1H26 Sales In-line, Adj. NP Above; Next Catalyst PD-1/VEGF Update at ESMO

Research evidence excerpt

Not for redistribution without written consent of Morgan Stanley

M

Update

August 21, 2026 02:20 AM GMT

Morgan Stanley Asia Limited+

3SBio | Asia Pacific

Alexis Yan, CFA

Equity Analyst

1H26 Sales In-line, Adj. NP

Above; Next Catalyst PD-1/

VEGF Update at ESMO

3SBio (1530.HK, 1530 HK)

China Healthcare | China

AlphaSignals Earnings Reaction

Unchanged

In-line

Largely unchanged

Impact to our thesis

Financial results versus consensus

Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

Key Takeaways

1H product sales -19% YoY, in line with MSe, due to competition for legacy drugs

and VAT. CDMO revenue was +161% YoY, including '707 supply to Pfizer.

Adj. NP rose 26.5% YoY to Rmb1.44bn, above MSe, due to BD revenue and cost

control. Ex-BD, GPM was -5.2ppt, and SG&A/R&D ratios were -3.5/+6ppt YoY.

'707 will have China Phase II data in 1L NSCLC (+chemo) presented at ESMO. Two

more Ph3 trial starts by Pfizer in 2H26 will trigger milestones to 3SBio.

New products (3 approved YTD, 5 in NDA) and overseas expansion to buffer

existing drug pressures, but will take time for total drug sales to resume growth.

3SBio had Rmb19.4bn cash and financial assets as of Jun'26, leaving flexibility for

new product sourcing, R&D spending and shareholder returns.

Stock Rating

Industry View

Price target

Up/downside to price target (%)

Shr price, close (Aug 20, 2026)

52-Week Range

Sh out, dil, curr (mn)

Mkt cap, curr (mn)

EV, curr (mn)

Overweight

Attractive

HK$30.50

85

HK$16.50

HK$36.80-14.81

2,538

Rmb35,913

Rmb21,856

Fiscal Year Ending

12/25 12/26e 12/27e 12/28e

EPS (Rmb)**

Revenue, net (Rmb mn)

EBITDA (Rmb mn)

ModelWare net inc

(Rmb mn)

P/E

P/BV

RNOA (%)

ROE (%)

EV/EBITDA

Div yld (%)

FCF yld ratio (%)

Leverage (EOP) (%)

3.47

17,696

10,772

8,482

1.22

9,373

3,675

3,094

1.19

9,242

3,510

3,032

1.28

9,899

3,732

3,261

6.3

2.0

39.1

54.9

3.6

1.1

12.7

(48.4)

11.6

1.2

12.8

11.4

5.0

0.0

6.5

(55.7)

11.8

1.1

12.6

9.9

4.6

0.0

3.2

(58.1)

11.0

1.0

12.8

9.7

3.4

0.0

6.0

(62.7)

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

** = Based on consensus methodology

e = Morgan Stanley Research estimates

…