Guoyuan International: Set the target price for INNOCARE (09969) at HK$16.81 with a rating of "Buy".

Guoyuan International released a research report stating that it is expected that the revenue of INNOCARE (09969) for the years 2025-2027 will be RMB 2.01 billion, 2.06 billion, and 2.56 billion respectively, with net profits of RMB 117 million, 17 million, and 188 million respectively. The company holds cash and cash equivalents of approximately 7.2 billion yuan, which is sufficient for innovative research. The company drives development through scientific innovation and has strong product capabilities. According to the DCF model, a target price of HK$16.81 is given, with a buy rating, representing a 28% increase compared to the current price. Guoyuan International's main points are as follows: - Obrutinib performs well in the SLEIIb trial The company mainly focuses on the fields of hematologic tumors, solid tumors, and autoimmune diseases. Obrutinib performed well in the SLEIIb trial: in the SLEIIb trial, the SRI-4 response rate of the 75mg group of Obrutinib (57.1%) was significantly higher than that of the placebo group (34.4%). In the subgroup with baseline BILAG1A or 2B, the SRI-4 response rate of the 75mg group increased by 35% compared to the placebo group; in the subgroup with BILAG1A or 2B and SLEDAI-2K score 4, it increased by 43%. The CDE has approved the initiation of a Phase III clinical trial of Obrutinib for the treatment of SLE, with the first patient expected to enroll in the first quarter of 2026. - Acceleration of product pipeline, Zolquanimib approved for marketing The company's independently developed novel TYK2 inhibitor ICP-488 for the treatment of cutaneous lupus erythematosus (CLE) received approval from the Chinese NMPA to conduct Phase II clinical trials. ICP-488 works by specifically binding to the TYK2 JH2 domain, blocking the signaling of inflammatory cytokines such as IL-23, IL-12, and type I interferon. The NMPA has approved the company's Zolquanimib (ICP-723) for the treatment of solid tumor patients aged 12 and above carrying the NTRK fusion gene. Clinical data showed excellent results: high objective response rate (89.1%) and high disease control rate (96.4%), 24-month PFS of 77.4%, and 24-month OS of 90.8%. The clinical data is superior to first-generation TRK inhibitors. The Phase III registration trial of Obrutinib for immune thrombocytopenia (ITP) in China has completed patient enrollment, with plans to submit a new drug application in the first half of 2026. - Smooth progress in BD The company reached a BD with ZenasBio Pharma in October 2025. Zenas was granted Obrutinib for non-oncology indications in Greater China and Southeast Asia as well as for global multiple sclerosis; IL-17i was granted for applications in Greater China and Southeast Asia as well as global CNS TYK2i. Zenas paid a $100 million cash down payment. The total potential value of this transaction exceeds $2 billion, and the collaboration with Zenas will significantly accelerate the overseas clinical development of the products. Risk warning: (1) The progress of new product research and development may be lower than expected; (2) Commercial progress of products may not meet expectations; (3) International situation complexity exceeds expectations, and the internationalization progress of innovative drugs is lower than expected.