研究报告全文：MN17Feb2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateInnoCarePharma9969HKBreakupwithBiogenonorelabrutinibforthetreatmentofautoimmunediseasesBiogenterminatedpartnershipwithInnoCareOn15FebBiogenTargetPriceHK1084terminatedthecollaborationwithInnoCareonorelabrutinibforthetreatmentPreviousTPHK2014ofmultiplesclerosisMSandotherautoimmunediseasesThetwopartiesUpDownside225startedthecollaborationinJul2021andsincethenInnoCarehasreceivedCurrentPriceHK885US125mnupfrontpaymentandwaseligibletoreceiveuptoUS8125mnChinaHealthcaremilestonepaymentandfuturesalesroyaltiesaccordingtotheoriginalagreementHoweverduetothecurrentterminationfuturepaymentwillnotJillWUCFAhappenwhileInnoCaredoesntneedtoreturntheupfrontpayment85239000842jillwucmbicomhkPh2MStrialoforelabrutinibpartiallyonholdbyUSFDAduetolivertoxicproblemwhilenorealliverinjuryobservedaspermanagementAndyWANGLastDectheUSFDAplacedthePh2trialNCT04711148oforelabrutinib85236576288inRRMSpartiallyonholdbasedondrug-inducedliverinjurycasesandywangcmbicomhkobservedHoweverbeforethepausethemajority80ofenrolledStockDatapatientshadcompletedatleast70daysoftreatmentandcouldcontinuetheMktCapHKmn156142studyAccordingtoInnoCaremanagementtherewerenoactualliverAvg3mthstoHKmn131injuriesbutonlyaverylimitednumberoflivertransaminaseincreasesThe52wHighLowHK1550749increasesweretransitoryonlyhappenedduringthefirsttwomonthsofTotalIssuedSharesmn17643SourceFactSettreatmentandwererevisableComparedtotheMStrialofSanofisevobrutinib-26patientshadraisedliverenzymesand11discontinuedShareholdingStructurethestudythelivertoxicproblemoforelabrutinibseemsminimalHillhouseCapital118KingBridgeInvestments92InnoCaretargetstocontinuetheMSstudyAninterimanalysis12SourceCompanydataweeksoftreatmentoftheongoingPh2MStrialwasperformedwhiletheresultswerenotreleasedThetrialwasmainlyledbyInnoCarefromstartSharePerformanceAbsoluteRelativeInnoCarehasamendedandsubmittedtherevisedprotocoltotheUSFDA1-mth-429-408inJanuaryMonitoringfrequencyandenrolmentinclusioncriteriawouldbe3-mth-286-379themajorprotocolrevisionsInnoCareplanstoreleasethedataoftheMS6-mth-263-303trialin2Q23E24weeksoftreatmentandifpositivetoinitiateaPh3trialSourceFactSetInthefutureInnoCarestillexpectstocollaboratewithaglobalpartner12-mthPricePerformanceConcernremainsregardingthelivertoxicproblemsoforelabrutinibintreatingMSThereareconcernsthatBiogencouldhavemadeitsdecisionsbasedontheresultsofthefirstinterimanalysisoftheongoingMStrialwhichwerenotreleasedandonlyaccessibletoafewpeoplefromBiogenInnoCareHoweverorelabrutinibasasuccessfuloncologytherapywidelyusedforthetreatmentofCLLandMCLdoesnthavelivertoxiceffectsbasedontreatingthousandsofpatientswithhematologicmalignanciesWeSourceFactSetlookforwardtothedatareadoutofthePh2MStrialin2Q23EMaintainBUYOrelabrutinibisalsounderassessmentforthetreatmentofotherautoimmunediseasesincludingSLEITPandNMOSDParticularlybasedonpositivePoCdataonSLEapotentiallyregistrationalPh2bstudyofSLEhasbeenstartedWearestillinterestedinorelabrutinibspotentialforautoimmunediseasebesidesitssuccessinoncologyInnoCarehasasufficientRMB77bnnetcashasofSep2022WerevisedourTPfromHK2014toHK1084WACC1011terminalgrowthrate30EarningsSummaryYE31DecFY20AFY21AFY22EFY23EFY24ERevenueRMBmn110435989411509NetprofitRMBmn39165907581354EPSReportedRMB040005051033020RDexpensesRMBmn403722570600600AdminexpensesRMBmn89140179254362CAPEXRMBmn251166400200100SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk17Feb2023Figure1Risk-adjustedDCFvaluationDCFValuationinRMBmn2022E2023E2024E2025E2026E2027E2028E2029E2030E2031E2032E2033E2034E2035EEBIT1037711473335495184176679112516191969230225252699Taxrate0000001515151515151515EBIT1-taxrate103771147333549518415057795613761674195721462294DA1313131313131313131313131313-Changeinworkingcapital218822233753173123313042621901266090131-Capex400200100100100100100100100100100100100100FCFF12068153374726542394794113114791713193019702076Terminalvalue30090FCFTerminalvalue120681533747265423947941131147917131930197032166PresentvalueofenterpriseRMBmn9536NetDebt-6767Minorities44EquityvalueRMBmn16259CorporatevalueHKmn19128ofsharesoutstandingmn1764TPpershareHK1084Terminalgrowthrate300WACC1011CostofEquity128CostofDebt450EquityBeta090RiskFreeRate200MarketRiskPremium1200TargetDebttoAssetratio3000EffectiveCorporateTaxRate1500SourceCMBIGMestimatesFigure2SensitivityanalysisHKWACC1924911961101110611111400142012861175108310043501342122511261043972Terminalgrowthrate3001277117310841009943250122211281048978918200117510891015952896SourceCMBIGMestimatesFigure3CMBIGMestimatesrevisionNewOldDiffRMBmnFY22EFY23EFY24EFY22EFY23EFY24EFY22EFY23EFY24ERevenue598941150965514162065-9-34-27GrossProfit449744119953011611714-15-36-30OperatingProfit855587361946168281NANANANetprofit916590364965172235NANANAEPSRMB051033020054009014NANANAGrossMargin790079007950820082008300-300ppt-300ppt-350pptSourceCompanydataCMBIGMestimatesFigure4CMBIGMestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY22EFY23EFY24EFY22EFY23EFY24EFY22EFY23EFY24ERevenue598941150960712942030-1-27-26GrossProfit449744119949611191736-10-34-31OperatingProfit855587361817445100NANANANetprofit91659036479533811NANANAEPSRMB051033020047023005NANANAGrossMargin750079007950817286508551-672ppt-750ppt-601pptSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE217Feb2023FinancialSummaryINCOMESTATEMENT2019A2020A2021A2022E2023E2024EYE31DecRMBmnRevenue1110435989411509Costofgoodssold0066150198309Grossprofit119774497441199Operatingexpenses4405941212148114941713Sellingexpense368298422640951Adminexpense6489140179254362RDexpense213403722570600600Others16034523100200Otherincome104271218177164153Otherexpense213444GainlossonfinancialassetsatFVTPL18146903000ShareoflossesprofitsofassociatesJV0011800Pre-taxprofit215039220916590364Incometax0047000Aftertaxprofit215039267916590364Minorityinterest902101010Netprofit214139165906580354BALANCESHEET2019A2020A2021A2022E2023E2024EYE31DecRMBmnCurrentassets240940926417880481627828Cashequivalents229239705929654158455417Accountreceivables0045152645Inventories0210131828FinancialassetsatFVTPL800317216721672167Othercurrentassets3712111668107171Non-currentassets207445980135015371624PPE4830643082010091099Right-of-useassets8697136134132130InvestmentinJVsassos1121444Intangibles373734343333Goodwill333333Othernon-currentassets311356356356356Totalassets2616453873981015396999452Currentliabilities66104329472609926Short-termborrowings000000Accountpayables8685103136212Othercurrentliabilities5192218343446686Leaseliabilities6720202020Contractliabilities007777Non-currentliabilities549812731409214921491949Long-termborrowings000000Convertiblebonds111711501201194119411741Deferredincome157100124124124124Othernon-currentliabilities42232385858585Totalliabilities556313771739262227582875Sharecapital000000Otherreserves300531045605748769076553Totalshareholdersequity300531045605748769076553Minorityinterest575654443424Totalequityandliabilities2616453873981015396999452PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE317Feb2023CASHFLOW2019A2020A2021A2022E2023E2024EYE31DecRMBmnOperatingProfitbeforetaxation215046420916590364Depreciationamortization1210101010Taxpaid000000Changeinworkingcapital215712021882223Others204834657238118306Netcashfromoperations80173167450615437InvestingCapitalexpenditure75251166400200100Netproceedsfromdisposalofshort-term198891637184800investmentsOthers1033373125124113Netcashfrominvesting471107173021247613FinancingDividendpaid000000Netborrowings5090000Proceedsfromshareissues42222532562318900Others9617444Netcashfromfinancing36322382545318644NetchangeincashCashatthebeginningoftheyear124515942301592965415845Exchangedifference1825245000Cashattheendoftheyear159423015929654158455417GROWTH2019A2020A2021A2022E2023E2024EYE31DecRevenue22994763687426573603Grossprofit22994715544541657613PROFITABILITY2019A2020A2021A2022E2023E2024EYE31DecGrossprofitmargin10001000937750790795ReturnonequityROEna7883151388153GEARINGLIQUIDITYACTIVITIES2019A2020A2021A2022E2023E2024EYE31DecCurrentratiox36739219518613485Receivableturnoverdays000099129139149Inventoryturnoverdays0000328328328328Payableturnoverdays00002505250525052505VALUATION2019A2020A2021A2022E2023E2024EYE31DecSourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE417Feb2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE5