Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 6.87, representing a potential upside of 35.2% from the current price of HKD 5.08 [2][3]. Core Insights - The company experienced a decline in performance due to pressures in the pharmaceutical environment and proactive inventory reduction, with adjusted net profit down 15.2% year-on-year for the first three quarters of 2024 [2]. - Revenue for the first three quarters of 2024 was HKD 22.69 billion, a decrease of 4.9% year-on-year, while gross profit was HKD 15.99 billion, with a gross margin of 70.5%, slightly up by 0.1 percentage points [2]. - The report highlights a shift in the product pipeline, with older products facing revenue declines due to centralized procurement impacts, while new products are expected to drive future growth [2]. Financial Summary - For the first three quarters of 2024, the company reported a net profit of HKD 3.88 billion, down 15.9% year-on-year, with a net profit margin of 17.6%, a decrease of 2.2 percentage points [2]. - The revenue breakdown shows that the prescription drug segment generated HKD 18.67 billion, down 3.5%, while the functional food segment saw a significant decline of 21.9% to HKD 1.29 billion [2]. - Research and development expenses increased by 5.5% year-on-year to HKD 3.88 billion, representing 20.8% of the prescription drug revenue, up 1.8 percentage points [2]. Segment Performance - The report details various segments: - The neurology segment saw a revenue increase of 4.5% to HKD 7.23 billion, but experienced a significant drop of 15.8% in Q3 due to strict cost control measures [2]. - The oncology segment's revenue decreased by 31.2% in Q3, influenced by centralized procurement in the Beijing-Tianjin-Hebei region [2]. - The cardiovascular segment reported a decline of 11.1% to HKD 1.63 billion, with a notable drop of 26.7% in Q3 due to a lack of procurement success [2]. Pipeline and Future Outlook - The company is expected to rely on new product launches to drive growth, with anticipated contributions of approximately HKD 2 billion from innovative products in the coming year [2]. - The report mentions a significant licensing deal with AstraZeneca for a lipoprotein(a) inhibitor, which includes an upfront payment of USD 100 million and potential milestone payments of USD 1.92 billion [2].

Investment Rating - The report maintains a "Neutral" rating for the company with a target price adjusted to HKD 5.06 [3][5][16]. Core Views - The company is expected to face continued pressure on its performance in the short term, primarily due to a decline in the revenue of its pharmaceutical segment, which has resulted in a year-on-year revenue drop of 4.9% to RMB 22.686 billion for the first three quarters [1][2]. - The decline in revenue is attributed to several factors, including a 14.5% quarter-on-quarter decrease in the pharmaceutical segment's revenue, impacted by price controls and increased competition [1][2]. - The company has increased its R&D spending, leading to a rise in the R&D expense ratio by 2.1 percentage points [1]. Summary by Sections Financial Performance - For the first three quarters, the company's revenue decreased by 4.9% to RMB 22.686 billion, and net profit attributable to shareholders fell by 15.9% to RMB 3.78 billion [1]. - The third quarter saw a significant decline in revenue and net profit, with year-on-year drops of 17.8% and 51.5%, respectively [1]. - The pharmaceutical segment, which has the highest gross margin, experienced a revenue decline, leading to a 3.1 percentage point drop in gross margin for the third quarter [1]. Revenue Forecast - The revenue forecast for the pharmaceutical business remains unchanged, with an expected year-on-year decline of 7.0% in 2024, followed by a gradual recovery in 2025-2026 [2]. - New drug approvals are anticipated to partially offset the impact of price reductions, but significant revenue recovery is not expected in the short term due to market competition and price controls [2]. Adjustments to Projections - Revenue projections for raw materials and functional foods have been slightly lowered, with 2024-2026 revenue estimates adjusted down by 1.0%, 1.6%, and 1.6%, respectively [3]. - R&D expense forecasts for 2024-2026 have been increased by 7.8% to 11.5%, while net profit estimates for the same period have been reduced by 3.7%, 4.8%, and 2.2% [3].

