Haitong International has issued a research report stating that CSPC PHARMA's (01093) core business revenue and profits have bottomed out, with a return to a growth cycle expected by 2026. Starting in 2027, the company is projected to benefit from volume expansion of its innovative oncology and metabolic products, which is anticipated to accelerate pharmaceutical revenue growth. CSPC PHARMA currently has potential clinical milestone revenues of up to $5.8 billion (approximately RMB 40.6 billion), which are expected to incrementally boost company profits over the next 3-5 years. The firm believes upfront and milestone payments will provide sustainable recurring income and has raised its licensed revenue forecasts for periods beyond 2027. Valuation was conducted using a discounted cash flow (DCF) model based on cash flows from fiscal year 2027 to 2035. Assuming a weighted average cost of capital (WACC) of 7.9% and a perpetual growth rate of 2.5% (both unchanged), this corresponds to a target price of HK$13.07, and the "Outperform" rating is maintained. Key views from Haitong International are as follows.

CSPC's R&D capabilities have received repeated recognition, and the firm is optimistic that regular milestone income will strengthen the company's fundamentals. Over the past two years, CSPC has completed seven external collaboration deals, involving total upfront payments of $1.71 billion and potential milestones exceeding $30 billion. The company has collaborated three times with global pharmaceutical leader AstraZeneca, demonstrating the influence and value of CSPC's R&D platform worldwide. The firm believes that the nearly $6 billion in potential R&D milestones will progressively enhance CSPC's profits over the next 3-5 years, becoming a significant component of its regular income. Haitong International is positive on CSPC's ability to continuously share economic benefits through sales milestones and net sales royalties throughout a drug's lifecycle, capturing the global value of innovative medicines. Furthermore, the firm has confidence in CSPC's R&D platform, viewing its technology platforms and product pipeline—including cell therapy, ADC, siRNA, and mRNA—as having potential for out-licensing.

Haitong's research indicates that CSPC's small nucleic acid platform covers popular liver-delivery targets such as PCSK9, AGT, Lp(a), ANGPTL3, and FXI, addressing indications like hyperlipidemia, hypertension, and anticoagulation, with progress leading among domestic peers. For extrahepatic delivery, CSPC has filed a patent for a liposome delivery system; additionally, the company has filed patents for SOD1-siRNA (for ALS treatment) and Ang2/VEGF-A-siRNA (for ocular diseases). This suggests CSPC may possess technologies for neurological and ocular delivery, as well as dual-target small nucleic acid capabilities. Based on the depth of its pipeline and patents, Haitong considers CSPC's small nucleic acid platform to be first-tier among domestic pharmaceutical companies and sees potential out-licensing opportunities.

CSPC's bispecific antibody and ADC pipeline still holds potential for global expansion. SYS6010 (an EGFR-ADC) has accumulated clinical data from over a thousand patients globally, and the firm believes the product has best-in-class potential in both efficacy and safety. In January 2026, CSPC initiated a Phase III clinical trial in China combining SYS6010 with Osimertinib for first-line treatment of non-small cell lung cancer (NSCLC), with global Phase III trials (for 3L EGFRm NSCLC and 2L EGFRwt NSCLC) and a domestic Phase I/II trial for first-line EGFRwt NSCLC treatment planned within the year. Close attention is advised on data readouts for SYS6010 in EGFR wild-type NSCLC and frontline lung cancer treatment. As more domestic and international data accumulates, the firm sees significant potential for its subsequent global expansion. Additionally, the company is actively developing a PD-1/IL-15 fusion protein and targeting HER3, B7H3, and DLL3 in its ADC pipeline, with Haitong also optimistic about potential out-licensing opportunities for these early-stage assets.

CSPC is advancing cutting-edge cell therapy technology, with its in vivo CAR-T product receiving the first clinical approval in China. On January 29, CSPC announced that its SYS6055 injection received clinical approval in China for relapsed/refractory aggressive B-cell lymphoma. SYS6055 is the first in vivo CAR-T product approved for clinical trials in China. It uses a lentiviral vector to generate CD19-targeted CAR-T cells directly within the body, enabling specific recognition and elimination of target cells for therapeutic purposes. The firm believes that compared to traditional CAR-T products, SYS6055 offers potential advantages in cost, accessibility, and immediacy. Preclinical studies show the product can generate CAR-T cells specifically in vivo, demonstrating significant tumor suppression and a favorable safety profile. Haitong notes that Lilly acquired in vivo CAR-T company Orna Therapeutics for a total of $2.4 billion in February 2026, which may indicate growing multinational corporation interest in this field. Increased attention on CSPC's in vivo CAR-T pipeline is recommended.

Valuation adjustments have been made, with FY25/FY26/FY27 revenue forecasts revised to RMB 26.7/28.9/30.6 billion (previous FY25/FY26 forecasts were RMB 27.3/30.1 billion). This adjustment primarily reflects the staggered recognition of upfront payments from external licensing deals, totaling $510 million (approximately RMB 3.57 billion) by end-2024 and 2025 (only RMB 1.54 billion recognized as of 9M25). Net profit attributable to shareholders forecasts for FY25/FY26/FY27 are adjusted to RMB 4.4/4.6/5.3 billion (previous FY25/FY26 forecasts were RMB 5.0/5.1 billion).

Risk factors include new drug R&D risks, regulatory approval uncertainties, potential underperformance in drug commercialization, increased competition, and policy-related risks.