Citi raises the target price for Rongchang Biotechnology to HKD 35, sales meet expectations.

Jin10 reported on August 26 that Citigroup released a report indicating that Rongchang Biologics (09995.HK) had a revenue of 1.1 billion yuan in the first half of the year, a rise of 48% year-on-year; a net loss of 450 million yuan, compared to a net loss of 780 million yuan in the first half of 2024. As of the end of June this year, the company held approximately 1.3 billion yuan in cash and cash equivalents; the management's goal is to reduce losses by 50% by 2025 and achieve break-even in 2026. The bank updated its forecast, incorporating 574 million yuan in business development revenue for 2025; adjusting the earnings per share forecast for the fiscal years 2025 to 2027 to a loss of 0.68 yuan, a loss of 0.75 yuan, and a profit of 0.03 yuan, compared to the original forecast of a loss of 1.54 yuan, a loss of 0.8 yuan, and a loss of 0.01 yuan, with the target price raised from 32 Hong Kong dollars to 35 Hong Kong dollars. The bank believes that the company's sales in the first half of the year met expectations, but the current valuation reflects overly optimistic expectations about business expansion cooperation, maintaining a sell/high risk rating.