The valuation of innovative pharmaceutical companies is fundamentally anchored in the value of their pipeline assets. As a core candidate in Hengrui's metabolic disease franchise, the clinical progress and commercial potential of the GLP-1/GIP dual receptor agonist HRS-9531 (Repupeptide) remain a key focus for capital markets. We have employed the industry-standard risk-adjusted Net Present Value (rNPV) model to estimate the intrinsic value of this pipeline asset, drawing on public clinical data, the competitive landscape, and commercialization expectations to provide a reference valuation framework.

The core logic of an rNPV valuation involves discounting the entire lifecycle cash flows of the pipeline back to the present, after applying multiple risk adjustments. The formula used is: Peak sales × Clinical success probability × Discount factor. The peak sales itself is a product of the target patient population, expected peak penetration rate, market share, annual treatment cost, a clinical data quality coefficient, and a commercialization rights coefficient.

Regarding the clinical success probability, according to public information from Hengrui, the New Drug Application (NDA) for HRS-9531 in chronic weight management in adults was accepted by China's National Medical Products Administration in September 2025 and is currently under technical review. Separately, the NDA submission for its use in controlling blood glucose in adults with type 2 diabetes has completed Phase III clinical trials, with a submission planned shortly. The overall program has advanced to the NDA filing stage. In line with industry-standard clinical success rates for this phase, we have assigned a clinical success probability factor of 0.90.

For the patient population, HRS-9531 targets two major metabolic indications: type 2 diabetes and obesity/overweight. Based on public industry data, there were approximately 148 million diagnosed type 2 diabetes patients in China in 2025. Among these, about 43.2 million individuals meet the criteria for GLP-1 class drug use, including those with concomitant cardiovascular disease, chronic kidney disease, or a BMI of 30 kg/m² or higher. Concurrently, the population with obesity (BMI ≥ 28 kg/m²) in China has surpassed 90 million. Within this group, approximately 30 million individuals have metabolic complications such as hypertension, dyslipidemia, or polycystic ovary syndrome, and have a clinical need for pharmacotherapy. After excluding the overlapping patient populations between the two indications, the total potential target patient pool for HRS-9531 in China is estimated to be around 73 million.

For the penetration rate, referencing mature penetration levels in the US market, and factoring in long-term drivers such as the continuous expansion of domestic medical insurance coverage, improved patient disease awareness, and better accessibility of domestic drugs, we project the overall peak penetration rate for the GLP-1 class in China could reach around 18% as the market matures. As a premium, efficacy-enhanced category, GLP-1/GIP dual-target drugs are expected to capture about 60% of this market, translating to a peak penetration rate of roughly 10.8% for the segment.

Regarding market share, HRS-9531 is a Fast Follow asset in the GLP-1/GIP dual-target space. The current core players in this domestic segment include Eli Lilly's tirzepatide (the originator), Hengrui's repupeptide, and Hansoh Pharma's olep peptide. With only 2-3 main competitors, the segment is not yet a red ocean. As a leading innovative drug company in China, Hengrui possesses an extensive sales network for metabolic diseases covering hospitals nationwide, alongside a mature academic promotion system. With leading development progress among domestic dual-target drugs, Hengrui holds a significant channel advantage and localization expertise. Considering the competitive landscape and the company's commercialization capabilities, we have assigned a 40% market share assumption to HRS-9531.

For the annual treatment cost, following the 2025 national medical insurance negotiations, prices for imported GLP-1 drugs saw substantial reductions. The annual treatment cost for semaglutide injection dropped to approximately RMB 7,980, while the main maintenance dose of tirzepatide costs about RMB 7,000 annually post-insurance. Domestic GLP-1 drugs typically adopt a follow-on pricing strategy, usually priced at 60%-80% of the originator's price. Given that HRS-9531 is an innovative dual-target drug with a certain clinical value premium, but also needs to fit within the domestic medical insurance payment system as a local product, we estimate its post-negotiation annual treatment cost to be around RMB 5,800.

Assessing the clinical data quality, based on the Phase III data disclosed by Hengrui, the 4mg dose group in the HRS-9531 Phase III trial for type 2 diabetes achieved a mean HbA1c reduction of 2.78%, demonstrating non-inferiority head-to-head against the 1mg dose of semaglutide, with a trend towards superiority in higher dose groups. In the Phase III trial for the obesity indication, the 6mg dose group showed a mean weight reduction of 19.2% over 48 weeks, with 44.4% of subjects achieving a weight loss of 20% or more. This places its efficacy in the top tier among domestic dual-target drugs, approaching that of the international originator, tirzepatide. Overall, HRS-9531 employs a randomized, double-blind, controlled trial (RCT) design and its efficacy is close to the current optimal standard of care, warranting a clinical data quality coefficient of 0.70.

Concerning commercialization rights, HRS-9531 is a Class 1 innovative drug independently developed by Hengrui, granting it full development, manufacturing, and commercialization rights in Greater China. Hengrui also has a mature in-house commercial team, eliminating the need for external sales royalty payments. According to evaluation standards, we have assigned a commercialization rights coefficient of 0.95. It is important to note that Hengrui licensed out the global rights for this product outside Greater China to Kailera Therapeutics in May 2024, receiving upfront, milestone, and royalty payments. This valuation estimate covers only the Greater China market, and the value of the overseas rights is not included in this rNPV calculation.

Based on the parameters above, the estimated peak annual sales for HRS-9531 in Greater China are approximately RMB 11.8 billion.

For the discount rate, as a mature, large-scale innovative drug company in China, Hengrui's overall pipeline risk is relatively low. We have applied an 11% discount rate, which falls within the standard industry range of 10%-12%. From a timeline perspective, HRS-9531 is expected to be approved and launched around 2027. Typically, an innovative drug undergoes a market ramp-up period of 5-7 years to reach peak sales, which we estimate to occur around 2033, approximately seven years from the current point. Applying a compound discounting calculation, the discount factor is approximately 0.48.

Combining the 0.90 clinical success probability with the discount factor, the final rNPV for the HRS-9531 pipeline in Greater China is estimated to be approximately RMB 5.1 billion.

Disclaimer: The peak sales and rNPV figures in this analysis are model estimates based on public information and a series of subjective assumptions. They are intended solely to illustrate the valuation logic and do not represent the official forecasts of the company nor constitute any investment advice. Key parameters such as clinical success rates, penetration rates, market share, and annual treatment costs carry significant uncertainty, and actual results may differ materially from these estimates. Investors should make their own independent judgments and bear their own investment risks.