Hutchison China MediTech

US: HCM

£2330m market cap

361.5p 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 (HCM) has built a substantial pipeline of potentially first- or best-in-class tyrosine kinase inhibitor drugs, some of which are in development with strategic partners. HCM has announced that key late-stage asset surufatinib met the primary endpoint of PFS in non-pancreatic NET, translating into an earlier than expected China NDA submission (filed in November) and the potential launch of HCM’s first unpartnered asset (late 2020). We forecast two further product launches on the horizon in 2021/22 (China launch of fruquintinib in gastric cancer and global launch of savolitinib in NSCLC). Inclusion of fruquintinib in China’s NRDL (potentially Q419) presents another near-term inflection. At 30 June 2019, HCM had net cash of $237.3m.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 241.2 (50.7) (53.5) (4.3) N/A N/A
2018A 214.1 (89.0) (86.7) (11.3) N/A N/A
2019E 182.9 (144.8) (147.0) (17.7) N/A N/A
2020E 194.6 (189.2) (195.4) (24.7) 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 04/07/2019
Sector
Healthcare
Share price graph
Balance sheet
Forecast net cash (US$m) 163
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 5.9 (16.4) (19.7)
Relative* 3.5 (17.1) (20.2)
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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