Bocom Intl released a research report stating that Sino Biopharm (01177) saw a 14.3% year-on-year increase in revenue to 5.47 billion yuan in 3Q24, with adjusted net income growing by 58.0% to 0.6 billion yuan, both exceeding the bank's expectations. Management maintains the guidance of double-digit revenue growth for the full year. Additionally, the company acquired control of Haoubao (688656.SH) to enter the immunodiagnostic track, at a purchase price of 33.74 yuan per share. Haoubao will become Sino Biopharm's first A-share listed subsidiary after the acquisition, and the bank believes its product portfolio will synergize well with the company's future pipeline development in the respiratory, autoimmune, 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 discontinued business operations, revenue in 3Q24 increased by 14.3% year-on-year to 5.47 billion yuan, benefiting from the rapid volume increase of new/relatively new products like biosimilars, Yilitshu, as well as the normalization after industry rectification and the overall recovery improvement in hospital-side activities; adjusted net income grew by 58.0% to 0.6 billion yuan. Both revenue and net income growth rates exceeded the bank's expectations. Management maintains the guidance of double-digit revenue growth for the full year, with specific sales expectations for 2024 including: biosimilars reaching a total of 2 billion yuan (vs. 0.5 billion yuan last year), among which Bevacizumab around 0.7-0.8 billion yuan, Trastuzumab around 0.5 billion yuan; Yilitshu is expected to exceed 0.5 billion yuan. In 2025, newly listed products will contribute more to revenue growth: Palbociclib generics are expected to exceed 0.8 billion yuan in the first year of listing; KRAS from Iksundi Bio imported into China has passed CDE review and is about to be officially approved, earlier than the previously expected early 2025.

Acquisition of Haoubao (688656.SH) control, entering the immunodiagnostic track:

The company announced a formal tender offer to acquire up to 55.00% of Haoubao’s equity, where: 1) the company’s wholly-owned subsidiary Beijing Runkang has agreed to acquire 29.99% equity; 2) after the transfer of equity mentioned above, the company's non-wholly-owned subsidiary, Step Sharp Safety, holding 51.02% of the shares will make a tender offer to other shareholders of Haoubao, acquiring up to 25.01% equity, with two main shareholders of Haoubao already committing to accept the offer related to 23.01% of the equity (i.e., after the offer is completed, the company will hold at least 53.00% of Haoubao's equity and gain control of Haoubao). The purchase price is 33.74 yuan per share, representing a premium of about 5% compared to the last trading day closing price of Haoubao before its suspension. Haoubao is located in Suzhou Industrial Park, focusing on the field of immunodiagnosis, with two major product series in allergies and autoimmune diseases. In 2023, the revenue and non-GAAP net profit reached 0.394 billion and 4, 3.3 million yuan, respectively, a year-on-year growth of +23%/+17%, while the original shareholders of Haoubao committed that the non-GAAP net profit for 2024-26 will not be less than 4.547 million, 4.774 million/5, 0.13 million yuan, corresponding to at least 5% CAGR from 2023 to 2026. After the acquisition is completed, Haoubao will become the first A-share listed subsidiary of Sino Biopharm, and the bank believes its product portfolio will synergize well with the company's future pipeline development in the respiratory, autoimmune, and other disease areas.