Zai Lab Ltd (9688) AI Stock Analysis

• Market Cap: HK$17.44B
• Dividend Yield: N/A
• Average Volume (3M): 12.30M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.29
• Revenue Growth: 23.87%
• EPS Growth: 30.08%
• Country: HK
• Employees: 1,869
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -0.26
• Shares Outstanding: 1,119,628,000
• 10 Day Avg. Volume: 7,918,320
• 30 Day Avg. Volume: 12,299,780
• PEG Ratio: 0.11
• Price to Book (P/B): 3.16
• Price to Sales (P/S): 6.67
• P/FCF Ratio: -9.63
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$32.00
• Price Target Upside: 44.29% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): -1.19
• Revenue Forecast (FY): HK$3.76B

• Rating: 42 Neutral
• Price Target: HK$14.50 ▼(-34.63% Downside)

Zai Lab Ltd's overall stock score is primarily impacted by its financial performance and technical analysis. The company faces significant profitability and cash flow challenges, which are reflected in its negative P/E ratio. The stock is also experiencing bearish momentum, trading below key moving averages with oversold technical indicators. These factors contribute to a cautious outlook for the stock.

Positive Factors

Strong Revenue Growth

Consistent revenue growth highlights Zai Lab's ability to expand its market presence and indicates robust demand for its products, supporting long-term business sustainability.

Strategic Partnerships

Strategic collaborations provide Zai Lab with financial support and access to broader markets, which can accelerate product development and commercialization, driving long-term growth.

Pipeline Advancement

A strong pipeline and new product launches indicate Zai Lab's commitment to innovation and its potential to capture more market share, ensuring sustained future growth.

Negative Factors

Profitability Challenges

Persistent profitability issues suggest difficulties in managing operational costs, which could hinder long-term financial health and shareholder value creation.

Cash Flow Issues

Negative cash flows indicate potential liquidity constraints, which may limit Zai Lab's ability to invest in growth opportunities and meet financial obligations.

Revenue Miss

Missing revenue expectations can signal potential challenges in market execution or demand, impacting investor confidence and future revenue projections.

Zai Lab Ltd Business Overview & Revenue Model

Company Description

Zai Lab Ltd (9688) is a biopharmaceutical company focused on discovering, developing, and commercializing innovative medicines for patients in China and around the world. The company operates primarily in the oncology, autoimmune, and infectious disease sectors and has a robust pipeline of proprietary and partnered products. Zai Lab's core offerings include its own developed therapies as well as collaborations with global pharmaceutical companies.

How the Company Makes Money

Zai Lab generates revenue through several key streams. Primarily, the company earns money from the sale of its proprietary drugs once they receive regulatory approval and are commercially launched. Additionally, Zai Lab benefits from milestone payments and royalties from partnerships with larger pharmaceutical companies, which are often structured around co-development and co-commercialization agreements. These partnerships not only provide upfront capital and financial support but also enhance Zai Lab's market reach and product development capabilities. Clinical trial funding and government grants also contribute to its revenue, along with potential licensing agreements for its drugs in other markets. The strategic collaborations with established players in the industry play a crucial role in driving its earnings and expanding its portfolio.

Zai Lab Ltd Financial Statement Overview

Summary

Zai Lab Ltd exhibits strong revenue growth and a solid gross profit margin, but faces significant profitability and cash flow challenges. The balance sheet is stable with low leverage, yet the negative return on equity and persistent losses indicate a need for strategic improvements to enhance profitability and cash flow management.

Income Statement

Zai Lab Ltd has shown consistent revenue growth, with a TTM revenue growth rate of 2.27%. However, the company is struggling with profitability, as indicated by negative net profit margins and EBIT margins. The gross profit margin remains strong at 63.45% for TTM, but the persistent negative net income and EBIT suggest challenges in managing operational costs.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.24, indicating conservative leverage. However, the return on equity is negative, reflecting ongoing losses and challenges in generating shareholder value. The equity ratio is stable, suggesting a solid capital structure despite profitability issues.

Cash Flow

Zai Lab Ltd's cash flow situation is concerning, with negative operating and free cash flows. The free cash flow to net income ratio is positive, indicating some efficiency in cash flow management relative to net losses. However, the negative free cash flow growth rate of -3.29% in TTM highlights cash flow challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	441.63M	398.99M	266.72M	215.04M	144.31M	48.96M
Gross Profit	270.79M	251.13M	170.90M	141.02M	92.07M	32.22M
EBITDA	-187.93M	-242.99M	-365.11M	-384.66M	-689.46M	-262.96M
Net Income	-206.81M	-257.10M	-334.62M	-481.99M	-692.44M	-298.16M
Balance Sheet
Total Assets	1.16B	1.19B	1.04B	1.22B	1.61B	1.30B
Cash, Cash Equivalents and Short-Term Investments	717.15M	779.67M	806.45M	1.01B	1.41B	1.19B
Total Debt	219.36M	153.47M	15.15M	20.39M	15.54M	18.60M
Total Liabilities	399.00M	344.86M	240.18M	174.54M	230.00M	128.29M
Stockholders Equity	759.95M	840.90M	796.12M	1.05B	1.38B	1.17B
Cash Flow
Free Cash Flow	-210.42M	-276.39M	-206.67M	-392.63M	-568.18M	-226.72M
Operating Cash Flow	-180.54M	-214.87M	-198.18M	-367.64M	-549.23M	-216.06M
Investing Cash Flow	-28.59M	-375.19M	-10.78M	420.02M	249.96M	-554.83M
Financing Cash Flow	310.60M	349.89M	-6.43M	-1.73M	820.20M	1.13B

Zai Lab Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 22.18
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:9688, the sentiment is Negative. The current price of 22.18 is above the 20-day moving average (MA) of 16.05, above the 50-day MA of 20.25, and below the 200-day MA of 25.17, indicating a bearish trend. The MACD of -1.32 indicates Negative momentum. The RSI at 31.60 is Neutral, neither overbought nor oversold. The STOCH value of 47.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:9688.

