Goldman Sachs Backs Innovent 'Buy' Rating on 30% Revenue Growth

Edgen Stock·Mar 27 2026, 03:54

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Key Takeaways

Goldman Sachs reaffirmed its 'Buy' rating for Innovent Bio following a strong second-half performance where revenues beat expectations. However, rising operating costs prompted the bank to lower its earnings forecasts and make a marginal adjustment to its price target, signaling a focus on future profitability.

Innovent Bio's revenue for the second half of last year grew 30% year-over-year to RMB 7.09 billion, surpassing analyst expectations of RMB 6.83 billion.
Operating expenses increased 33% to RMB 6.2 billion as the company invested in expanding its commercial team and resumed growth in R&D spending.
Goldman Sachs maintained its 'Buy' rating but slightly lowered its target price to HKD 102.84, while cutting its current-year EPS forecast to RMB 0.99.

Innovent Revenue Climbs 30% to RMB 7.09 Billion

Innovent Bio (01801.HK) reported robust financial results for the second half of last year, with revenue reaching RMB 7.09 billion, a 30% increase year-over-year. This performance, driven primarily by strong licensing revenue, exceeded Goldman Sachs' forecast of RMB 6.83 billion. The company's management team reiterated its confidence in achieving its long-term sales goal, targeting RMB 20 billion in product sales revenue by 2027.

Rising Costs Prompt Minor HKD 102.84 Target Price Trim

Despite the strong top-line growth, Innovent's operating expenses also escalated, increasing 33% year-over-year to RMB 6.2 billion. This figure was higher than the bank's projection of RMB 5.7 billion, attributed to strategic investments in expanding the commercial team and a resumption of growth in research and development expenditures. In response to the higher cost base, Goldman Sachs lowered its earnings per share (EPS) forecasts for the current and next year to RMB 0.99 and RMB 2.46, respectively.

Reflecting these revised profit estimates, the bank adjusted its target price for Innovent Bio minimally, from HKD 102.85 to HKD 102.84. Crucially, it maintained its 'Buy' rating on the stock, indicating continued conviction in the company's long-term growth prospects despite the near-term pressure on profitability. This sentiment is shared by other analysts, with Citi holding a 'Buy' rating and a higher target price of HKD 115.