GF SEC released a research report stating that it maintains a "Buy" rating for Hutchmed (China) (00013), expecting the net income attributable to the parent company for 2024, 2025, and 2026 to be 0.005, 0.02, and 0.074 billion USD respectively. The company's reasonable value is estimated at 41.35 HKD per share (1 USD = 7.78 HKD) through the DCF method. The company's R&D, commercialization, and overseas capabilities have been initially validated, and a sufficient pipeline of differentiated innovations is available. Gradually, each product is entering the harvest stage.

GF Securities' main points are as follows:

Event One:

The company announced on January 2, 2025, that the NDA for the combination therapy of Savolitinib and Osimertinib for the treatment of EGFR-mutated NSCLC with MET amplification that progressed after first-line EGFR inhibitor treatment has been accepted by the National Medical Products Administration and granted priority review.

The application for the domestic listing of Savolitinib for second-line NSCLC is progressing ahead, while international efforts are actively underway.

According to the corresponding announcement, the combination therapy of savolitinib and osimertinib has commenced three registration clinical trials: (1) SACHI: second-line treatment for EGFR-TKI resistant MET+NSCLC, domestic Phase 3; (2) SAFFRON: second/third-line treatment for osimertinib resistant MET+NSCLC, global Phase 3; (3) SAVANNAH: second/third-line treatment for osimertinib resistant MET+NSCLC, global Phase 2 registration clinical trial. The submission of the listing application in the domestic market is based on the results of SACHI, and this therapy has been included in the priority review, with specific data expected to be released at next year's academic conference.

Event Two:

The company announced on January 2, 2025, that it will sell 45% of its stake in Hutchmed (China) to Jinxin Health and SH PHARMA for 0.608 billion USD (4.478 billion RMB) in cash. After the transaction is completed, Hutchmed (China) will retain 5% of the stake in SH PHARMA. In 2023, Hutchmed (China) should have net income from SH PHARMA amounting to 47.4 million USD, not consolidated revenue.

Focusing on innovation in core business, Traditional Chinese Medicine assets were successfully sold.

According to the company's official website, the company plans to use the proceeds from the above Trade to further develop its internal product pipeline, including its new generation ADC platform. The company's first candidate drug based on this platform is expected to enter clinical trials in the second half of 2025.

Risk warning: risks of pharmaceutical review, cost control policy risks, and research and development progress not meeting expectations.