Hengrui Pharmaceutical (01276) Growth Structure Changes: Second Curve Accelerates Global Value Release

On August 19, Hengrui Pharmaceutical (01276) handed over a resilient semi-annual report card. During the period, the company's revenue was 15.456 billion yuan, net profit attributable to mother was 4.465 billion yuan, and the share of innovative drug revenue exceeded 63%. Through the surface of financial figures, a more profound “declaration of qualitative change” has already been presented — the Age of Discovery of Innovative Drugs has just begun.

What is more noteworthy is that Hengrui's growth structure is changing. In the first half of the year, the company's sales revenue for innovative non-oncology drugs reached 2,545 billion yuan, an increase of 73.97% over the previous year, and the share of innovative drug sales revenue increased further to 28.89%. Innovative products in the fields of metabolism, autoimmunity, cardiovascular, etc. are being commercialized at an accelerated pace, growth momentum outside of tumors continues to increase, and a “second growth curve” represented by innovative non-tumor drugs is being formed at an accelerated pace. At the same time, global cooperation continues to advance, providing more paths for the global development and value realization of innovative assets. Meanwhile, the 10 billion dollar global strategic cooperation is expanding the company's value boundaries from China to the world, opening up a new space for international value.

The simultaneous implementation of three structural breakthroughs is undoubtedly Hengrui Pharmaceutical's evolutionary path. Market analysts believe that China's biomedical industry is undergoing a transformation from a “valuation depression” to a “value exporter.” This transformation will not happen at a uniform pace, nor will it happen universally. It will be pioneered by companies that dare to define themselves with global standards and embrace the global ecosystem with a cooperative attitude. Hengrui Pharmaceutical is just such a sample. What it reveals is far more than the financial performance of a company — this is a vivid footnote on the transition of a Chinese innovative drug leader from a “catcher” to a “co-builder,” and a company that can complete transformation and upgrading will define the next decade of China's biomedical industry.

Crossing the tipping point: Innovative drugs lead the high-quality conversion of old and new kinetic energy with 63%

63.16% is the proportion of Hengrui Pharmaceutical's innovative drugs in drug sales revenue in the first half of 2026. The realization of this figure announced the gradual establishment of a new pattern of the company's revenue structure with innovative drugs as the absolute main force.

The Zhitong Finance App believes that this is an active transformation with a strategic rhythm. During the reporting period, generic drug revenue was 5.139 billion yuan, a year-on-year decrease of 16.1%, and its share of drug sales revenue fell to 36.8% from 44.7% in the same period last year. Revenue declined due to local collection implementation of butorphinol and heptafluorane, and shrank further after the price reduction of contract renewal varieties such as albumin and paclitaxel. At the same time, the company also strategically reduced resource investment in some generic drugs. Three factors are combined, and the generic drug business is withdrawing from the revenue center in an orderly manner in a controlled manner. But that's not entirely

Instead of being passively pressured, the company actively switched its limited commercialization efforts to strategic choices for innovative products with high clinical value.

An innovative business that takes over the main force of growth will complete its mission with a strong attitude. Revenue from innovative drugs was 8.809 billion yuan, an increase of 16.37% over the previous year. Anti-tumor products are still the basic market. Revenue from innovative anti-cancer products in the first half of the year was 6.265 billion yuan, an increase of 2.58% over the previous year, accounting for 71.11% of the sales revenue of innovative drugs. Among them, core products such as the innovative drugs reverulamide (second-generation AR antagonist) and darucilide (CDK4/6 inhibitor) within health insurance maintained strong growth, and Ruikang trastuzumab (HER2 ADC), which was newly included in the national health insurance catalogue, achieved relatively rapid release.

The real highlights come from the non-oncology sector. In the first half of the year, sales revenue for innovative non-oncology drugs was 2,545 billion yuan, a year-on-year increase of 73.97%, accounting for 28.89% of innovative drug sales revenue. In the field of metabolism, the SGLT2 inhibitor (SGLT2 inhibitor) has become the second-largest SGLT2 inhibitor in the domestic market; the self-exempt products emaxitinib (JAK1 inhibitor), funacizumab (IL-17A inhibitor), and the cardiovascular product ricasimab (PCSK9 inhibitor) all achieved rapid growth after being newly included in national health insurance.

The growth pattern that forms two-wheel drive is gradually taking shape. As the share of innovative drug sales continues to rise, the company's revenue structure is further skewed towards innovative drugs, and the optimization of the revenue structure has substantially been transformed into an improvement in the profit structure. The conversion of old and new kinetic energy was not only handed over in terms of total quantity, but also verified in terms of quality.

What supports the long-term stability of this structure is the underlying foundation of the company's pipeline thickness and R&D strength. In the first half of the year, Hengrui Pharmaceutical invested 4.605 billion yuan in R&D, an increase of 18.96% over the previous year, accounting for 29.8% of revenue. By the end of the reporting period, the company had 9 domestic listing applications accepted by the State Drug Administration, and 17 clinical studies had advanced to Phase III. From ADC and dual antibodies to small-molecule targeted drugs, diversified technology platforms and differentiated target layouts have established a sustainable innovative output mechanism to ensure that 63% of the share has continuous upward momentum.

The point of the tipping point is that once crossed, it is irreversible. When innovative drugs officially changed from incremental supplements to revenue earners, Hengrui Pharmaceutical has completed remodeling its identity from a generic drug giant to an innovative drug leader. Further changes in the share of innovative drug revenue in the future will depend on the growth of existing products and the continued transformation of R&D pipelines.

