3SBio delivered a strong performance in 2024. Revenue increased 16.5% YoY to RMB9.1bn, exceeding our estimates by 3.3%, driven by the continued robust growth of TPIAO, Mandi and other products. Attributable net profit increased by 34.9% YoY to RMB2.1bn, 9.1% above our forecast. 3SBio’s attributable NPM improved by 2.0 ppts, driven by 1.0 ppt increase in GPM and 2.3 ppts decrease in SG&A ratio. Additionally, the Company declared a 2024 dividend of HK$0.25 per share, implying a 26% payout ratio.
　　TPIAO maintains strong growth momentum. In 2024, TPIAO's sales increased 20.4% YoY to RMB5.1bn. By volume, its market share expanded to 34.3%, surpassing IL-11 for the first time to become the leading drug in China's thrombocytopenia treatment market. With stable pricing and increasing penetration in CIT indication, we anticipate continued robust growth momentum for TPIAO.
　　Expanding commercial portfolio through in-house R&D and business development. In 2024, 3SBio submitted NDAs for four novel therapies: SSS06, 608, TPIAO for CLDT indication, and Eltrombopag suspension. Looking ahead to 2025, additional NDA submissions are expected for Clascoterone (WS204) and 613 (IL-1β). Furthermore, 3SBio has expanded its pipeline through strategic in-licensing, acquiring four key assets: Semaglutide, Paclitaxel Oral Solution, Clifutinib Besylate, and a HER2 ADC. Notably, Paclitaxel Oral Solution has received NMPA approval, while Semaglutide, Clifutinib Besylate, and the HER2 ADC are currently in Ph3 studies, with anticipated NDA submissions in 2026E and 2027E.
　　707 (PD-1/VEGF) demonstrates global BIC potential. 707 is progressing rapidly, with four ongoing Ph2 clinical trials. Early data in NSCLC suggests global BIC potential, highlighting significant opportunities for international collaboration. The NMPA has approved a Ph3 trial evaluating 707 as a monotherapy in first-line PD-L1+ NSCLC. Additionally, 705 (PD-1/HER2), 706 (PD-1/PD-L1) and 626 (BDCA2) also have global potential, which are progressing through Ph1 trials. Among these, 626 (BDCA2) stands out as a promising candidate, with significant potential for treatment of SLE. 626 is currently the second most advanced anti-BDCA2 mAb in development globally, following Biogen’s Litifilimab, which has entered Ph3 trials after demonstrating positive Ph2 results. In Feb 2025, Biogen and Royalty Pharma announced a US$250mn collaboration deal for Litifilimab.
　　Maintain BUY. With a strong commercial portfolio and expanding pipeline, 3SBio remains well-positioned for sustainable long-term growth, in our view. We thus revise up our earnings forecasts and raise our TP from HK$9.91 to HK$14.18 based on an 11-year DCF model (WACC: 12.2%, terminal growth rate: 2.0%), indicating 13x 2025E PE.