose to RMB 0.37, an 85.00% increase.
Nine-Month Performance • Cumulative revenue for January–September advanced 5.26% to RMB 24.41 billion. • Net profit attributable to shareholders grew 20.38% to RMB 6.92 billion; EPS reached RMB 1.05 (+17.98%). • Operating cash flow slipped 13.90% to RMB 7.84 billion, though Q3 alone delivered a 21.76% rebound to RMB 5.86 billion.
Revenue Mix Shifts Toward Innovation • Sales of innovative drugs generated RMB 13.87 billion (+17.05 %), representing 64.59 % of total drug sales. Oncology assets contributed RMB 9.87 billion (+3.13 %), while non-oncology innovative products surged 75.36 % to RMB 4.01 billion. • Generic drug revenue declined 16.41 % to RMB 7.61 billion, reducing its share of drug sales to 35.41 %. • Out-licensing revenue rose 31.12 % to RMB 2.78 billion, driven by ongoing collaborations with GSK and BMS and new milestone triggers.
R&D Commitment • Total R&D investment for the first three quarters reached RMB 7.15 billion, including RMB 5.42 billion expensed R&D, underscoring the company’s innovation-centric strategy. • Q3 saw seven approvals (two Class 1 innovative drugs and five new indications), seven marketing applications accepted, 35 new clinical trial approvals, and two breakthrough therapy designations. • A US$300 million upfront payment from Novo Nordisk for the global (ex-Greater China) rights to oral GLP-1/GIP dual agonist HRS-1596 underscores Hengrui’s expanding partner network.
Balance Sheet and Liquidity • Total assets stood at RMB 76.72 billion as of 30 September 2026, up 9.81% from end-2025; equity attributable to shareholders grew 9.05% to RMB 66.81 billion. • Cash and bank balances rose to RMB 43.45 billion, aided by licensing inflows, offset by higher R&D spending and capex of RMB 2.67 billion. • Short-term borrowings of RMB 0.35 billion were booked during the period; total liabilities increased to RMB 9.38 billion.
Outlook and Risk Flags Management attributes the profit surge mainly to higher licensing income. It cautions that sales of key oncology agents such as camrelizumab and pyrotinib face intensifying competition and hospital-access delays, which may limit full-year innovative drug revenue growth relative to initial targets. The company plans to expedite market access for new launches and intensify academic promotion in Q4.
Hengrui Pharma’s sustained R&D investment, growing contribution from partnerships, and ongoing pipeline progression continue to reshape its revenue mix toward higher-margin innovative products, while generic drug exposure declines amid nationwide procurement pressure.
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