Core Viewpoint - The company's 1H25 performance is in line with expectations, showing a decline in revenue and net profit compared to the previous year, but there are signs of potential improvement in the second half of the year [1] Financial Performance - 1H25 revenue was 13.273 billion yuan, a year-on-year decrease of 18.5% [1] - Net profit attributable to shareholders was 2.548 billion yuan, down 15.6% year-on-year, while adjusted net profit was 2.320 billion yuan, down 27.9% year-on-year [1] - In 2Q25, the revenue from the pharmaceutical business was 4.747 billion yuan, a year-on-year decline of 20.7% and a quarter-on-quarter decline of 13.7% [1] Business Segments - Revenue from the neurology segment was 1.847 billion yuan, down 27.0% year-on-year, attributed to medical insurance cost control and inventory management [1] - Oncology revenue was 0.498 billion yuan, down 53.5% year-on-year, while anti-infection revenue was 0.735 billion yuan, down 23.2% year-on-year [1] - Cardiovascular revenue was 0.457 billion yuan, down 10.2% year-on-year, and respiratory revenue was 0.250 billion yuan, down 13.5% year-on-year [1] - Digestive metabolism revenue was 0.229 billion yuan, down 31.3% year-on-year, while other fields generated 0.374 billion yuan, up 25.1% year-on-year [1] R&D and Innovation - The company has established eight innovative R&D platforms and is expected to continue monetizing external authorizations [2] - As of now, the company has completed several significant external authorizations with potential milestone payments totaling up to 1.225 billion USD [2] - R&D expenses in 2Q25 were 1.380 billion yuan, accounting for 29.1% of pharmaceutical revenue, indicating a year-on-year increase of 6.2 percentage points [3] - The company's key product, SYS6010 (EGFR ADC), has entered Phase III clinical trials, with expectations for a BLA in 2026 [3] Profit Forecast and Valuation - The profit forecast for 2025 and 2026 remains largely unchanged, with the current stock price corresponding to a P/E ratio of 20.5x for 2025 and 17.3x for 2026 [3] - The target price has been raised by 51.2% to 13.00 HKD, reflecting a potential upside of 23.7% from the current stock price [3]

Summary of CSPC Pharmaceutical Group Conference Call Company Overview - **Company**: CSPC Pharmaceutical Group (1093.HK) - **Industry**: China Healthcare - **Current Stock Price**: HK$10.51 (as of August 22, 2025) - **Market Capitalization**: HK$125,653 million - **Price Target**: HK$9.60, indicating a downside of 9% from the current price [6][8] Key Financial Highlights - **2Q Revenue**: Decreased by 14% YoY, with finished drug sales down 27% YoY and 8% QoQ, which was 15% below estimates [8] - **Gross Profit Margin (GPM)**: Declined by 6.7 percentage points [8] - **Operating Expenses Ratio**: Increased by 8.7 percentage points YoY [8] - **Underlying Profit**: Fell by 39% YoY and 36% QoQ in 2Q; without business development (BD) income, the decline would have been 59% YoY and 24% QoQ [8] - **Fiscal Year Ending**: Expected EPS for 2025 is Rmb0.45, with revenue projected at Rmb29,036 million [6] Growth and Strategic Initiatives - **Revised Guidance**: CSPC recalibrated its target to achieve 5% half-on-half growth in 2H25, anticipating growth acceleration from 2026 [8] - **Sales Target for Mingfule**: On track to reach Rmb1 billion in sales in 2025 [2] - **Business Development (BD) Strategy**: Aims to complete two more BD deals, each exceeding US$5 billion by year-end 2025 [8] - **Focus on Retail Channels**: Plans to strengthen out-of-pocket retail channels to sustain Rmb2 billion in sales post-patent expiry [2] Clinical and Product Development - **EGFR ADC Updates**: Global Phase 3 trials for 3L+ EGFRm NSCLC and 2L+ EGFRwt NSCLC are set to begin in 2H25, with conditional approval based on Overall Response Rate (ORR) [3] - **Competitive Positioning**: Early data in China shows competitive Progression-Free Survival (PFS) and Overall Survival (OS) trends in 2L EGFRwt NSCLC compared to TROP2 ADCs [3] Technology and Pipeline - **Diverse Technology Platforms**: CSPC is nurturing eight technology platforms to support BD candidates across various therapeutic areas [4] - **Metabolic Portfolio**: Includes monthly-dosing semaglutide (Phase 1), GLP-1/GIP, and other innovative therapies [9] Risks and Challenges - **Market Risks**: Stricter reimbursement controls and Value-Based Pricing (VBP) headwinds are impacting legacy drug sales [8] - **Potential Downside Risks**: Include pipeline failures, rising operating costs, and further government price cuts [14] Analyst Ratings and Market Sentiment - **Stock Rating**: Overweight, indicating a positive outlook compared to the industry average [6] - **Industry View**: Attractive, suggesting favorable conditions for growth in the China healthcare sector [6] Conclusion CSPC Pharmaceutical Group is navigating a challenging market environment with a focus on strategic growth through business development and innovative product pipelines. The company is positioned for potential recovery and growth in the coming years, despite current financial setbacks and market pressures.

Investment Rating - The report maintains an investment rating of "Outperform" [5] Core Insights - The new drug sector has shown significant price movements, with notable gains from companies such as Beihai Kangcheng (+35.52%) and Jiahua Biological (+24.66%) during the week of August 18 to August 22, 2025 [1][16] - Upcoming academic conferences, including WCLC and ESMO, are expected to be key catalysts for the innovative drug sector, with numerous data disclosures anticipated from domestic companies [2][3][20] Summary by Sections Weekly New Drug Market Review - The new drug sector experienced substantial fluctuations, with the top five gainers being Beihai Kangcheng (+35.52%), Jiahua Biological (+24.66%), and others, while the top five losers included Geely Pharmaceutical (-16.29%) and Weichip Bio (-10.40%) [1][16] Recommended Stocks - The report suggests focusing on several potential catalysts, including overseas licensing opportunities for differentiated GLP-1 assets and upgraded PD-1 products, as well as drugs likely to benefit from medical insurance negotiations and innovative drug directories [2][20] Key Industry Analysis - Academic conferences are highlighted as crucial catalysts for the innovative drug sector, with WCLC and ESMO being particularly significant for Chinese pharmaceutical companies [20][21] New Drug Approval and Acceptance Status - No new drug approvals were reported for the week, but five new drug applications were accepted, including those from Janssen and AstraZeneca [27][28] Clinical Application Approval and Acceptance Status - A total of 47 new drug clinical applications were approved, and 28 new drug clinical applications were accepted during the week [29][30]

Major Events - Xianjian Technology (01302) has entered the special review process for innovative medical devices for its nickel-titanium alloy arterial duct occluder [1] - Sunny Optical Technology (02382) signed a memorandum of understanding with GoerTek (002241.SZ) and GoerTek Optical to promote complementary advantages [1] - Fuhong Hanlin (02696) completed the first patient dosing in the U.S. for its HLX43 (targeted PD-L1 antibody conjugate) in an international multi-center Phase II clinical study for advanced non-small cell lung cancer [1] - Shanghai Pharmaceuticals (02607) received drug registration certificates for oxytocin injection and octreotide acetate injection in the Philippines [1] - CSPC Pharmaceutical Group (01093) received clinical trial approval for SYS 6036 injection in China [1] - Kaisa Group (01638) reached a strategic cooperation with CITIC City Construction for the Shenzhen Futian Jiayuan project [1] - Conant Optical (02276) has been included in the Hang Seng Composite Index [1] - China Railway (00390) is investigating the cause of the Qianzhazhuang Yellow River Bridge accident, which has resulted in 12 fatalities and 4 missing persons [1] - Dongfeng Motor Group (00489) plans to be privatized at a premium, while Lantu Automobile has applied for a listing introduction [1] - Baize Medical (02609) has been included in the Hang Seng Index series [1] - Zhongmiao Holdings (01471) plans to acquire 55% of Beijing Kechuang Rongxin Technology Co., Ltd. for 165 million yuan [1] - Huaxing Capital Holdings (01911) intends to establish a strategic cooperation framework with YZi Labs to support the application of Binance Coin and the BNB Chain ecosystem [1] - Sihuan Pharmaceutical (00460) received approval from the National Medical Products Administration for its self-developed innovative drug, Dirocitin [1] - China Tongru (01763) successfully obtained a radiation safety license for its radiation source R&D and production base [1] Operating Performance - Cathay Pacific (00293) and Hong Kong Express carried approximately 3.2 million passengers in July, setting a new monthly record for the year [2] - CSPC Pharmaceutical Group (01093) reported a mid-year profit attributable to shareholders of 2.548 billion yuan, a decrease of 15.64% year-on-year [2] - TCL Electronics (01070) reported a mid-year net profit of 1.09 billion HKD, an increase of 67.78% year-on-year [2] - Chongqing Bank (01963) reported a mid-year net profit of 3.19 billion yuan, a year-on-year increase of 5.39%, indicating stable profitability [2] - Shenwan Hongyuan Hong Kong (00218) reported a mid-year profit attributable to ordinary shareholders of 60.134 million HKD, turning from loss to profit [2] - Times Electric (03898) reported a mid-year net profit of 1.6715 billion yuan, a year-on-year increase of 12.93% [2] - CIFI Holdings Group (00884) reported mid-year revenue of 12.281 billion yuan, delivering approximately 15,000 property units in the first half of the year [2] - CRRC (01766) reported a mid-year net profit of 7.246 billion yuan, a year-on-year increase of 72.48% [2] - China Tobacco Hong Kong (06055) reported a mid-year profit attributable to shareholders of 706 million HKD, an increase of 9.79% year-on-year [2] - Vanke Enterprises (02202) reported mid-year revenue of 105.323 billion yuan, maintaining operational efficiency among industry peers [2] - Greentown Management Holdings (09979) reported a mid-year profit attributable to shareholders of 256 million yuan [2] Additional Operating Performance - Goldwind Technology (02208) reported a mid-year profit attributable to shareholders of 1.488 billion yuan, an increase of 7.26% year-on-year [3] - Zhouliufu (06168) reported a mid-year net profit of 415 million yuan, an increase of approximately 11.9%, with a mid-year dividend of 0.45 yuan per share [3] - Zhejiang Huhangyong (00576) reported a mid-year profit attributable to shareholders of 2.787 billion yuan, a year-on-year increase of 4% [3] - Dongfeng Motor Group (00489) reported a mid-year profit attributable to shareholders of 55 million yuan, a decrease of 91.96% year-on-year [3] - Zhaojin Mining (01818) reported a mid-year profit attributable to shareholders of approximately 1.44 billion yuan, a year-on-year increase of approximately 160.44% [3]

Financial Performance - The company's revenue decreased by 18.5% from RMB 16,284 million in 2024H1 to RMB 13,273 million in 2025H1[35] - Gross profit decreased by 25.3% from RMB 11,655 million in 2024H1 to RMB 8,710 million in 2025H1[35] - Gross profit margin decreased by 6.0 percentage points from 71.6% in 2024H1 to 65.6% in 2025H1[35] - Reported profit attributable to shareholders of the Company decreased by 15.6% from RMB 3,020 million in 2024H1 to RMB 2,548 million in 2025H1[35] - Underlying profit attributable to shareholders of the Company decreased by 27.9% from RMB 3,217 million in 2024H1 to RMB 2,320 million in 2025H1[35] - Revenue from finished drugs decreased by 24.4% from RMB 13,549 million in 2024H1 to RMB 10,248 million in 2025H1[36] - Revenue from bulk vitamin C increased by 21.6% from RMB 984 million in 2024H1 to RMB 1,196 million in 2025H1[36] - Revenue from nervous system therapeutics decreased by 28.3% from RMB 5,236 million in 2024H1 to RMB 3,755 million in 2025H1[37] - Revenue from oncology therapeutics decreased significantly by 60.8% from RMB 2,683 million in 2024H1 to RMB 1,051 million in 2025H1[37] R&D and Pipeline - The company has 5 R&D centers located in China & the U S [6,99] - The company has approximately 200 innovative drugs and new formulations [6,99] - R&D expenses increased by 5.5% from RMB 2,542 million in 2024H1 to RMB 2,683 million in 2025H1[35] Business Development - The company has license-out agreements including a potential milestone payment of $105 billion for GLP-1, $522 billion for ROR1 ADC, $1955 billion for Irinotecan Liposome Injection, and $1225 billion for strategic collaboration [116]

Core Viewpoint - The approval of SYS6036 injection by the National Medical Products Administration of China marks a significant advancement for the company in the field of tumor immunotherapy [1] Group 1: Product Development - SYS6036 is a humanized monoclonal antibody drug aimed at tumor immunotherapy, specifically targeting melanoma, non-small cell lung cancer, esophageal cancer, and head and neck squamous cell carcinoma [1] - The product has been submitted under the category of biological products for therapeutic use, specifically Class 3.3 [1] - The development of SYS6036 adheres to the research guidelines for biosimilars, indicating a structured approach to its clinical development [1] Group 2: Research Findings - Pharmaceutical and non-clinical research results demonstrate that SYS6036 shows high similarity in quality, safety, and efficacy compared to the reference drug, supporting the initiation of subsequent clinical studies [1]

Core Viewpoint - The approval of SYS6036 injection by the National Medical Products Administration of China marks a significant advancement for the company in the field of tumor immunotherapy, potentially expanding its product portfolio in oncology treatments [1] Group 1: Product Development - SYS6036 is a humanized monoclonal antibody drug aimed at tumor immunotherapy, approved for clinical trials in China [1] - The drug is classified under Category 3.3 of therapeutic biological products and is expected to be used for treating various cancers, including melanoma, non-small cell lung cancer, esophageal cancer, and head and neck squamous cell carcinoma [1] - The development of SYS6036 adheres to the research guidelines for biosimilars, indicating a strategic alignment with regulatory standards [1] Group 2: Research Findings - Pharmaceutical and non-clinical research results demonstrate that SYS6036 shows high similarity in quality, safety, and efficacy compared to the reference drug, supporting the initiation of subsequent clinical studies [1]

Core Viewpoint - The approval of SYS 6036 injection by the National Medical Products Administration of China marks a significant advancement for the company in the field of tumor immunotherapy [1] Company Summary - The product SYS 6036 is a humanized monoclonal antibody drug aimed at tumor immunotherapy, specifically targeting melanoma, non-small cell lung cancer, esophageal cancer, and head and neck squamous cell carcinoma [1] - The development of SYS 6036 follows the guidelines for biosimilar drug research, indicating a structured approach to its clinical development [1] Industry Summary - The approval for clinical trials in China reflects the growing focus on immunotherapy within the oncology sector, highlighting the potential for innovative treatments in addressing various types of cancer [1] - The research results indicate that SYS 6036 shows high similarity in quality, safety, and efficacy compared to the reference drug, supporting the rationale for further clinical studies [1]

石 藥 集 團 有 限 公 司（「 本 公 司 」， 連 同 其 附 屬 公 司 統 稱「 本 集 團 」）董 事 會（「 董 事 會 」）欣 然 宣 佈，本集團開發的SYS 6036注射液（「該產品」）已獲中華人民共和國國家藥品監督管理局批 准，可在中國開展臨床試驗。 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準 確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部份內容而產生 或因倚賴該等內容而引致的任何損失承擔任何責任。 CSPC PHARMACEUTICAL GROUP LIMITED 石 藥 集 團 有 限 公 司 （股份代號：1093） （於香港註冊成立之有限公司） 自願公告 SYS 6036注射液在中國獲臨床試驗批准 該產品是一款腫瘤免疫治療的人源化單克隆抗體藥物，按照治療用生物製品3.3類申報，預 計將適用於治療黑色素瘤、非小細胞肺癌、食管癌、頭頸部鱗狀細胞癌等多種腫瘤。 該產品的研發遵循生物類似藥相關研究指南。藥學及非臨床研究結果顯示，該產品與原研 參照藥在質量、安全性和有效性方面高度相似，支持開展後續臨床研究。 承董事會命 石藥集團有限公司 ...

Group 1 - The core point of the article is that Shionogi & Co., Ltd. has received approval from the National Medical Products Administration for the clinical trial of SYS6036 injection [2] - The clinical trial is set to commence shortly, indicating progress in the company's drug development pipeline [2]