Jiangsu Hengrui Medicine (600276) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached RMB 13.60 billion, up 21.78% year-over-year; net profit attributable to shareholders was RMB 3.43 billion, up 48.67% year-over-year.

• Excluding non-recurring items, net profit was RMB 3.49 billion, up 55.58% year-over-year.

• Operating cash flow was RMB 3.03 billion, up 5.47% year-over-year.

• Innovation-driven growth: innovative drug revenue (excluding out-licensing) reached RMB 6.61 billion, up 33% year-over-year.

• Received €160 million (RMB 1.6 billion) upfront from Merck Healthcare for out-licensing, recognized as income in the period.

Financial highlights

• Basic and diluted EPS were RMB 0.54, up 50% year-over-year.

• Gross margin improved as innovative drugs expanded, despite generic drug revenue decline due to volume-based procurement.

• R&D investment totaled RMB 3.86 billion, with RMB 3.04 billion expensed, maintaining a high R&D intensity.

• Net assets attributable to shareholders at period-end: RMB 42.62 billion, up 5.33% from year-end 2023.

• Total assets: RMB 48.18 billion, up 10.04% from year-end 2023.

Outlook and guidance

• Company expects continued growth in innovative drug revenue, driven by new launches and expanded indications.

• Will continue to invest heavily in R&D and internationalization, with a focus on pipeline expansion and global clinical trials.

• Anticipates ongoing pressure on generic drug sales from national and local procurement policies.