Hutchison China MediTech

US: HCM

$2465.4m market cap

$17.85 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

Hutchison China MediTech’s (HCM’s) investment case is focused on evolution into a global R&D and commercial-stage biopharma company with a marketed portfolio of innovation-led oncology drugs. 2020 is a golden year as HCM moves towards multiple domestic drug launches and is progressing key assets into registration studies globally. We expect surufatinib (NET) and savolitinib (exon 14 deletion NSCLC) China launches in 2020 and 2021, respectively, following in the footsteps of Elunate (thirdline CRC), which is establishing its presence by its inclusion on the National Reimbursement Drug List. HCM is investing in its oncology commercial presence in China and its global clinical and regulatory capabilities (in the US, Europe and Japan). 2022 and 2023 should benefit from global drug launches providing continued pipeline progression. We value HCM at $5.9bn.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2018A 214.1 (89.0) (86.7) (11.3) N/A N/A
2019A 204.9 (141.3) (141.1) (15.9) N/A N/A
2020E 216.8 (191.9) (195.6) (23.3) N/A N/A
2021E 287.9 (183.5) (198.6) (23.9) N/A N/A
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, as the oncology pipeline comes to fruition we expect HCM to become a major oncology company globally.

Last updated on 31/03/2020
Sector
Healthcare
Share price graph
Balance sheet
Forecast net cash (US$m) 146.7
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (23.5) (28.8) (41.6)
Relative* (12.5) (11.0) (36.0)
52-week high/low US$31.8/US$15.2
*% 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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