Is It Too Late To Consider Akeso (SEHK:9926) After Strong Five Year Share Gains?

• If you are wondering whether Akeso shares still offer value after a strong run, the numbers behind the current price deserve a closer look.
• At a last close of HK$149.30, Akeso has delivered returns of 1.3% over 7 days, 33.2% over 30 days, 31.8% year to date and 60.7% over 1 year, with a very large 3 year gain and 173.2% over 5 years.
• These moves have put Akeso on the radar of investors trying to understand what is already priced in and what may still be up for grabs. Recent coverage has focused on how this sustained share price strength lines up with the company’s position in the biotech sector and the expectations currently implied by the market.
• Even so, Akeso only scores 1 out of 6 on Simply Wall St’s valuation checks. The next sections will walk through traditional valuation approaches and then finish with a broader way to think about what “fair value” really means for this stock.

Akeso scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Akeso Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes estimates of the cash a company may generate in the future, then discounts those amounts back to today to arrive at an implied value per share.

For Akeso, the latest twelve month free cash flow is a cash outflow of CN¥1,561m. Analyst and model projections used here expect free cash flow to turn positive and reach CN¥5,239.5m by 2030, with annual projections stepping up between 2026 and 2035. Analysts provide estimates for the nearer years, and Simply Wall St extrapolates further out to make a full 2 Stage Free Cash Flow to Equity model.

Discounting these projected cash flows back to today gives an estimated intrinsic value of HK$180.30 per share, compared with the current price of HK$149.30. On this basis, the model suggests Akeso trades at a 17.2% discount to its DCF estimate, which indicates the shares are undervalued based on this set of cash flow assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Akeso is undervalued by 17.2%. Track this in your watchlist or portfolio, or discover 237 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Akeso.

Approach 2: Akeso Price vs Sales

For companies where earnings are not yet a steady guide, price to sales can be a useful yardstick because it compares what you pay for each dollar of revenue, rather than profits that may still be volatile.

In general, higher growth expectations and lower perceived risk tend to justify a higher “normal” P/S ratio, while slower growth and higher risk usually line up with a lower multiple. So the question is whether Akeso’s current P/S ratio looks reasonable against what the market might expect for its profile.

Akeso currently trades on a P/S ratio of 39.20x. This sits well above the Biotechs industry average of 14.72x and above the peer group average of 16.96x. Simply Wall St’s proprietary “Fair Ratio” for Akeso is 18.15x, which is an estimate of what the P/S might be given factors such as its growth characteristics, profit margins, industry, market cap and key risks.

Because the Fair Ratio is tailored to Akeso’s own fundamentals, it gives a more company specific reference point than broad industry or peer comparisons. With the current 39.20x P/S sitting well above the 18.15x Fair Ratio, the shares appear expensive on this sales based metric.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Akeso Narrative

Earlier it was mentioned that there is an even better way to understand valuation, and on Simply Wall St that means using Narratives. This is where you attach your own story about Akeso to the numbers by linking assumptions for future revenue, earnings and margins to a fair value that can be lined up against the current share price.

A Narrative is simply your view of what is happening at the company, written out as a clear story, then translated into a forecast that produces a fair value. This way you are not just reacting to the price but comparing that fair value to HK$149.30 to decide whether the share currently looks cheap or expensive to you.

These Narratives live on the Akeso Community page and update automatically when fresh information comes in. For example, an analyst view that expects earnings of CN¥6.2b and a fair value around HK$235.01 will sit alongside a more cautious view that expects CN¥1.8b in earnings and a fair value of about HK$112.87, and you can decide which story feels closer to your own expectations.

For Akeso however we will make it really easy for you with previews of two leading Akeso Narratives:

🐂 Akeso Bull Case

Fair value: HK$174.12

Implied discount to this fair value: 14.3% below the narrative fair value based on the current price of HK$149.30

Assumed annual revenue growth: 55.33%

• Focuses on late stage oncology assets like cadonilimab and ivonescimab, with NRDL inclusion and hospital coverage expansion expected to support wider usage.
• Highlights partnerships with SUMMIT Therapeutics and Pfizer, along with a broad R&D pipeline that includes bispecifics, ADCs and trispecific antibodies.
• Builds a case around analysts expecting revenue of CN¥11.5b, earnings of CN¥3.3b and a 54.5x P/E by 2029 to justify a consensus price target of HK$174.12.

🐻 Akeso Bear Case

Fair value: HK$112.87

Implied premium to this fair value: 32.2% above the narrative fair value based on the current price of HK$149.30

Assumed annual revenue growth: 47.52%

• Starts from deep price cuts for cadonilimab and ivonescimab and ongoing cost controls that could pressure average selling prices and margins.
• Flags concentration in a small number of late stage programs, intense competition in immuno oncology and ADCs, and the risk that new modalities reduce the commercial impact of existing assets.
• Builds a lower fair value of HK$112.87 by assuming revenue of CN¥9.8b, earnings of CN¥1.8b and a higher 66.0x P/E by 2029, implying current market expectations may already be demanding.

Do you think there's more to the story for Akeso? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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