UBS: Maintains a "buy" rating on INNOCARE (09969) with a target price raised to 9.8 Hong Kong dollars.

UBS released a research report stating that it maintains a "buy" rating on INNOCARE (09969), and has raised revenue forecasts for each year from 2024 to 2026 by 7.3%, 2.7%, and 2.1% respectively. It has also increased gross margin forecasts for the next two years by 0.3% and 0.5% respectively, while lowering expense ratios, resulting in a narrower projected loss for the company in each year from 2024 to 2026. The target price has been raised from HK$8.6 to HK$9.8. The bank stated that the company's third quarter performance exceeded expectations, with a significantly reduced year-on-year loss of 87.5% to RMB 13.6 million, far better than the market's expected loss of about RMB 155 million. Gross margin increased by 1.9 percentage points to 86.4% year-on-year, and as of the end of the last quarter, the company had RMB 7.8 billion in cash and cash equivalents, maintaining a strong financial position. The report stated that the company has further raised its annual product sales guidance to a year-on-year growth of over 45%, demonstrating strong sales growth momentum. In terms of research and development, UBS expects the company to initiate global Phase III trials of Orelabrutinib for progressive multiple sclerosis and enroll the first patient, as well as initiate Phase III trials of treating secondary progressive multiple sclerosis overseas. Additionally, the company is expected to initiate Phase III trials of ICP-488 for treating psoriasis, as well as apply for approval for the potential new drug Tafasitamab.