Analysis of the Reasons for Hengrui Medicine's Popularity: Innovation-Driven Growth and International Breakthroughs

As a leading innovative pharmaceutical company in China, Hengrui Medicine (600276.SH) became a popular stock in the market in 2025, driven by multiple factors.

Hengrui Medicine’s GLP-1 weight-loss drug HRS9531 has become a market focus; the drug is expected to conduct clinical trials in the U.S. and undergo FDA review in 2025 [0]. This breakthrough comes amid the global boom in the weight-loss drug market, bringing huge market imagination space for the company. Meanwhile, the company has a rich pipeline of innovative drugs, with multiple products in Phase 3 clinical trials, and R&D investment continues to increase—R&D expenses reached RMB 3.871 billion in the first half of the year, with cumulative R&D investment approaching RMB 50 billion [0].

In the first three quarters of 2025, Hengrui Medicine achieved revenue of RMB 20.199 billion and net profit of RMB 4.62 billion, significantly exceeding market expectations [0]. More notably, the company has successfully transformed into an innovation-driven enterprise: revenue from innovative drugs accounts for 60.66%, with innovative drug sales revenue reaching RMB 7.57 billion [0]. This structural shift marks the company’s successful transition from a traditional generic drug enterprise to a leading innovative drug company.

Hengrui Medicine has achieved remarkable results in international BD transactions, reaching licensing cooperation agreements with international pharmaceutical giants like Merck and GSK, securing potential transaction amounts exceeding $10 billion [0]. The company successfully listed secondary on the Hong Kong Stock Exchange, raising approximately HK$11.4 billion and forming an ‘A+H’ dual capital platform [0], providing strong financial support for international development.

The policy environment for the pharmaceutical and biological sector continues to improve, and the prosperity of the innovative drug sector has increased [0]. Medical insurance policies have increased support for innovative drugs; multiple innovative drugs such as Rivoceranib and Dalpiciclib have achieved rapid volume growth under medical insurance support [0].

Hengrui Medicine’s transformation from generic drugs to innovative drugs has yielded results; over 60% of revenue from innovative drugs marks a fundamental shift in the company’s business model. This transformation not only enhances the company’s profitability but also reshapes the market’s valuation logic for the company—shifting from the valuation system of traditional pharmaceutical enterprises to that of innovative technology enterprises.

The company has made breakthroughs in AI intelligent manufacturing; the injection pen production line has achieved large-scale mass production, breaking foreign monopoly [0]. This reflects the company’s technical strength in pharmaceutical processes and intelligent manufacturing, laying a foundation for future cost control and large-scale production.

Cooperation with international giants like Merck and GSK is not only a financial gain but also verifies the international competitiveness of the company’s R&D pipeline. This cooperation model opens up the global market for Hengrui Medicine, reduces the risk of entering overseas markets, and provides a sustainable path for international development.

• The GLP-1 weight-loss drug market has huge potential; if HRS9531 is successfully launched, it will bring explosive growth
• Rich pipeline of innovative drugs, with multiple products in late clinical stages, expected to be launched one after another in the next few years
• Mature international cooperation model, sustainable overseas licensing revenue
• Continuous favorable policy environment for innovative drug development

• Innovative drug R&D has uncertainties; clinical trial results may fall short of expectations
• Medical insurance cost control pressure may affect the pricing and volume growth rate of innovative drugs
• Facing regulatory approval and market access challenges in the internationalization process
• Intensified industry competition, especially in the GLP-1 field

The popularity of Hengrui Medicine as a stock reflects the market’s recognition of the company’s successful innovative transformation. Through continuous R&D investment, international strategic layout, and business model transformation, the company has successfully transitioned from a traditional pharmaceutical enterprise to a leading innovative drug company. Currently, the annual stock price increase is 26.54%, the 52-week range is 42.40-74.04 yuan, and 23 analysts have given strong buy ratings with an average target price of 81.04 yuan [0], showing the market’s strong confidence in the company’s future development.

The company’s core competitiveness lies in: 1) Rich innovative drug pipeline and continuous R&D investment; 2) Successful international BD cooperation model; 3) Proven commercialization capabilities; 4) Breakthroughs in intelligent manufacturing technology. These factors together constitute Hengrui Medicine’s long-term competitive advantages and are worthy of sustained market attention.