Wisdom Financial APP learned that Bocom Intl released a research report stating that Sino Biopharm (01177) achieved a 14.3% year-on-year growth in revenue to 5.47 billion yuan in 3Q24, and a 58.0% increase in adjusted net income to 0.6 billion yuan, both exceeding the bank's expectations. The management maintains the guidance of double-digit revenue growth for the whole year. In addition, the company acquired control of Hao Ou Bo (688656.SH), entering the immune diagnostics track, with a purchase price of 33.74 yuan per share. After completion, Hao Ou Bo will become the first subsidiary of Sino Biopharm to be listed on the A-share market. The bank believes that its product portfolio will form good synergy with the company's subsequent pipeline development in the respiratory, self-immunity, and other disease areas.

Bocom International's main points are as follows:

3Q24 exceeded expectations, reiterating the full-year guidance, and the growth path for next year is becoming clearer.

Excluding the ceased operation of business, revenue in 3Q24 increased by 14.3% year-on-year to 5.47 billion yuan, benefiting from the rapid volume increase of new/generics such as biosimilar drugs and Yilishu, as well as the improved recovery of overall hospital activities after the normalization of industry rectification; adjusted net income increased by 58.0% to 0.6 billion yuan. Both revenue and net income growth rates exceeded the bank's expectations. The management maintains the guidance of double-digit revenue growth for the whole year. Specific sales expectations for 2024 include: the overall biosimilar drugs reaching 2 billion yuan (compared to 0.5 billion yuan last year), of which Beiweizhu is around 0.7-0.8 billion yuan, and Qutuzhu around 0.5 billion yuan; Yilishu is expected to exceed 0.5 billion yuan. In 2025, new listed varieties will contribute more revenue increment: the imitation of Patuzhu is expected to exceed 0.8 billion yuan in its first year of listing; KRAS introduced from Yifang Bio has passed the CDE review, and is expected to be officially approved earlier than the previous expectation of early 2025.

Acquisition of control of Hao Ou Bo (688656.SH) and entry into the immune diagnostics track:

The company announced a formal tender offer to acquire up to 55.00% of the equity of Hao Ou Bo, where: 1) the company's wholly-owned subsidiary Beijing Runkang has agreed to acquire 29.99% equity; 2) after the aforementioned equity transfer, the non-wholly-owned subsidiary Shuangrun Zheng'an with a 51.02% stake in the company will make a tender offer to the other shareholders of Hao Ou Bo, acquiring up to 25.01% equity, where the two major shareholders of Hao Ou Bo have agreed to accept the offer related to 23.01% equity (i.e., after the offer is completed, the company will hold at least 53.00% of the equity of Hao Ou Bo and gain control of Hao Ou Bo). The purchase price is 33.74 yuan per share, representing approximately a 5% premium over the last trading day closing price of Hao Ou Bo before the suspension. Located in the Suzhou Industrial Park, Hao Ou Bo focuses on the field of immunodiagnostic testing, with two major product series of allergy and self-immunity; the revenue and non-GAAP net profit in 2023 reached 0.394 billion and 43.3 million yuan, respectively, with a year-on-year increase of +23% and +17%. The original shareholders of Hao Ou Bo have committed that the non-GAAP net profit for 2024-26 will not be less than 45.47 million, 47.74 million, and 50.13 million yuan, respectively, corresponding to at least a 5% CAGR from 2023 to 2026. After the acquisition, Hao Ou Bo will become the first subsidiary of Sino Biopharm to be listed on the A-share market, and the bank believes that its product portfolio will form good synergy with the company's subsequent pipeline development in the respiratory, self-immunity, and other disease areas.