HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Takeda’s sales team is fully prepared for the launch of fruquintinib in EU. 2024 full-year overseas sales may once again beat the expectations. High growth is expected from 2024 to 2026.</li>
<li>Peak sales of fruquintinib + savolitinib + surufatinib that recorded in HUTCHMED’s revenue is expected to be over US$750 million.Without considering other revenue, market value would reach about US$4.5 billion.</li>
<li>HUTCHMED’s pipeline lacks blockbuster products and the indications are small. With the rise of PROTAC, small molecule drugs would face challenges, which would test the management's resilience in the future.</li>
</ul>


Takeda’s sales team is fully prepared for the launch of fruquintinib in EU. 2024 full-year overseas sales may once again beat the expectations. High growth is expected from 2024 to 2026.
Peak sales of fruquintinib + savolitinib + surufatinib that recorded in HUTCHMED’s revenue is expected to be over US$750 million.Without considering other revenue, market value would reach about US$4.5 billion.
HUTCHMED’s pipeline lacks blockbuster products and the indications are small. With the rise of PROTAC, small molecule drugs would face challenges, which would test the management's resilience in the future.


Hutchmed China Ltd (13.HK/​​HCM.US) - Time to Reassess Valuation Prospects Despite the Pain Points

<ul>
<li>HUTCHMED’s 2023 results were in line with expectation. It is gradually becoming a self-sufficient innovative drug enterprise with sufficient cashflow due to upfront/milestone payments of Takeda and increasing product revenue.</li>
<li>2024 revenue guidance seems very optimistic, which has to rely on fruquintinib’s global sales performance (or Takeda’s contribution), and also on the timing of approval of fruquintinib’s 2L gastric cancer.</li>
<li>Starting from 2024, HUTCHMED will enter a period of accelerated growth in product revenue based on major catalysts.Market value of US$1,200 - US$1,800 million is a good place to long. </li>
</ul>


HUTCHMED’s 2023 results were in line with expectation. It is gradually becoming a self-sufficient innovative drug enterprise with sufficient cashflow due to upfront/milestone payments of Takeda and increasing product revenue.
2024 revenue guidance seems very optimistic, which has to rely on fruquintinib’s global sales performance (or Takeda’s contribution), and also on the timing of approval of fruquintinib’s 2L gastric cancer.
Starting from 2024, HUTCHMED will enter a period of accelerated growth in product revenue based on major catalysts.Market value of US$1,200 - US$1,800 million is a good place to long. 


Hutchmed China Ltd (13.HK/​​HCM.US) - High Growth Is Expected from 2024 to 2026

<ul>
<li>HUTCHMED's 2023 results are relatively certain. Fruquintinib had a strong start after obtaining approval in the US, with sales of about US$13-15 million in just more than a month.</li>
<li>Oncology/Immunology consolidated revenue would be in line with management’s performance guidance (US$450 to US$550 million) in 2023. There are promising data readout/NDA submission this year, which would be potential catalysts.</li>
<li>HUTCHMED has sufficient cashflow and does not require external financing. From 2024 to 2026, it will enter a period of accelerated growth in product revenue. Breakeven is achievable in 2025.</li>
</ul>


HUTCHMED's 2023 results are relatively certain. Fruquintinib had a strong start after obtaining approval in the US, with sales of about US$13-15 million in just more than a month.
Oncology/Immunology consolidated revenue would be in line with management’s performance guidance (US$450 to US$550 million) in 2023. There are promising data readout/NDA submission this year, which would be potential catalysts.
HUTCHMED has sufficient cashflow and does not require external financing. From 2024 to 2026, it will enter a period of accelerated growth in product revenue. Breakeven is achievable in 2025.


Hutchmed China Ltd (13.HK/​​HCM.US) - 2023 Results Preview and Catalysts in 2024

Hutchison China MediTech Ltd / Equity Bottom-Up

<ul>
<li>HUTCHMED’s 23H1 results were in line with expectation. We updated our forecast for the three core products. Its 2023 total revenue would achieve a high double-digit growth. HUTCHMED is undervalued. </li>
<li>Performance prospects for 2024 and beyond largely depend on whether fruquintinib can smoothly obtain FDA approval in 2023, which means significant progress in internationalization and possibility of breakeven in 2025.</li>
<li>Based on the performance so far, we think the clarity of HUTCHMED’s performance is high and the guidance given by management is reliable. The Company deserves more attention from investors.</li>
</ul>


HUTCHMED’s 23H1 results were in line with expectation. We updated our forecast for the three core products. Its 2023 total revenue would achieve a high double-digit growth. HUTCHMED is undervalued. 
Performance prospects for 2024 and beyond largely depend on whether fruquintinib can smoothly obtain FDA approval in 2023, which means significant progress in internationalization and possibility of breakeven in 2025.
Based on the performance so far, we think the clarity of HUTCHMED’s performance is high and the guidance given by management is reliable. The Company deserves more attention from investors.


Hutchmed China Ltd (13.HK/​HCM.US) 23H1 - This Company Is Becoming More Attractive

Global Healthcare Analyst

Tina Banerjee

Thematic (Sector/Industry)

<ul>
<li>BeiGene has received FDA approved for Tevimbra for the first-line treatment of certain types of gastric cancers. Innovent announced a collaboration and exclusive license agreement with Roche for an ADC.</li>
<li>CSPC Pharmaceutical got clinical trial approval in China for Leuprorelin extended-release Injection. Sichuan Kelun-Biotech received China approval for tagitanlimab in nasopharyngeal cancer.</li>
<li>Hutchmed China is divesting its 45% equity interest in joint venture for $608M. Yuhan Corp has received European approval for its lung cancer drug Leclaza.</li>
</ul>


BeiGene has received FDA approved for Tevimbra for the first-line treatment of certain types of gastric cancers. Innovent announced a collaboration and exclusive license agreement with Roche for an ADC.
CSPC Pharmaceutical got clinical trial approval in China for Leuprorelin extended-release Injection. Sichuan Kelun-Biotech received China approval for tagitanlimab in nasopharyngeal cancer.
Hutchmed China is divesting its 45% equity interest in joint venture for $608M. Yuhan Corp has received European approval for its lung cancer drug Leclaza.


APAC Healthcare Weekly (Jan 5)- Beigene, Innovent Biologics, CSPC Pharma, Hutchmed, Yuhan, Lupin

Hong Kong

HUTCHMED (China) Limited develops, manufactures, and sells pharmaceutical products. The Company offers drugs for oncology and autoimmune diseases treatment. HUTCHMED (China) markets its products worldwide.

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Hutchmed China Ltd (13 HK)