BOCOM INTL: Maintains "Buy" rating on REMEGEN (09995), target price adjusted to HK$128

BOCOM INTL: Maintains "Buy" rating on REMEGEN (09995), target price adjusted to HK$128 BOCOM INTL released a research report maintaining a "Buy" rating on REMEGEN (09995), significantly raising its 2026 out-licensing revenue forecast, raising its 2026 revenue forecast and lowering its 2027-28 revenue forecasts, mainly reflecting the latest recognition pace of out-licensing transaction revenue and adjustments to product sales forecasts based on 1-3Q results. As the out-licensing business carries a significantly higher margin than product sales, the upward revision to this segment's revenue forecast directly drives a substantial improvement in overall profit expectations. Based on a DCF model, the target price was adjusted to HK$128, implying 97% upside potential, with abundant near-term catalysts expected to drive valuation recovery. BOCOM INTL's main views are as follows: 3Q26 product sales accelerated, with the quarter continuing to be profitable In 3Q26, the company achieved revenue of RMB910 million (same below), +46% YoY, of which commercialization sales in mainland China were RMB810 million, +33% YoY. By product: 1) Telitacicept 3Q26 sales revenue was RMB550 million, +45% YoY, mainly due to the continued solid competitive advantage in SLE and the rapid expansion of new patients and sales scale following approval in the neuroimmunology/gMG fields. Future growth drivers come from: a) new indications for IgA nephropathy and Sjgren's syndrome both approved in June, opening new growth space, while the gMG indication continues to penetrate the target market; b) the product was included in the new edition of the National Essential Drugs List, which is expected to further expand coverage of grassroots hospitals. 2) Disitamab vedotin 3Q26 sales revenue was RMB270 million, +13% YoY; its first-line urothelial carcinoma indication in combination with toripalimab was approved in April, and the subsequent NRDL negotiation results and ramp-up progress are worth watching. As of the end of 3Q26, the commercialization teams for telitacicept and disitamab vedotin numbered approximately 900 and 500 people, respectively, and from year-end to early next year the team allocation will be increased in the nephrology field for telitacicept. In the first three quarters, the gross margin of commercialization sales in mainland China was 83.6%, basically flat YoY; benefiting from the scale effect brought by product ramp-up, the commercialization sales expense ratio in mainland China decreased 7.7ppts YoY to 40.5%; R&D expenses decreased 22% YoY, mainly due to reduced related clinical spending after the products were out-licensed overseas. In 3Q26, the company's non-GAAP net profit attributable to shareholders was RMB74 million, continuing to achieve quarterly profitability in its base business following 2Q. Management expects overall operations in 4Q26 to continue the good momentum and is confident in achieving break-even in the base business for the full year. Global development of core pipeline enters harvest period in 2027 In 1H27, the company is expected to see three major readouts: global Phase III top-line data for telitacicept in gMG (led by partner Vor Bio, with BLA submission planned for 4Q27), Phase III data for telitacicept in oMG in mainland China, and global Phase III data for disitamab vedotin in combination with Keytruda for 1L UC (led by partner Pfizer, followed by BLA submission). The global Phase III trial of RC148 in 1L NSCLC is about to enroll its first patient, and in 2027 the company expects to report data from the Phase II portion of the 1L CRC Phase II/III trial and advance the Phase II study in combination with AbbVie's ADC. The company also plans in 2027 to advance IND filings and clinical entry for multiple bispecific ADCs, trispecific ADCs, dual-payload ADCs and TCE new molecules.