A Look At Akeso (SEHK:9926) Valuation After New Cadonilimab Approval In Colorectal Cancer

Akeso (SEHK:9926) has drawn fresh attention after its Cadonilimab Injection received implicit approval as neoadjuvant and adjuvant monotherapy in resectable colorectal cancer with high microsatellite instability or mismatch repair deficiency.

See our latest analysis for Akeso.

Akeso's HK$120.0 share price has been volatile, with a 1 day share price return of 4.35% after the Cadonilimab update, against a 30 day share price return that is down 18.20%. At the same time, the 1 year total shareholder return of 39.53% and 3 year total shareholder return above 7x suggest momentum over longer horizons.

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With Akeso trading at HK$120.0 and sitting at what looks like a 37% intrinsic discount and a roughly 44% gap to analyst targets, is the recent news still underappreciated, or is the market already pricing in future growth?

Most Popular Narrative: 31.1% Undervalued

Against Akeso's last close of HK$120.0, the most followed narrative points to a fair value of HK$174.12. This frames the latest Cadonilimab update in a much bigger story about the pipeline and future cash generation rather than a single approval.

The initiation and ongoing progress of numerous Phase III trials for cadonilimab and ivonescimab across various cancer types indicate potential future approvals that could enhance revenue streams and market positioning globally. The collaboration with SUMMIT Therapeutics and the strategic partnership with Pfizer to combine ivonescimab with Pfizer's ADCs suggests expansion into new therapeutic areas and geographic markets, promising to impact earnings positively.

Read the complete narrative.

Curious what kind of revenue ramp, margin swing, and future earnings multiple need to line up for that fair value to work? The narrative leans on aggressive growth assumptions, a sharp turn into sustained profitability, and a valuation hurdle usually reserved for market leaders. The exact mix of those inputs is where the real story sits.

Result: Fair Value of HK$174.12 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this story still leans heavily on a few key drugs and ongoing operating losses, so any clinical or partnership setback could quickly challenge that upside case.

Find out about the key risks to this Akeso narrative.

Another Way To Look At Valuation

While the SWS DCF model points to Akeso trading at a 36.7% discount to an estimated fair value of HK$189.46, the market is also paying a P/S of 31.4x compared with 12.3x for the Hong Kong Biotechs industry and a fair ratio of 14.9x. This tilts the story toward valuation risk. Which signal do you put more weight on?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If the mix of optimism and risk in this story feels finely balanced, it is worth checking the details yourself and acting while sentiment is fresh, especially as our work highlights 2 key rewards

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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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