研究报告全文：MN30Mar2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateInnoventBiologics1801HKRevenuegrowthtorecoverin2023InFY22InnoventrecordedtotalrevenueofRMB456bnincludingRMB414bninTargetPriceHK5034productsales3YoYAccordingtoEliLillysintilimabsalesinFY22wasPreviousTPHK5259US293mn-30YoYmainlyimpactedbyNRDLrelatedpricecutCOVID-19UpDownside447interruptionsandcommercialteamrestructuringearly2022UnderIFRSthegrossCurrentPriceHK3480marginofproductsalesdecreasedby99pptto775inFY22duetothepricecutofsintilimabincreasedproportionofsalesfromlower-marginbiosimilarsandlowerChinaHealthcaremarginbookedbycollaboratedproductsHowevertheproductGPmarginJillWUCFAimprovedin2H22781vs1H22769InFY22theCompanywasableto85239000842improveitscostefficiencywiththeratioofsellingandmarketingexpensetoproductjillwucmbicomhkrevenuedecreasedfrom655inFY21to626inFY22andnotablytheratioAndyWANGdecreasedin2H22569comparedto1H22685TheRDexpenses85236576288increased236YoYtoRMB287bninFY22TheCompanyrecordednetlossofandywangcmbicomhkRMB218bninFY22comparedtotherestatedlossofRMB273bninFY21Asofend-2022InnoventhadastrongcashbalanceofRMB917bnStockDataMktCapHKmn53402Toresumestrongproductsalesgrowthfrom2023ESintilimabhastwoAvg3mthstoHKmn32273additionallargeindications1LGCand1LESCCaddedtotheNRDLsince52wHighLowHK47951806Mar2023WithstablepricingandbetterNRDLcoverageweexpectsalesofTotalIssuedSharesmn1535SourceFactSetsintilimabtoresumehealthygrowthin2023E20YoYInnoventsthreebiosimilarscontributedasignificantproportionoftotalproductrevenueinFY22ShareholdingStructureapproximately50Wedonotexpectnationwidevolume-basedprocurementTemasekHoldings79VBPforbiosimilarsin2023whileprovincialVBPcouldleadtomoderatepriceYuDe-ChaoMichael69SourceHKExcutsWithCOVID-19impactdiminishingandcontributionfromnewproductssuchascyramzapemigatinibandolverembatinibweexpectInnoventtoregainSharePerformancesolidsalesgrowthin2023andbeyondAbsoluteRelative1-mth-18-38EyesondatareadoutofIBI362GLP-1RGCGRIBI362istargetingan3-mth8964enormousunderservedmarketofobesityanddiabetesIBI362hasfourongoing6-mth496272clinicaltrialsThePh3trialGLORY-1ofIBI3626mgforobesityhasSourceFactSetcompletedenrolmentin1Q23andisexpectedtoreleasetoplinedatabyend-12-mthPricePerformance2023ThePh1btrialforobesity9mgisexpectedtoreleaseupdateddatabyend-2023andInnoventplanstostartaPh3trialofIBI3629mgthisyearOneofthetwoPh3trialsDREAMS-12forT2DMhasbeenfullyenrolledandtheotherisexpectedtocompleteenrolmentin2Q23WeexpectIBI362tobelaunchedinChinain2025EAdditionallyInnoventisplanningthetrialofIBI362forthetreatmentofNASHExpandingearly-stagepipelinestobeanengineforinnovationWithSourceFactSetpositivePoCdataobservedtheCompanywillreleaseupdateddataforIBI939TIGITandIBI110LAG-3attheASCOmeetingIBI363PD-1IL-2fusionproteinisexpectedtohavepreliminaryinternaldataforPD-L1resistantsolidAuditorDeloitteWebsitewwwinnoventbiocomtumorsin2H23In2022Innoventdelivered6moleculesintoINDenablingstageInnoventhasestablishedanintegratedanddifferentiatedADCplatformwith10ADCprojectsunderdevelopmentThein-housedevelopedIBI343CLDN182ADCisatPh1trialinAustraliaandChinawithtolerablesafetyandinitialefficacysignalsobservedIn2023aseriesofADCmoleculeswillenterclinicalstagedevelopmentincludingHER2B7H3andTrop2ADCsMaintainBUYWerevisedourDCF-basedTPfromHK5259toHK5034WACC100terminalgrowthrate30EarningsSummaryYE31DecFY21AFY22AFY23EFY24EFY25ERevenueRMBmn427045565311749810418YoYgrowth11167166412389NetprofitRMBmn3138217927871921476EPSReportedRMB216143182125031RDexpensesRMBmn24782871300029992917CAPEXRMBmn1066300300300300SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk30Mar2023Figure1Risk-adjustedDCFvaluationDCFValuationinRMBmn2023E2024E2025E2026E2027E2028E2029E2030E2031E2032E2033E2034E2035EEBIT-2829-1937-490136332945900820193251040110833109341085410730Taxrate00015151515151515151515EBIT1-taxrate-2829-1937-4901159280050156970792688419208929492269120DA232237242246250254258261265268271273276-Changeinworkingcapital9-16588-635-687-822-632-304-2448222104121-Capex-300-300-300-300-300-300-300-300-300-300-300-300-300FCFF-2887-2165-460470206341486296758385619258928793039217Terminalvalue135936FCFTerminalvalue-2887-2165-46047020634148629675838561925892879303145153PVofenterpriseRMBmn61529NetdebtRMBmn-4134EquityvalueRMBmn65663EquityvalueHKmn77251Noofoutstandingsharesmn1535DCFpershareHK5034Terminalgrowthrate30WACC100CostofEquity133CostofDebt45EquityBeta10RiskFreeRate28MarketRiskPremium105TargetDebttoAssetratio350EffectiveCorporateTaxRate150SourceCMBIGMestimatesFigure2SensitivityanalysisHKWACC5034909510010511040700562225574502945653565445859528347934372Terminalgrowthrate306161555250344589420225583652894818441040532055595061463042523920SourceCompanydataCMBIGMestimatesFigure3CMBIGMestimatesrevisionNewOldDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY22EFY23EFY24ERevenue53117498104186001857711963-11-13-13Grossprofit427960798497480069489810-11-13-13Operatingprofit2306136414914282331391NANANANetprofit278719214761816663803NANANAEPSRMB182125031119043053NANANAGrossmargin805781078157800081008200057ppt007ppt-043pptSourceCompanydataCMBIGMestimatesFigure4CMBIGMestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY22EFY23EFY24ERevenue53117498104186220811010715-15-8-3Grossprofit427960798497497565508557-14-7-1Operatingprofit2306136414919561053362NANANANetprofit278719214761674691246NANANAEPSRMB182125031110041017NANANAGrossmargin805781078157799980767986058ppt030ppt171pptSourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE230Mar2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecRMBmnRevenue3844427045565311749810418Costofgoodssold388573931103214201920Grossprofit345636973625427960798497Operatingexpenses431567485796706580008973Sellingexpense134127282591292135244271Adminexpense43788483592111501389RDexpense185124782871300029992917Others686657502224326396Pre-taxprofit8593051217027871921476Incometax140879000Minorityinterest000000Netprofit9983138217927871921476BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecRMBmnCurrentassets94671155111507966189369806Cashequivalents776483779163736363647183Accountreceivables47596857582710651337Inventories7061347142911311167947FinancialassetsatFVTPL3576453333Othercurrentassets165213337337337337Non-currentassets236846936082615062126270PPE158426933411349735773653Intangibles337721198119811981198Othernon-currentassets75212281472145514371420Totalassets118351624417589158111514816077Currentliabilities148630503499346235713711Short-termborrowings255365888888888888Accountpayables121195326289397537Taxpayable0613333Othercurrentliabilities111024292282228222822282Non-currentliabilities156928633360336133623363Long-termborrowings92520232215221522152215Obligationsunderfinanceleases108699100101102Othernon-currentliabilities6347541046104610461046Totalliabilities305559136859682369327073Sharecapital000000Otherreserves87801033010730898882169004Totalshareholdersequity87801033010730898882169004Minorityinterest000000Totalequityandliabilities118351624417589158111514816077PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE330Mar2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecRMBmnOperatingProfitbeforetaxation7192964216227871921476Depreciationamortization68165210215220224Taxpaid140879000Changeinworkingcapital33490168916588Others8179511061102111521269Netcashfromoperations308202573215427151105InvestingCapitalexpenditure4891066300300300300Acquisitionofsubsidiariesinvestments6380000Netproceedsfromdisposalofshort-term1200112121500000investmentsOthers7311105270157130129Netcashfrominvesting51852698200143170171FinancingDividendpaid000000Netborrowings35512080000Proceedsfromshareissues466239512077000Others105155102115115115Netcashfromfinancing491250031975115115115NetchangeincashCashatthebeginningoftheyear423377648377916373636364Exchangedifference5691970000Cashattheendoftheyear308378479820736363647183GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue266911167166412389Grossprofit27467019180421398PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin899866796806811816ReturnonequityROE14832820728322355GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecNetdebttoequityx070606050404Currentratiox643833282526Receivableturnoverdays343617618568518468Inventoryturnoverdays500965385442400030001800Payableturnoverdays96410051021102110211021VALUATION2020A2021A2022A2023E2024E2025EYE31DecPB649237566156SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE430Mar2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE5