Our target price of HK$25 is based on a discounted cash flow (DCF) approach. We consider DCF as an appropriate method for an R&D-driven company currently without profit.  Our DCF analysis factors in our revenue and earnings forecasts out to 2035; we assume a terminal growth rate of 2.0%, a WACC of 10.4% and a beta of 1.3.

Our quant rating system assigns a High Risk to the Abbisko stock given its short listing history. Key risks that could impede the stock from reaching our target price include: 1) Lack of profitability; 2) sales may be worse than expected; 3) pimicotinib or irpagratinib may fail in clinical trials; 4) regulatory risks; and 5) fierce competition.