Investment Rating - The report assigns a "Neutral" rating to the company with a target price of HKD 5.80, indicating a potential upside of 13.0% from the current closing price of HKD 5.13 [1][4][9]. Core Insights - The company experienced significant pressure in its business segments during Q3 2024, with revenues and net profits declining by 17.8% and 50.4% respectively. The decline was attributed to various factors, including a 20% drop in the pharmaceutical segment, particularly a 31% decrease in the oncology sector due to competitive pricing pressures and inventory adjustments [1][2]. - The management anticipates a recovery in 2025, driven by the launch of six new products by the end of 2024, which is expected to restore positive growth in operating income outside of business development (BD) [1][2]. - The company has entered a significant business development phase, with a global rights deal for an Lp(a) inhibitor with AstraZeneca potentially worth up to USD 1.65 billion, including a USD 100 million upfront payment expected to be recognized in Q4 2024 [2][5]. Financial Model Updates - Revenue forecasts for 2024-2026 have been adjusted downward by 17-26%, and net profit forecasts have been reduced by 28-37% due to the disappointing Q3 performance [2][3]. - The updated financial projections indicate a revenue of RMB 29,632 million for 2024, down from the previous estimate of RMB 35,518 million, with a corresponding net profit of RMB 4,966 million, reflecting a significant decrease from the prior forecast [3][11]. Business Development Potential - The company is expected to generate at least two external licensing deals annually, with the potential for each deal to exceed the scale of the AstraZeneca transaction. This includes ongoing development in various innovative platforms such as ADC, siRNA, and mRNA vaccines [2][5]. - The management is actively exploring collaborations in early product development with AI drug discovery and gene therapy technologies, indicating a strategic focus on innovation and partnerships [2][5].

Core Viewpoint - The report from CICC indicates that CSPC Pharmaceutical Group's performance in the first three quarters of 2023 was poor, with revenue declining by 4.9% year-on-year, and net profit and core net profit decreasing by 15.9% and 15.2% respectively [1][2]. Group 1 - The decline in performance is attributed to the impact of centralized procurement and medical insurance cost control on the traditional Chinese medicine business, as well as a decrease in demand and prices for raw materials [2]. - The third quarter's performance fell short of expectations, prompting a downward revision of the core net profit forecast for CSPC for this year and next year, while maintaining an "outperforming the industry" rating [2]. - The target price has been reduced by 19% to HKD 6.8 [2].

Investment Rating - The report maintains a BUY rating for CSPC Pharmaceutical, despite ongoing sales pressure and a downward revision of the target price from HK$6.21 to HK$5.97, indicating a potential upside of 16.3% from the current price of HK$5.13 [1][3]. Core Insights - CSPC's total revenue for 9M24 decreased by 3.5% YoY to RMB22.69 billion, with attributable net profit falling by 15.9% YoY to RMB3.78 billion, representing 71% and 64% of previous full-year estimates respectively [1]. - The company faces significant sales pressure from legacy products, particularly in CNS, oncology, cardiovascular, and respiratory disease segments, with notable YoY declines in sales [1]. - New product sales are expected to partially offset the decline from legacy products, with management targeting RMB2.0 billion in sales from new products in 2024E and forecasting further growth in 2025E [1]. Financial Performance Summary - Revenue for FY24E is projected at RMB29.47 billion, a decrease of 6.3% YoY, with net profit expected to decline by 19.0% to RMB4.92 billion [2][8]. - Gross profit margin is anticipated to be 70.42% in FY24E, decreasing to 69.45% in FY25E [2][11]. - The company’s operating profit is expected to decline to RMB6.26 billion in FY24E, with a further decrease to RMB5.90 billion in FY25E [2][11]. Sales and Product Insights - Sales from finished drugs in 3Q24 were RMB5.21 billion, reflecting an 18.9% YoY decrease, primarily due to price cuts and regulatory pressures [1]. - The anticipated inclusion of Duomeisu in the national VBP from March 2025 is expected to lead to further price reductions and continued sales pressure [1]. - CSPC has out-licensed global rights for a pre-clinical stage product to AstraZeneca, which could provide additional profit sources in the future [1].