Zai Lab Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2696	66 Neutral	HK$34.13B	38.35	27.37%	―	2.57%	18.79%
9966	53 Neutral	HK$10.93B	42.78	13.34%	―	206.58%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
9995	46 Neutral	HK$56.01B	-48.21	-39.64%	―	46.14%	39.56%
1877	43 Neutral	HK$36.37B	-23.36	-15.06%	―	39.02%	48.26%
9688	42 Neutral	HK$17.44B	―	-30.41%	―	23.87%	30.08%
2157	40 Underperform	HK$10.71B	-51.15	-21.42%	―	240.05%	-140.09%

Zai Lab Ltd Corporate Events

Zai Lab Limited Announces Equity Incentive Grants

Zai Lab Limited announced the grant of share options and restricted share units under its 2024 Equity Incentive Plan. The company granted options to subscribe for 11,800 ADSs to three employees and restricted share units covering 22,665 ADSs to six employees. This move aligns with the company’s customary practice and aims to incentivize employee performance without attaching performance targets or clawback mechanisms, reflecting a market-competitive approach.

Zai Lab Ltd Announces Share Options and Restricted Share Units Grants

Zai Lab Ltd announced the grant of share options and restricted share units under its 2024 Equity Incentive Plan. The company granted options for 500 American Depositary Shares (ADSs) to one employee and 72,100 restricted share units to 78 employees. This move is part of Zai Lab’s strategy to align employee incentives with company goals, although no performance targets or clawback mechanisms are attached to these grants. The initiative is seen as market competitive and consistent with the company’s practices, potentially impacting employee retention and motivation.

Zai Lab Reports Strong Q3 2025 Results and Pipeline Progress

Zai Lab Limited announced its unaudited financial results for Q3 2025, highlighting a 14% year-over-year revenue growth to $116.1 million and a significant reduction in operating loss. The company is advancing its global pipeline with promising developments in oncology and schizophrenia treatments, including the initiation of a global registrational study for zoci and preparations for the launch of KarXT in China. These efforts underscore Zai Lab’s commitment to expanding its market presence and delivering long-term value to shareholders.

Zai Lab Limited Files Quarterly Report with SEC

Zai Lab Limited announced the filing of its Quarterly Report on Form 10-Q for the quarter ending September 30, 2025, with the U.S. Securities and Exchange Commission. This filing is part of the company’s regulatory compliance and provides stakeholders with updated financial and operational information, potentially impacting investor confidence and market positioning.

Zai Lab’s Partner Amgen Halts Cancer Drug Trial Due to Efficacy Concerns

Zai Lab Limited announced that its partner Amgen has stopped the Phase 1b/3 FORTITUDE-102 trial for bemarituzumab, a treatment for first-line gastric cancer, due to inadequate efficacy. This decision may impact Zai Lab’s operations and its positioning in the oncology market, as the company will continue to collaborate with Amgen for further updates.

Zai Lab to Announce Q3 2025 Financial Results

Zai Lab Limited announced that its Audit Committee will review and approve the company’s unaudited quarterly results for the third quarter of 2025 on November 6, 2025. Following the approval, the company plans to publish the results and hold a live earnings teleconference to discuss the outcomes, indicating a proactive approach to transparency and stakeholder engagement.

Zai Lab Ltd Enhances Governance with New Committee Charter

Zai Lab Ltd has adopted a new charter for its Nominating and Corporate Governance Committee, which outlines the committee’s purpose, composition, procedures, and responsibilities. This move is aimed at enhancing corporate governance and ensuring the selection of qualified individuals for the board, thereby strengthening the company’s leadership and aligning with Nasdaq and Hong Kong Stock Exchange standards.

Zai Lab Limited Announces Equity Incentive Grants to Employees

Zai Lab Limited announced the grant of share options and restricted share units under its 2024 Equity Incentive Plan. The company granted options to subscribe for 25,000 American Depositary Shares (ADSs) to one employee and 32,150 restricted share units to seven employees. These grants are part of the company’s strategy to align employee incentives with its long-term goals, although they do not include performance targets or clawback mechanisms. The move is seen as market competitive and consistent with Zai Lab’s customary practices, potentially impacting employee retention and motivation positively.

Zai Lab Limited Announces Equity Incentive Grants

Zai Lab Limited announced the grant of share options and restricted share units under its 2024 Equity Incentive Plan. On September 8, 2025, the company granted options to subscribe for 6,600 American Depositary Shares (ADSs) to two employees and 9,893 restricted share units to four employees. These grants are part of the company’s strategy to align employee incentives with its long-term goals, although they do not include performance targets or clawback mechanisms. The move is seen as market competitive and consistent with the company’s customary practices.