20220803-招银国际-和黄医药-00013.HK-On_track_ramp-up_of_commercial_products_6页_970kb

Hutchmed (13 HK) Summary

Core Content

Hutchmed (13 HK) is a biopharmaceutical company that has demonstrated strong growth in its commercial products and is actively expanding its market presence. The company's financial performance and strategic initiatives are outlined in the document, highlighting both revenue growth and challenges in international approvals.

Revenue and Growth

• Total Revenue in 1H22: US$202.0 million (+28% YoY)
• Oncology/Immunology (I/O) Revenue in 1H22: US$91.1 million (+113% YoY)
• I/O Revenue Guidance for 2022: US$160-190 million (unchanged from previous guidance)
• Projected Revenue Growth:
  • FY22E: US$440 million
  • FY23E: US$516 million
  • FY24E: US$680 million
• YoY Growth Projections:
  • FY22E: 23.4%
  • FY23E: 17.3%
  • FY24E: 31.9%

Product Performance

• Fruquintinib:
  • New patients treated in 1H22: ~14,000 (vs. 10,000 in 1H21)
  • In-market sales: US$50.4 million (+26% YoY)
  • Market share for 3L CRC: increased from 39% (4Q21) to 43% (2Q22)
  • Ph3 FRESCO-2 Trial: Expected to release top-line results in August 2022
• Surufatinib:
  • China sales in 1H22: US$13.6 million (+69% YoY)
  • Ph2 SAVANNAH Study: Results to be presented at WCLC 2022
  • Ph3 SAFFRON Study: Expected to complete FPI in 2H22
  • EMA NDA Filing: Withdrawn due to inapplicability of China studies
  • PMDA Bridging Study: Ongoing, expected to complete in 1H23
• Savolitinib:
  • In-market sales in 1H22: US$23.3 million (US$13.8 million attributable to HCM)
  • Marketed by AstraZeneca
  • Potential Inclusion in 2023 China NRDL: Being prepared for

Key Financial Highlights

• Strong Cash Position: US$826.2 million at end-1H22, sufficient for 3-year sustainability
• R&D Expenses in 1H22: US$181.7 million (+48% YoY)
• Target Price: HK$36.06 (revised from HK$51.15)
• DCF Valuation:
  • Based on 14-year projection and WACC of 10.73%
  • Terminal growth rate: 2%
• Equity Value: HK$31,181 million (US$4,023 million)
• Shareholding Structure:
  • CK Hutchison Holdings: 38.5%
  • The Capital Group: 10.8%

Key Challenges and Strategic Adjustments

• Surufatinib Approval Delays: Delayed overseas approvals led to a revised target price
• Regulatory Differences: EMA requires different registration studies than those conducted in China
• Market Share Gains: Fruquintinib continues to gain market share in CRC treatment despite being launched later than regorafenib

Financial Summary

Valuation Metrics

• DCF per Share (HK$): 36.06
• P/B (Book Value per Share): 18.5 (2022E)
• Terminal Value: US$8,336 million
• Current Ratio: 2.7 (2022E)
• Net Debt to Equity: 1.0 (2022E)

Analyst Ratings and Recommendations

• Rating: BUY
• Target Price: HK$36.06
• Up/Downside: 95.6%
• Current Price: HK$18.44

Share Performance

Summary of Key Points

• Hutchmed has seen strong revenue growth in its oncology and immunology segments, driven by three in-house developed drugs.
• The company has expanded its commercial team to around 820 employees, indicating a focus on scaling operations.
• Fruquintinib has shown consistent sales growth and increasing market share in CRC treatment.
• Surufatinib faces challenges in international approval due to regulatory differences, but remains strong in China.
• Savolitinib is marketed by AstraZeneca, with HCM receiving a portion of its revenue.
• The company has a robust cash position, supporting its operations and R&D initiatives.
• Analysts have revised their target price due to potential delays in overseas approvals, using a DCF model with a terminal growth rate of 2% and WACC of 10.73%.
• Financial performance shows continued net losses but with expectations of improvement in the long term.