Goldman Sachs has released a research report stating that Innocare (09969) reported third-quarter total revenue above the bank's expectations. The bank raised its 12-month price target for the H-shares from HK$22.71 to HK$23.16, and lifted the A-share price target for Innocare (688428.SH) from RMB37.93 to RMB38.68, maintaining a "Buy" rating.
Innocare's third-quarter pharmaceutical sales reached RMB531 million, up 39% year-on-year, broadly in line with the bank's estimate of RMB548 million. The growth was mainly driven by continued volume expansion of orelabrutinib, including contributions following the inclusion of first-line CLL/SLL in the national medical insurance directory, as well as differentiated contributions from MZL.
Total revenue reached RMB962 million, up 150% year-on-year, exceeding the bank's expectations, primarily due to milestone income from the Zenas collaboration, which supported third-quarter net profit of RMB409 million. Management maintained its guidance for pharmaceutical sales growth of over 35% in 2026 and expects profitability to be sustainable.
Excluding BD revenue, management stated that the core commercial business can achieve standalone break-even when pharmaceutical sales reach approximately RMB2.5 billion to RMB3 billion. The bank forecasts pharmaceutical sales of RMB2 billion in 2026, while recurring potential BD revenue is expected to provide additional room for earnings upgrades.
The bank also noted that multiple late-stage projects are approaching commercialization, the early-stage pipeline is expanding into ADCs and novel immune mechanisms, and the collaboration with Eli Lilly provides external validation of its small-molecule discovery capabilities. Following the results, the bank raised its net profit forecasts for 2026 to 2028 by RMB447 million, RMB108 million, and RMB17 million respectively, mainly reflecting higher-than-expected collaboration revenue, with pharmaceutical sales forecasts broadly unchanged.
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