Revenue and Profit Performance - Revenue for the first nine months of 2024 decreased by 4.9% year-on-year to RMB 22.686 billion, primarily due to a decline in pharmaceutical business revenue[3] - Shareholders' basic profit decreased by 15.2% year-on-year to RMB 3.998 billion, while reported profit decreased by 15.9% to RMB 3.778 billion[3] - Revenue for the nine months ended September 30, 2024, was RMB 22,686.151 million, a decrease of 4.9% compared to RMB 23,865.076 million in the same period in 2023[57] - Gross profit for the nine months ended September 30, 2024, was RMB 15,985.244 million, a decrease of 4.8% compared to RMB 16,792.100 million in the same period in 2023[57] - Net profit attributable to the company's owners for the nine months ended September 30, 2024, was RMB 3,778.039 million, a decrease of 15.9% compared to RMB 4,494.641 million in the same period in 2023[57] - Profit before tax for the nine months ended September 30, 2024, was RMB 4,745.513 million, a decrease of 15.4% compared to RMB 5,609.759 million in the same period in 2023[57] - Earnings per share (basic) for the nine months ended September 30, 2024, was RMB 32.03, a decrease of 15.4% compared to RMB 37.84 in the same period in 2023[57] Pharmaceutical Business Performance - Pharmaceutical business revenue decreased by 3.5% to RMB 18.670 billion, with notable growth in the nervous system (+4.5%) and digestive metabolism (+30.7%) therapeutic areas[4] - Anti-tumor therapeutic area revenue decreased by 17.6%, driven by price reductions of key products due to centralized procurement policies[5] - Cardiovascular therapeutic area revenue decreased by 11.1%, impacted by the failure of Xuanning® to win in the 2023 national centralized procurement[6] - Respiratory system therapeutic area revenue decreased by 18.8%, with significant declines in Qixiao® sales due to reduced market demand[7] - Digestive metabolism therapeutic area revenue increased by 30.7%, driven by strong sales growth of Oubetuo® and Debixin®[7] - Revenue from the pharmaceutical segment for the nine months ended September 30, 2024, was RMB 18,670.189 million, a decrease of 3.3% compared to RMB 19,303.355 million in the same period in 2023[60][61] Raw Materials and Functional Foods Performance - Revenue from raw material products decreased by 5.2% to RMB 2.726 billion, with vitamin C product sales down 3.4% to RMB 1.462 billion and antibiotic product revenue down 7.2% to RMB 1.264 billion[8] - Functional food and other business revenue decreased by 21.9% to RMB 1.290 billion, with caffeine product prices stable but significantly lower compared to the same period last year[8] - Revenue from the raw materials segment (Vitamin C) for the nine months ended September 30, 2024, was RMB 1,461.726 million, a decrease of 3.4% compared to RMB 1,512.917 million in the same period in 2023[60][61] - Revenue from the raw materials segment (antibiotics) for the nine months ended September 30, 2024, was RMB 1,264.396 million, a decrease of 7.2% compared to RMB 1,362.316 million in the same period in 2023[60][61] - Revenue from the functional foods and other segment for the nine months ended September 30, 2024, was RMB 1,289.840 million, a decrease of 21.9% compared to RMB 1,651.788 million in the same period in 2023[60][61] R&D and Innovation - R&D expenses increased by 5.5% to RMB 3.880 billion, accounting for 20.8% of pharmaceutical business revenue, with over 60 key drugs in clinical or application stages[9] - 6 drugs have submitted marketing applications, and 24 products (30 indications) are in the registration clinical stage[9] - 2 innovative drugs (new indications), 1 biosimilar, and 1 special formulation were approved for marketing in China, with 34 clinical trial approvals and 7 generic drug registrations[10] - 3 innovative drugs in North America received clinical trial approvals, with 1 fast-track designation[10] - Mingfule® (rhTNK-tPA) was approved in China for acute ischemic stroke, marking the first approval for this indication in the country[10] - Ensuxin® (anti-PD-1 monoclonal antibody) received conditional approval for PD-L1-positive recurrent or metastatic cervical cancer[11] - Amphotericin B liposome injection was approved for systemic fungal infections, neutropenic fever, and visceral leishmaniasis[11] - Enyitan® (omalizumab injection) was approved as the first biosimilar