HK Stock Market Move | INNOVENT BIO (01801) rebounds by over 6%, company clarifies that business operations are normal. Morgan Stanley points out that the market has overreacted to the news of Anhui Group's procurement.

INNOVENT BIO (01801) rebounded more than 6%, after the stock plunged 14% in the afternoon yesterday. As of the time of writing, it has risen 6.5% to HK$31.95, with a trading volume of HK$4.07 billion. In terms of news, in response to yesterday's abnormal stock price fluctuations, INNOVENT BIO issued a statement clarifying that the company's business operations are normal and there have been no changes. Looking ahead, the company believes that 2025 will be a year of rapid business growth and further innovation for CKH HOLDINGS globally. At the same time, they remain confident in achieving the goal of domestic product revenue reaching 20 billion RMB in 2027. In addition, INNOVENT BIO announced this morning that the new drug application for the third-generation epidermal growth factor receptor tyrosine kinase inhibitor targeted drug Olmutinib (erlotinib tablets) has been approved for listing by the China National Medical Products Administration. Morgan Stanley believes that yesterday's afternoon stock price decline may have been driven by news that the health department of Anhui Province took the lead in conducting bulk purchases of biosimilar drugs in China. According to Visible Alpha estimates, the combined revenue of biosimilar drugs including Rituximab, Bevacizumab, and Adalimumab will account for 30-35% of INNOVENT BIO's income in 2024-2025. However, Morgan Stanley believes that the price reaction was excessive, as the Anhui Province statement only expresses intent for national procurement work without specifying form and timing details, and the guidance target of 20 billion RMB in product revenue by 2027 for INNOVENT BIO has already taken into account the potential impact of biosimilar drugs VBP. The group has not developed any biosimilar drugs, so this contribution should be significantly reduced.