CICC has released a research report stating that it maintains an outperform rating on INNOVENT BIO (01801), keeping its 2026 net profit attributable to shareholders forecast at RMB 2.43 billion. However, due to expenses related to international expansion, the firm has lowered its 2027 net profit forecast by 5.2% to RMB 3.64 billion. Based on the company's proactive 2030 guidance and enhanced certainty of profit delivery, CICC has maintained its target price of HK$118.3, implying an 18.2% upside from the current share price.
The company's 1H26 results slightly exceeded the firm's expectations. Revenue came in at RMB 8.62 billion, up 44.8% year-on-year. Net profit attributable to shareholders reached RMB 1.25 billion, up 50.2%, while non-IFRS net profit was RMB 1.7 billion, up 40.5%. The slight beat was primarily driven by better-than-expected cost control.
Strong product revenue growth, combined with improving operational efficiency, has propelled the company into a profit release phase. In 1H26, product revenue reached RMB 8.2 billion, up 56.7% year-on-year, with second-quarter revenue exceeding RMB 4.3 billion, representing a sequential increase of over 10%. According to company announcements, the product portfolio has expanded to 20 products as of the interim report, with 13 included in the national medical insurance catalog. The company also introduced two new products, abemaciclib and quizartinib hydrochloride. The firm expects that potential blockbuster drugs in the pipeline, including mazdutide and tislelizumab, which will be included in the national medical insurance for the first time in 2026, will contribute solid growth.
In the first half of the year, the company's selling expense ratio decreased by 2.4 percentage points year-on-year, while the administrative expense ratio fell by 1.7 percentage points, further supporting profit delivery. For the first time, the company introduced a 2030 revenue guidance of RMB 35-40 billion, exceeding market expectations. Building on the previous 2027 revenue guidance of RMB 20 billion, the new guidance implies a revenue compound annual growth rate of approximately 20-26% from 2027 to 2030E. The firm believes that the company's high-growth outlook stems from confidence in the overseas commercialization potential of international blockbuster drugs such as IBI363, IBI343, and IBI324. Sustainable commercial revenue growth and profit delivery are expected to provide strong support for the company's valuation floor.
According to company announcements, research and development catalysts to watch include: IBI363 melanoma registration clinical data is expected to be read out in 2H26, with the company planning to submit a domestic NDA by end of 2026 to early 2027. The first-line non-small cell lung cancer and first-line colorectal cancer indications are expected to read out proof-of-concept data in 2026-2027. First-line gastric cancer data has been selected for a rapid oral presentation at the 2026 ESMO conference. IBI343 is expected to complete proof-of-concept for first-line pancreatic cancer and gastric cancer in 2026-2027. IBI324 will initiate a global multicenter registration clinical trial in 2H26. IBI3001 has been selected for an oral presentation at the 2026 ESMO conference.
Risks include research and development failure, expenses exceeding expectations, underperformance in external collaborations, and overseas risks.