in China for chronic spontaneous urticaria[11] - R&D expenses for the nine months ended September 30, 2024, were RMB 3,879.728 million, an increase of 5.5% compared to RMB 3,677.949 million in the same period in 2023[57] Clinical Trials and Drug Development - SYSA1801 injection is being developed for the treatment of Claudin18.2-positive gastric cancer in combination with CAPOX and SG001 or irinotecan hydrochloride liposome injection[14] - JMT101 injection is being developed for the treatment of EGFR-positive lung squamous cell carcinoma in combination with docetaxel albumin[14] - DP303c injection has initiated a Phase III clinical trial in China for the treatment of HER2-positive advanced breast cancer, currently in the enrollment phase[16] - SYS6020 injection (CAR-T) is being developed for the treatment of systemic lupus erythematosus and myasthenia gravis[15] - SYH2039 tablet (MAT2A inhibitor) received US clinical trial approval in April 2024[16] - CPO301 (EGFR-ADC) received Fast Track designation from the FDA for the treatment of EGFR-overexpressing recurrent or metastatic squamous non-small cell lung cancer[16] - TG103 injection (GLP-1 receptor agonist) completed enrollment for its Phase III clinical trial in China for the treatment of overweight and obesity in January 2024[20] - Semaglutide injection completed enrollment for its Phase III clinical trial in China for the treatment of type 2 diabetes in August 2024[18] - JMT103 (narlumab injection) initiated a Phase III clinical trial in China for the treatment of bone metastases in malignant solid tumors in March 2024[18] - SYHX2011 (albumin-bound paclitaxel injection) completed enrollment for its Phase III clinical trial in China for the treatment of advanced breast cancer in March 2024[19] - JMT101 combined with osimertinib initiated Phase III clinical trial in China for NSCLC patients with EGFR exon 20 insertion mutations, currently in the enrollment phase[21] - SYSA1902 achieved primary endpoints in Phase III clinical trial for moderate to severe plaque psoriasis in China[21] - SYS6002 demonstrated clear efficacy signals and good tolerability in Phase I clinical study for advanced solid tumors, presented at ASCO-GU 2024[21] - DBPR108 showed significant glucose-lowering efficacy and safety comparable to placebo and sitagliptin in Phase III clinical study for diabetes[23] - First-generation COVID-19 mRNA vaccine demonstrated good protective efficacy, immunogenicity, and safety against XBB variant[24] - TG103 significantly reduced body weight compared to placebo in Phase Ib clinical study for overweight or obese patients without type 2 diabetes[25] - SG001 showed promising efficacy and safety in Phase Ib clinical study for recurrent or metastatic cervical cancer[25] - JMT103 demonstrated low immunogenicity and good safety in Phase Ib clinical study for bone metastases in solid tumors[28] - DP303c exhibited good efficacy in HER2-expressing advanced solid tumors, particularly in breast cancer, in Phase I clinical study[30] - KN026 combined therapy showed outstanding efficacy and good safety in Phase II clinical study for HER2-positive advanced gastric cancer[32] - CM310 significantly improved lung function and reduced asthma exacerbations, especially in the 150 mg dose group, with low TEAE incidence mainly being respiratory infections[34] - NBL-012 demonstrated good safety and tolerability in healthy Chinese subjects, showing linear pharmacokinetics within the 20 mg to 400 mg dose range[35] - SYHX1901 achieved significantly higher PASI75 rates compared to placebo at 12 weeks in moderate to severe plaque psoriasis, with good overall safety and tolerability[36] Marketing Applications and Approvals - DBPR108 (Prucalopride Tablets) has submitted a marketing application for type 2 diabetes[37] - Meloxicam Nanocrystal Injection has submitted a marketing application for moderate to severe pain in adults[37] - Amphotericin B Liposome for Injection has submitted a marketing application in the US for invasive fungal infections[37] - Irinotecan Hydrochloride Liposome Injection has submitted a marketing application in the US for pancreatic cancer[37] - Clevidipine Butyrate Injection Emulsion has submitted a marketing application for hypertension[37] - Batoclimab (HBM9161) has submitted a marketing application for myasthenia gravis[38] - JMT101 Injection is in