Hengrui Valuation reset creates re-entry opportunity; upgrade H-shares to OW

Research evidence excerpt

Hengrui Valuation reset creates re-entry opportunity; upgrade H-shares to OW

J P M O R G A N Asia Pacific Equity Research

15 June 2026

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Hengrui

Valuation reset creates re-entry opportunity; upgrade H-

shares to OW

We upgrade Hengrui H-shares to OW from Neutral. The stock has declined from Healthcare

ACa 52-week high of HK$95 to trade at HK$53, a correction of about 40% (vs the Yang Huang

CSI300 Health down 32% over the same period) that we attribute primarily to (852) 2800 3812

sector-wide sentiment deterioration in China healthcare rather than material yang.huang@jpmorgan.com

changes in Hengrui’s fundamental outlook. The recent sell-off reflects macro J.P.MorganMorganBrokingSecurities(Hong (AsiaKong)Pacific)LimitedLimited/ J.P.

headwinds, including expanding US-China geopolitical tensions and broad

Eric Zhao, CFA

institutional de-risking of H-share healthcare exposure, which has re-rated the (86-21) 6106 6256

sector rather than penalized Hengrui specifically. At current levels, the H-share/A- eric.zhao@jpmorgan.com

share stock trades at approximately 33x/34x forward PE, more than two standard SAC Registration Number: S1730524050001

deviations below the historical mean and no longer adequately reflects the J.P. Morgan Securities (China) Company Limited

company’s improving earnings trajectory, rapidly expanding pipeline value, and Derek Choi

long-term BD related income. Nonetheless, we trim our longer term forecasts for (852) 2800-8744