Guoyuan International released a research report stating that GRAND PHARMA (00512) is experiencing sustained growth driven by the gradual launch of innovative products. The company's R&D progress in innovative drugs remains smooth, with high management efficiency. The vast potential of the radiopharmaceutical market is expected to further boost the company's performance and valuation. The target price is set at HK$11.88, representing an 18x P/E ratio for 2026 and offering a 45.23% upside from the current price. The "Buy" rating is maintained.
Key highlights from Guoyuan International include: - **Innovative Drugs Driving Revenue Growth**: In the first half of 2025, total revenue reached HK$6.11 billion (up 2.0% YoY in RMB terms), while normalized profit stood at HK$1.02 billion (down 5.0% YoY in RMB terms). The pharmaceutical technology segment contributed the most, generating HK$3.845 billion in revenue (up 2.9% YoY in RMB terms). Revenue from radiopharmaceutical oncology diagnostics and treatment surged 105.5% YoY in RMB terms to HK$420 million, primarily driven by the Yttrium-90 (90Y) microsphere product. - **Regulatory Milestone**: The FDA granted early approval for SIR-Spheres Yttrium-90 microspheres for unresectable hepatocellular carcinoma (HCC) based on breakthrough interim clinical data, without tumor size restrictions. This makes it the first and only selective internal radiation therapy (SIRT) product globally approved for both unresectable HCC and colorectal cancer liver metastases. - **Robust R&D Pipeline**: GRAND PHARMA operates five technology platforms and eight R&D centers, investing HK$1.02 billion in R&D in H1 2025. The company focuses on innovative radiopharmaceuticals, boasting a leading global pipeline that includes radionuclide conjugates (RDC) and interventional oncology products like TLX591, TLX250, and GPN02006, all in Phase III trials or approved for new indications. The radiopharmaceutical pipeline now comprises 27 candidates, with 50% being self-developed. Additionally, 15 innovative products are in registration or R&D stages, covering five radionuclides and seven cancer types. - **Clinical Breakthrough**: STC3141, an innovative sepsis treatment, met its Phase II clinical endpoint in China. The treatment group showed significant reductions in SOFA scores by Day 7 compared to baseline, particularly in the high-dose group, with statistically and clinically meaningful differences versus placebo. This marks the world’s first sepsis therapy targeting immune homeostasis restoration.
**Earnings Forecast**: GRAND PHARMA’s performance is projected to grow steadily, with estimated revenues of HK$12.35 billion, HK$13.39 billion, and HK$14.79 billion for 2024–2026, respectively. EPS is forecasted at HK$0.59, HK$0.66, and HK$0.77 for the same period.
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