key clinical trials for non-small cell lung cancer and lung squamous carcinoma[40] Intellectual Property and Licensing Agreements - The company submitted 36 PCT international applications and filed 229 patents (127 domestic and 102 foreign) since early 2024, with 60 patents granted (31 domestic and 29 foreign)[50] - As of September 30, 2024, the company has submitted a total of 198 PCT international applications, filed 2,023 patents (1,311 domestic and 712 foreign), and obtained 959 patent grants (636 domestic and 323 foreign)[50] - In September 2024, the company entered into an exclusive licensing agreement with Jiangsu Alphamab to develop, sell, and commercialize JSKN003, a HER2-targeting bispecific antibody-drug conjugate (ADC), in mainland China for tumor-related indications[52] - In October 2024, the company signed an exclusive global licensing agreement with AstraZeneca for the development, manufacturing, and commercialization of its Lp(a) inhibitor YS2302018, receiving an upfront payment of $100 million and potential milestone payments of up to $3.7 billion for development and $15.5 billion for sales, plus tiered royalties[53] Financial Reporting and Governance - The company reported a shareholder's reported profit of RMB 3,778,039 thousand and a basic profit of RMB 3,998,789 thousand, adjusted for fair value losses on financial assets and share-based employee compensation expenses[55] - Financial data for the nine months ended September 30, 2024, was prepared based on the company's internal records and management accounts, reviewed by the audit committee but not audited by external auditors[63] - The board of directors includes executive directors such as Cai Dongchen, Zhang Cuilong, Wang Zhenguo, Pan Weidong, Wang Huaiyu, Li Chunlei, Jiang Hao, Yao Bing, and Cai Xin, as well as independent non-executive directors like Wang Bo, Chen Chuan, Wang Hongguang, Ou Zhenguo, Luo Zhuojian, and Li Quan[64]

Investment Rating - The report maintains a "Neutral" rating for the company with a target price adjusted to HKD 5.18 [3][5][14] Core Views - The company anticipates a significant decline in profit for the first three quarters of 2024, projecting a year-on-year decrease of 16% to approximately RMB 3.8 billion due to a substantial drop in revenue from its main pharmaceutical business [1][2] - The decline in revenue is primarily attributed to a worsening sales performance in the oncology segment, particularly for its key products, which have been adversely affected by centralized procurement policies [1][2] - The report indicates that the core products in the neurological and cardiovascular segments are also underperforming, with a notable decrease in revenue growth for the second half of the year [1][2] Summary by Sections Financial Performance - The company expects total revenue for 2024 to be approximately RMB 29.4 billion, reflecting a decrease from previous estimates [4] - Shareholder net profit is projected to decline to RMB 4.89 billion in 2024, down from RMB 5.87 billion in 2023, indicating a significant drop in profitability [4][8] - The report outlines a downward revision of revenue forecasts for the oncology segment by 16%-25% for FY24-26, with expected revenues of RMB 4.9 billion, RMB 5.5 billion, and RMB 6.4 billion respectively [2] Valuation Metrics - The adjusted DCF model suggests a target price of HKD 5.18 per share, with a current market price of HKD 5.27, indicating limited upside potential [3][5] - The report provides a detailed financial summary, including projected earnings per share of RMB 0.41 for 2024, with a P/E ratio of 11.7 [4][8] Market Context - The report highlights the competitive pressures in the oncology market due to price reductions from centralized procurement, which have not led to a significant increase in sales volume for the affected products [2] - The company faces challenges in rapidly recovering sales in the neurological and cardiovascular segments, with established products showing limited growth potential in the current market environment [2][3]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 9.15 per share, based on a 15x PE valuation for 2025 [4] Core Views - The company has entered into an exclusive licensing agreement with AstraZeneca for the global development, manufacturing, and commercialization of its Lp(a) inhibitor YS2302018 The deal includes a $100 