Goldman Sachs: Raises InnoCare Pharma (09969) target price to HK$23.16, rating "Buy"

Goldman Sachs issued a research report stating that InnoCare Pharma's (09969) total revenue in the third quarter exceeded the bank's expectations. The bank raised its 12-month target price for H-shares from HK$22.71 to HK$23.16, and raised its A-share target price for InnoCare Pharma (688428.SH) from RMB37.93 to RMB38.68, with a "Buy" rating. InnoCare Pharma's drug sales in the third quarter of this year were RMB531 million (same unit below), up 39% year-on-year, broadly in line with the bank's expectation of RMB548 million, mainly driven by the continued ramp-up of orelabrutinib, including contributions after first-line CLL/SLL was included in the National Reimbursement Drug List, as well as the differentiated contribution from MZL. Total revenue reached RMB962 million, up 150% year-on-year, above the bank's expectation, mainly due to milestone revenue from the Zenas collaboration, supporting third-quarter net profit of RMB409 million. Management maintained its guidance for drug sales growth of more than 35% in 2026 and expects profitability to be sustainable. Excluding BD revenue, management stated that the core commercial business can achieve standalone break-even when drug sales reach approximately RMB2.5 billion to RMB3 billion. The bank forecasts drug sales of RMB2 billion in 2026, while recurring potential BD revenue is expected to provide additional room for earnings upgrades. The bank also noted that multiple late-stage projects are approaching commercialization, the early pipeline is expanding into ADCs and novel immune mechanisms, and the collaboration with Eli Lilly provides external validation of its small-molecule discovery capabilities. After the results, the bank raised its net profit forecasts for 2026 to 2028 by RMB447 million, RMB108 million, and RMB17 million, respectively, mainly reflecting higher-than-expected collaboration revenue, with drug sales forecasts broadly unchanged.