F mañana Bio’s Revenue Growth Outlook Improves; Maintain BUY Rating

Overview

Deutsche Bank released a research report on F_mappings Bio, raising its target price to HKD 48 and maintaining the BUY rating. The report notes that F_mappings Bio’s expected 20% revenue CAGR over the next three years, with R&D and manufacturing businesses each growing at 30%, and delivery business growing ~10%. Additionally, the company expects gross margin to expand by 100–150 bps, further enhancing medium-term growth visibility.

Core views

Deutsche Bank believes F_mappings Bio’s growth outlook has significantly improved, mainly driven by the following factors: Demand-side: Management stated in the latest business update that the company added 69 new projects in the first four months of 2026, two-thirds of which originated from the US and Europe. Bispecific and multispecific projects grew by 50% YoY, accompanied by price hikes—bsAb by 15%, mAb by 5%, and ADCs by 5–15%. Supply-side: Despite strong ongoing business momentum, the company maintains its FY2026 revenue growth guidance at 13–17%, primarily due to FX fluctuations. Excluding FX impact, actual growth is expected to reach 16–20%. To alleviate capacity pressure from the increasing project pipeline, the company plans to invest RMB 3 billion in China over the next two years to expand its D&M (Development & Manufacturing) capacity. Valuation: Analysts raised 2026 and 2027 revenue forecasts by 0.1% and 3.2%, respectively. Gross margin for 2026 was slightly lowered by 0.3 percentage points, while 2027 was raised by 0.5 percentage points, reflecting increased confidence in future profitability. As a result, 2026 net profit forecast decreased marginally by 0.8%, whereas 2027 net profit forecast increased significantly by 5.3%. Long-term Outlook: The company expects a 20% revenue CAGR over the next three years, with R&D and manufacturing businesses growing at 30% and delivery business at ~10%. Additionally, gross margin is projected to expand by 100–150 bps over the next few years, mainly driven by improved operational efficiency and royalty income from R&D services.

Analysis framework

Deutsche Bank assessed F_mappings Bio’s revenue growth potential and profitability by analyzing its latest business dynamics and financial data, using the following methods: 1. Analyzed the volume and sources of new projects, particularly contributions from US and Europe; 2. Assessed the impact of pricing adjustments on revenue; 3. Compared growth expectations across business segments—30% growth for R&D & manufacturing vs. ~10% for delivery; 4. Applied a DCF model for valuation, assuming a constant WACC of 8.3% and a terminal growth rate of 2.5%; 5. Revised 2026–2027 revenue and gross margin forecasts to reflect updated business developments and management guidance. Based on these steps, Deutsche Bank concluded that F_mappings Bio is on track to achieve a 20% revenue CAGR over three years, and accordingly raised its target price to HKD 48.

Methodology notes

• Valuation MethodologyDCF – Discounted Cash Flow

  Target price calculated using DCF model

  The report employs a DCF model to value F_mappings Bio, assuming a constant WACC of 8.3% and a terminal growth rate of 2.5%, consistent with industry practice.

• Company Fundamentals & Financial FrameworkFree cash flow analysis

  Analyze changes in free cash flow

  Evaluate future growth potential and financial health by examining capital expenditure plans and free cash flow trends.

• Industry/sector Analysis FrameworkVolume-price decomposition

  Decompose revenue growth into volume and price contributions

  Quantify contributions of new project volumes and price adjustments to revenue growth.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• F_mappings Bio (2269.HK)

  Benefiting from rapid growth in new projects and pricing adjustments

  Strengths

  Rapid growth in new project volume, pricing adjustments contributing additional revenue, gross margin expansion potential

  Risks

  Geopolitical tensions, intensified competition, rising costs, government-imposed drug price controls

Key data

• Current Share PriceHKD 33.34As of May 29, 2026
• Target PriceHKD 48Implies ~44% upside
• Projected 3-Year Revenue CAGR20%Management guidance
• FY2026E Revenue Growth16%Excluding FX impact
• FY2027E Revenue Growth18%Excluding FX impact
• FY2028E Revenue Growth18%Excluding FX impact
• FY2026E Core Net Profit Growth22%Management guidance
• FY2027E Core Net Profit Growth25%Management guidance
• FY2028E Core Net Profit Growth23%Management guidance

Impact & implications

Deutsche Bank believes F_mappings Bio’s revenue growth outlook has significantly improved, driven by rapid growth in new projects and pricing adjustments. Although FX fluctuations may exert short-term pressure on revenue, the company retains strong medium-term growth potential. Raising the target price to HKD 48 reflects confidence in its 20% revenue CAGR over three years and anticipated gross margin expansion.

Risks

• Geopolitical tensions could lead to adverse changes in operating environment
• Intensifying competition may lead to loss of market share
• Rising operating costs may compress margins
• Government-imposed drug price controls may constrain pricing flexibility

What to watch

• New project volume and geographic sources
• Execution of pricing adjustments
• FX impact on revenue
• Implementation of capital expenditure plans