CICC: Maintain Rongchang Biotech(09995) Outperform Industry Rating, Upgrade Target Price to HKD 133.7

CICC released a research report, stating that considering the revenue recognition timing of the authorized cooperation income for Rongchang Biotech (09995), it raised 2026 net profit from 0.34 billion yuan to 4.235 billion yuan, and introduced a 2027 net profit forecast of 0.748 billion yuan. Considering the internationalization R&D acceleration for RC148 and performance improvement, based on a DCF valuation, the firm maintained a “outperform the industry” rating and raised its target price by 26.8% to HKD 133.7, representing 21.1% upside from the current share price.

The CICC’s main views are as follows:

2025 performance exceeded the firm’s expectations

The company announced its 2025 results: revenue was RMB 3.242 billion, up 89.55% year over year; net profit attributable to shareholders was RMB 0.710 billion, turning from a loss to a profit. Due to rapid scaling of product sales and continued progress in external licensing cooperation, the company’s performance exceeded the firm’s expectations.

Core product sales revenue continues to grow; expanding indications is expected to drive commercialization acceleration

According to the company’s announcement, the company’s domestic commercialization revenue in 2025 was RMB 2.271 billion, up 34% year over year; the gross margin of commercialization products was 84.3%, up 3.7 percentage points year over year. The company’s core product, Tetan Xip for severe myasthenia gravis, has been approved and listed; the applications for IgAN, Sjögren’s syndrome, and Vidicitomab in combination with first-line urothelial carcinoma have received NMPA acceptance. The firm believes that as new indications are approved one after another, sales revenue of commercialization products is expected to continue to grow.

Continued advancement of international cooperation; RC148’s global R&D is progressing rapidly

According to the announcement, the company reached a licensing agreement for RC148 with AbbVie; the Phase III clinical trial of combination chemotherapy as second-line non-small cell lung cancer and the Phase II clinical trial of combination chemotherapy for second-line solid tumors have obtained FDA approval. According to a news release from AbbVie, RC148 is expected to explore combination treatment regimens with multiple ADCs, including Temab-A. Based on the clinical resources and pipeline accumulation of AbbVie as the collaboration partner, the firm believes that RC148’s global R&D is likely to accelerate, enhancing the value ceiling.

Innovative technology platforms continue to iterate; the next-generation innovative molecules have become a tier

In the autoimmune field, the company has laid out next-generation bispecific/ trispecific antibodies and TCE molecules. The firm believes that new technology pathway candidates are expected to consolidate the company’s competitive strength in the autoimmune field. In the oncology field, based on the company’s extensive experience in the ADC field, it continues to make breakthroughs in next-generation toxins and conjugation technologies, and has also positioned trispecific TCE to broaden the boundaries of treatment. According to the company’s announcement, RC278 has entered dose ramp-up and target dose expansion studies, RC288 has been approved for IND, and its pioneering PR-ADC payload recovery platform will release data at the 2026 AACR. The firm believes the company’s next-generation molecules have become a tier, laying a solid foundation for long-term development.

Risk warning: risk of R&D failure; risk of intensifying competition; risk that project collaboration falls short of expectations.

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