Hansoh booked strong BD income in 1H25. Hansoh’s revenue reached
　　RMB7.43bn (+14.3% YoY) and attributable net income was RMB3.14bn (+33.4% YoY) in 1H25, accounting for 56% and 72% of our previous full- year expectation, respectively. Product sales grew 15.0% YoY to RMB10.69bn, driven by strong momentum in innovative drugs, especially aumolertinib. Excluding collaboration revenue, sales of innovative drugs rose by 23.7% YoY to RMB4.49bn (44% of our previous full-year estimate).
　　We remain confident that Hansoh is on track to achieve its FY25 target of over RMB10bn in innovative drug sales, representing 25%+ YoY growth.
　　Hansoh booked RMB1.66bn BD income in 1H25, which was mainly contributed by the upfront payment from MSD and milestone payment from GSK. Hansoh is scheduled to record another US$80mn upfront payment from Regeneron in 2H25.
　　Sustainable profit from overseas out-licensing. Following out-licensing
　　of two ADC assets to GSK in 2023, Hansoh granted rights to HS-10535 (oral GLP-1) to MSD in late 2024. Most recently, in Jun 2025, Hansoh out- licensed its GLP-1/GIP asset (HS-20094) to Regeneron. In 1H25, 8 assets entered clinic, including BTK inhibitor, EGFR/c-Met ADC, SEZ6 ADC, KRAS G12D inhibitor, and PCSK9 mAb. With a robust innovative pipeline, we expect out-licensing to be a sustainable source of profit for Hansoh.
　　Development progress for innovative assets remains on track. HS-
　　20093 (B7-H3 ADC) is currently undergoing Ph3 trials for 2L SCLC in both China and overseas, along with a separate Ph3 trial in osteosarcoma in China. HS-20089 (B7-H4 ADC), one of the leading global candidates in its class, has entered Ph3 trials in China for ovarian cancer, while GSK is conducting Ph1/2 studies overseas, with pivotal trials planned for 2026. HS- 10535 (oral GLP-1) is expected to enter clinical trials under MSD’s development this year. HS-20094 (GLP-1/GIP) has advanced to a Ph3 trial in China for obesity, and Regeneron plans to initiate its Ph3 study in 2026.
　　Further sales growth from aumolertinib supported by indication
　　expansion. We expect aumolertinib to deliver strong sales growth driven by ongoing market share gains in 1L NSCLC and approvals of new indications.
　　Aumolertinib may have two additional NRDL inclusions in early 2026: adjuvant therapy and maintenance therapy for locally advanced EGFRm NSCLC. Aumolertinib is the first domestic EGFR-TKI approved for these two indications. The NDA for aumolertinib in combo with chemo for 1L NSCLC is anticipated to be approved in 2H25. In parallel, aumolertinib is being assessed in multiple Ph3 studies to combo with c-Met inhibitor and EGFR/c- Met bsAb. Overall, we believe aumolertinib will achieve the sales target of RMB6.0bn in 2025, with its peak sales to exceed RMB8.0bn.
　　Maintain BUY. We expect Hansoh’s revenue to grow 20%/4% YoY in FY25E/26E. We think BD income will become sustainable in the future. We expect Hansoh’s net profit to increase 14% / decrease 2.7% in FY25E and FY26E, respectively. We raised our DCF-based TP from HK$25.24 to HK$45.26 (WACC: 8.13%, terminal growth rate: 4.5%), to reflect stronger- than-expected BD income.