According to the Futu Securities App, Bank of America Securities has released a research report stating that it has raised the target price for Hansoh Pharma (03692) from HKD 16.4 to HKD 20.8, an increase of 26.8%, and at the same time upgraded its investment rating from "underperform" to "buy".

The report states that the above adjustments mainly include: 1) an improvement in revenue structure, with a gradual reduction in the negative impact of volume-based procurement (VBP) of generic drugs, and the combined revenue contribution of innovative drugs and collaborative products accounting for more than 65% of total revenue in 2023; 2) Accelerating the commercialization of products, such as Ameile; 3) Solid progress in overseas business, BD activities, and widely recognized ADC R&D capabilities; 4) Strong chronic disease pipeline that may benefit from the growing demand of an aging population.

The bank stated that it has raised its revenue forecasts for Hansoh Pharma in 2024, 2025, and 2026 by 0.6%, 1%, and 3.1%, respectively. It has also lowered its capital expenditure for 2027 and beyond from CNY 392 million to CNY 298 million. Innovative drugs have become the main revenue contributor for Hansoh Pharma. In 2023, the revenue from new drugs and collaborative products increased by 37.1% YoY to CNY 6.9 billion, higher than other large pharmaceutical companies, indicating solid progress in the development and commercialization of innovative drugs. The policy support for innovative drugs and the implementation of VBP greatly restrict the generic drug market, and it is expected that innovative drugs will continue to be the main driving force for the pharmaceutical industry's growth.