INNOVENT (Stock Code: 1801)

Business Summary & Highlights:

Innovent Biologics (stock code: 1801.HK), a Hong Kong-listed company, is principally engaged in research and development of antibody and protein technology products, sale of self-made products, and provision of related technology transfer, consultation and services.

The group have expanded clinical-stage pipeline from 23 assets to 25 assets; with the approval of PEMAZYRE in Taiwan market, and the treatment of first line non-squamous non-small cell lung cancer accepted by the U.S. Food and Drug Administration, and with expansion of New Drug Application stage and pivotal stage.

Financial Summary:

For the six months ended 30 June 2021, the revenue rose 97.3% year-on year from RMB 984.2 million to RMB 1,941.8 million; driven by her leading product TYVYT (sintilimab injection) – a high quality PD-1 inhibitor, and three launched antibody drugs. The Group’s coverage of such injection has expanded to about 4,000 hospitals and 900 DTP/pharmacies across more than 300 cities as of 31 December 2020.

Gross profit margin achieved 87.3% compared with the previous 79.9%. Research and development expenses increased from RMB 808 million to RMB 1,042.1 million while selling and marketing expenses increased from RMB 446.6 million to RMB1,137.3 million. As at 30 June 2021, the Company had approximately US$1,728.2 million cash on hand.

Risk:

Firstly, Innovent may not generate profit earnings until the financial year of 2023. This uncertainty will incur great stock price fluctuation  Secondly, risk of declining demand may occur in pharmaceutical R&D services market. Thirdly, there may be risk of losing scientific and technological talents and senior management members; and risks regarding intellectual property protection

Technical Analysis:

It is suggested to accumulate the stock at the price around $50. The target price for medium term is $57.5. Cut-loss price will be $47.

References

www.hkex.com.hk

www.etnet.com.hk

www.afe-solutions.com

I, Gary Tam, am a licensed person under the Securities and Futures Commission. Until the date this commentary was published, neither I and/or my affiliates are the beneficiary of the securities mentioned herein or are entitled to any financial interests in relation thereto.