HAITONG INT'L: First to give BEIGENE (06160) a "outperform" rating with a target price of HK$182.35.

Haitong International released a research report stating that it is covering BeiGene (06160) for the first time and giving it an "outperform the market" rating. The bank expects revenue for FY25-27 to be $5 billion/$6 billion/$6.7 billion, corresponding to a three-year revenue CAGR of 21%; FY25-27 net profit attributable to shareholders will be $0.3 billion/$3.9 billion/$8.2 billion. Using a discounted cash flow (DCF) model and cash flows from FY25-FY34 for valuation, based on a WACC of 9% and a perpetual growth rate of 4.0%, the target price is HK$182.35. Haitong International's main points include: - BeiGene is a leading Chinese innovative drug manufacturer going global, with advanced capabilities in biopharmaceutical R&D and global commercialization. - BeiGene, established in 2010, is a global oncology treatment innovation company focusing on blood tumors and solid tumors. The company has 60+ clinical projects undergoing global clinical trials and 17 commercialized products, with core products zanubrutinib (BTK inhibitor) and tislelizumab (PD-1 inhibitor) commercialized in multiple regions including China, the United States, and Europe. The company's global capabilities in research and development, clinical trials, production, and commercialization are its core competencies, and it is expected to grow into a China-based multinational corporation in the future. - 2025 is a key turning point for BeiGene's fundamentals. The overseas sales of zanubrutinib continue to increase, and BeiGene is expected to achieve profit turnaround, with net profit potentially exceeding $800 million by 2027. - Zanubrutinib's revenue doubled to $2.6 billion in 2024, further solidifying its leading position in the U.S. hematologic malignancies market. The bank expects zanubrutinib to grow by 41% to $3.7 billion in 2025, with peak revenue reaching close to $5 billion in the future. Benefiting from zanubrutinib's strong performance, BeiGene is expected to achieve a profit turnaround in 2025 (US GAAP basis), with a revenue CAGR of 21% from 2024 to 2027, reaching $6.7 billion in revenue and $800 million in net profit by 2027. - BTK inhibitors, BCL-2 inhibitors, and BTK CDAC are expected to further deepen BeiGene's leadership in hematologic malignancies. - With the excellent data of zanubrutinib, BeiGene consolidates its position in BIC; Sonratoclax (BCL-2) is expected to become a BIC product, showing better deep remission when used in combination with zanubrutinib to challenge the current first-line therapies and further enhance its leadership position; BTK CDAC layout addresses the scenario of BTK inhibitor resistance, continuously expanding BeiGene's influence in the field of B-cell malignancies. - Rich pipeline catalysts, with more than 10 early-stage pipelines around 2025. - PoC data reading in 2025 indicates rich pipeline catalysts for BeiGene, including 1) the mid-term PFS analysis of zanubrutinib in phase 3 study for first-line MCL patients; 2) global R/RMCL and Chinese R/R CLL phase 2 data reading for sonrotoclax; 3) initiation of CLL and pitofenone(BTK CDAC) phase 3 head-to-head clinical trial. In addition, multiple clinical stage molecules will disclose PoC data in 2025-26, including CDK4, pan-KRAS, B7H4ADC, EGFR CDAC, PRMT5+MAT2A, IRAK4CDAC, CDK2, B7H3ADC, etc. Risks include commercialization below expectations, R&D below expectations, industry policy risks, and geopolitical uncertainties.