Innovent Earnings: 2024 Revenue Is a Strong Beat; Raise Valuation by 8%; Shares Undervalued

Innovent’s 2024 revenue CNY 9.4 billion, up 51.8% year on year, is a strong beat to our estimate of CNY 7.8 billion. The positive surprise is largely attributable to a faster ramp-up from its new-product launches and high license income, CNY 0.6 billion more than what we had forecast. After adjustments, we bring forward profitability by two years to 2025. We raised our fair value estimate to HKD 58.10 per share from HKD 54.0. While it is positive that management decided to expand its global pipeline and conduct more overseas clinical trials, that will not have a material impact on our valuation yet, as these pipelines are still in the very early stages. Despite a strong rally of 16% after earnings, we still view shares as modestly cheap.