Open up growth: the non-tumor sector is constructing a new pattern of multipolar growth at a growth rate of 74%

The share of innovative drugs exceeded 63%, once again verifying Hengrui Pharmaceuticals' strategic shift in revenue focus from the generic drug sector to the innovative drug sector. The 73.97% growth rate of the non-oncology sector verified the structural upgrade of the company's growth model from single product concentration to pipeline combination, opening up room for the market to reprice its growth ceiling from a single track valuation to a multi-track collaborative premium.

For a long time, the market's perception of Hengrui Pharmaceutical was highly anchored in the field of anti-tumor treatment. While this label highlights the company's core competitive advantage, it also conceals the large-scale value realization that is taking place on a broad track of metabolism, self-immunity, and cardiovascular events. In the first half of 2026, the company's non-oncology innovative drug revenue accounted for 30% of the total revenue of innovative drugs. This structural change means that Hengrui Pharmaceutical's growth equation is being completely restructured from “unipolar tumor drive” to “multipole collaborative effort”.

Judging from the segmented track, the three growth poles are forming a synergy.

The field of metabolism has entered a large-scale harvest period. Hengglizin (SGLT-2 inhibitor) has become a similar product with the second-largest market share in the domestic market. Varieties such as hengagliflozin metformin sustained-release tablets and reagliptin (DPP-4 inhibitors) have achieved rapid growth through accurate transmission of clinical advantages. Diabetes is one of the largest chronic disease markets in China. Hengrui Pharmaceutical's market share in this field has advanced from “category supplementation” to “main competition”, and commercial value is being released at an accelerated pace.

Self-exempt and cardiovascular products are newly included in medical insurance and are quickly dosed. Emaxitinib (JAK1 inhibitor), funacizumab (IL-17A inhibitor), and ricaximab (PCSK9 inhibitor) are all new products included in the national medical insurance catalogue in 2026, and quickly opened up the market with clear efficacy advantages. Self-defense and cardiovascular racing are all over 100 billion, and have been dominated by foreign brands for a long time. The rapid penetration of Hengrui Pharmaceutical products marks that innovative domestic drugs are achieving substantial breakthroughs in these fields.

The anesthesiology and analgesia segment maintained steady growth, and products such as rimazolam and tegillidine fumarate continued to contribute revenue, further enriching the revenue composition of the non-tumor segment.

The 73.97% increase did not come from a single product, but from the combined contributions of various treatment fields such as metabolism, self-immunity, cardiovascular, and anesthetic analgesia. Hengglizin has become the SGLT2 inhibitor with the second highest market share in the domestic market. Products such as emaxitinib, funazizumab, and ricasimab achieved rapid growth after being included in national health insurance, and the commercialization base for innovative non-tumor drugs was further broadened. Now that multiple tracks such as relief, self-immunity, cardiovascular, anaesthesia and analgesia have entered the harvest period at the same time, Hengrui Pharmaceutical's growth logic has been upgraded from “single track drive” to “combined benefit realization”. The 73.97% growth rate is a direct quantitative expression of the fulfillment of this new pattern.

Reshaping the valuation anchor: 10 billion dollar global cooperation opens up new space for international value

If the 73.97% growth rate of the non-oncology sector completed Hengrui Pharmaceutical's “structured upgrade” of growth from singleness to diversification, then the deepening advancement of the global strategy has begun a “systematic migration” of the company's valuation system from leading local premiums to global innovative asset pricing — the valuation anchor shifts from domestic market growth expectations to collaborative value revaluation in the global industrial ecosystem.

The 10 billion dollar strategic partnership is a landmark event of this value reshaping. In May 2026, Hengrui and BMS reached a global strategic cooperation to jointly promote 13 early projects, with a potential total transaction value of about US$15.2 billion. The cooperation model was upgraded from “single product licensing” to “platform-level strategic collaboration”, indicating that Hengrui Pharmaceutical's early R&D capabilities have been systematically recognized by the world's top pharmaceutical companies.

Foreign licensing cooperation has evolved from incidental transactions to a source of normalized revenue. Foreign licensing revenue of 1,422 billion yuan was confirmed during the reporting period. Continued overseas BD transactions have verified the steady increase in international recognition of the company's innovation pipeline. The “NewCo” model forms a second path for global value release. In terms of the NewCo model, Hengrui's NewCo partner Kailera Therapeutics landed on NASDAQ in April 2026, becoming one of the largest IPOs in the biotech sector at the time. According to the disclosure of the report, it was confirmed that the fair value change income of the company's shares during the reporting period was 821 million yuan. Meanwhile, BraveHeart Bio, another NewCo partner, also landed on NASDAQ in August 2026. The significance of the NewCo model is that the company is expected to share the global development and commercialization value of products through various methods such as license payments, milestone payments, sales commissions, and equity interests. When the valuation logic of local pharmaceutical companies changed from “domestic market growth expectations” to “global innovative asset pricing,” the value ceiling was redefined.

In summary, China's biomedical industry is undergoing a transformation from a “valuation depression” to a “value exporter.” The completion of this transformation is bound not to be evenly distributed, but will be the first to be realized by companies that define R&D with global standards and integrate into the global industrial ecosystem with a cooperative attitude. Hengrui Pharmaceutical used this semi-annual report to prove itself as such a sample — from qualitative changes in revenue structure to restructuring growth drivers to global migration of valuation logic, its evolutionary path clearly points to a conclusion: when a local pharmaceutical company has the ability to price innovative assets on a global scale, its value boundary is no longer defined by a single market.