Hutchison China MediTech


£3006.3m market cap

4510p last close

Hutchison China MediTech (HCM) is an innovative China-based biopharma company targeting the global market for novel, highly selective oral oncology and immunology drugs. Its established China Healthcare business is growing ahead of the market. HCM is the healthcare arm of CK Hutchison (c 40% listed on AIM and NASDAQ).

Investment summary

HCM has built a substantial pipeline of potentially first-in-class or best-in-class tyrosine kinase inhibitor (TKI) drugs, some of which are in development with strategic partners. Following China registration approval from the National Medicinal Products Administration of China for the treatment of CRC (3L), commercial marketing of fruquintinib (Elunate) commenced in November 2018 (through partner Eli Lilly). HCM has also announced several new partnerships and plans to combine its antiangiogenic TKIs (surufatinib and fruquintinib) with immune checkpoint inhibitors (PD-1 antibodies), with a view to developing a best-in-class combination therapy for the treatment of solid tumours. At 31 December, HCM had net cash of $274.2m. After failing to reach the primary endpoint in the Phase III FALUCA trial, our valuation of HCM is under review.

Y/E Dec
Revenue (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2016A 216.1 (44.3) (47.4) 19.6 299.3 N/A
2017A 241.2 (50.7) (53.5) (43.3) N/A N/A
2018E 162.5 (94.8) (99.5) (109.5) N/A N/A
2019E 180.1 (113.9) (120.1) (139.4) N/A N/A
Last updated on 22/03/2019
Industry outlook

HCM’s profitable Chinese healthcare business continues to benefit from the fast-growing domestic market, while the clinical, regulatory and technological environments are highly conducive to novel drug development. In the longer term, if the oncology and immunology pipeline comes to fruition we expect HCM to become a major China and international oncology company.

Last updated on 22/03/2019
Share price graph
Balance sheet
Forecast net debt (US$m) N/A
Forecast gearing ratio (%) N/A
Price performance
Actual 18.7 8.9 (6.5)
Relative* 18.6 1.4 (8.8)
52-week high/low 5600.0p/3305.0p
*% relative to local index
Key management
Simon To Chairman
Christian Hogg CEO
Johnny Cheng CFO
Dr Weiguo Su Chief Scientific Officer
Mark Lee SVP, Corporate Fin & Dev.

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