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<Research> UBS Upgrades CSPC PHARMA (01093.HK) to Buy, Says Valuation Yet to Reflect AI Drug R&D Strength
Recommend 9 Positive 14 Negative 5 |
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UBS said in a research report that CSPC PHARMA (01093.HK) is a pioneer in AI-aided drug discovery (AIDD) among leading pharmaceutical companies and, by total deal value, is the worlds largest out-licensor of AIDD platforms. The broker believes CSPC PHARMAs leadership in frontier technologies such as AI has not been fully reflected in its valuation. As a series of business development (BD) out-licensing deals are executed, downside risks in its traditional business have largely been priced in. The broker expects the companys 2026 organic revenue (excluding licensing income) to resume YoY growth of 3.8% (vs a YoY decline of 16.5% last year). UBS upgraded the rating on CSPC PHARMA from Neutral to Buy, while maintaining a TP of HKD10.9. UBS noted that CSPC PHARMA has so far entered into four licensing or collaboration agreements related to its AIDD platform, with a cumulative total deal value of USD27.7 billion, making it the worlds largest AIDD platform licensor. Among them, the collaboration with AstraZeneca PLC Ordinary Shares (AZN.US) is the most notable, validating the value of its AIDD platform. The broker expects multiple catalysts ahead, including the announcement of 1Q26 results on May 27, as well as clinical data readouts for key pipeline assets such as SYS6010 and KN026. Although UBS lowered its revenue forecast for this year by 10% due to a timing adjustment for the upfront payment from the AstraZeneca collaboration, it raised revenue forecasts for the following two years by 12% and 4%, respectively. It also revised its EPS forecasts for this year and next year to RMB0.61 and RMB0.59, respectively. The broker said the current share price is equivalent to 10.9x its 2027 forecast PE, well below the 26.7x average of China biopharma peers, indicating an attractive valuation.(da/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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