million upfront payment, up to $370 million in potential development milestone payments, and up to $1.55 billion in potential sales milestone payments, along with tiered royalties [2] - YS2302018, a small molecule Lp(a) inhibitor developed using the company's AI-driven drug design platform, shows promising preclinical results with excellent pharmacokinetics, efficacy, and safety Lp(a) is a potential target for lipid management, and multiple therapies, including siRNA, ASO, and small molecule inhibitors, are under development globally [2] - The company is accelerating its internationalization efforts, with over 2,000 R&D personnel and eight major technology innovation platforms, including nanomedicine, siRNA, and ADC In H1 2024, R&D expenses reached RMB 2.542 billion, accounting for 18.8% of pharmaceutical revenue The company has over 130 innovative drug projects in its pipeline, with nearly 50 new products/indications expected to be submitted for approval in the next five years [2] Financial Projections - Revenue is projected to grow from RMB 30.937 billion in 2022 to RMB 38.991 billion in 2026, with a CAGR of 5.9% [3] - Net profit attributable to shareholders is expected to increase from RMB 6.091 billion in 2022 to RMB 7.339 billion in 2026, with a CAGR of 4.7% [3] - EPS is forecasted to grow from RMB 0.51 in 2022 to RMB 0.62 in 2026 [3] - ROE is expected to decline slightly from 19.7% in 2022 to 15.7% in 2026, reflecting the company's ongoing investment in R&D and international expansion [3] Financial Ratios - The company maintains a strong balance sheet, with total assets projected to grow from RMB 41.770 billion in 2022 to RMB 60.355 billion in 2026 [7] - The debt-to-asset ratio is expected to decrease from 24.2% in 2022 to 20.4% in 2026, indicating improving financial health [8] - Operating cash flow is forecasted to remain robust, increasing from RMB 7.627 billion in 2022 to RMB 7.951 billion in 2026 [7] - The company's valuation multiples are attractive, with a forward PE of 12.2x for 2024 and an EV/EBITDA of 7.0x, reflecting its growth potential and strong market position [3]

Investment Rating - The investment rating for CSPC Pharma is "Buy" with a 12-month price target of HK$10.03, representing an upside of 40.9% from the current price of HK$7.12 [5][6][11]. Core Insights - CSPC Pharma has entered into its first overseas business development deal by licensing a pre-clinical metabolism drug, YS2302018, to AstraZeneca for an upfront payment of US$100 million, potential development milestone payments of up to US$370 million, sales milestone payments of up to US$1,550 million, and tiered royalties based on net sales [1][2]. - This collaboration is seen as a significant step for CSPC's global expansion and validates its early-stage innovative pipeline, which is not yet reflected in its current valuation [1][2]. - CSPC aims to close 1-2 more business development deals by the end of 2024, indicating a proactive approach to enhancing its pipeline under new R&D leadership [1]. Summary by Sections Licensing Deal - CSPC has licensed out YS2302018, a small molecule inhibitor targeting lipoprotein(a), to AstraZeneca, marking a strategic collaboration that could enhance CSPC's global presence [1][2]. - The deal includes an upfront payment of US$100 million, which is significant for a pre-clinical asset, along with potential milestone payments totaling up to US$2.42 billion [1]. Product Potential - YS2302018 is positioned as a differentiated oral TKI targeting lipoprotein(a), which is linked to cardiovascular diseases, with a high prevalence in older populations [2]. - The drug's oral administration is a competitive advantage over existing therapies that require injections, making it more suitable for chronic disease management [2]. Financial Projections - CSPC's revenue projections for the upcoming years are Rmb 31,450.1 million for 2024, increasing to Rmb 38,080.8 million by 2026, with corresponding EBITDA growth [5]. - The company is expected to maintain a P/E ratio that decreases from 13.0 in 2024 to 10.1 by 2026, indicating improving profitability [5].

石药集团（1093） 更新报告 集采致短期承压增速放缓，新产品陆续获批未来可期 买入 2024 年 10 月 4 日 高小迪 852-25321960 上半年收入增速不达预期：2024 年上半年公司营收 162.8 亿元（同比 +1.3%，下同），毛利 116.5 亿元（+3.7%），毛利率 71.6%（+1.7pts）。基 于财务报表所示股东应占溢利 20.2 亿元（+1.8%），归母净利率 18.5% （+0.1pts）。分板块看，成药板块录得收入 135.5 亿元（+4.8%），Q2 收入 环比出现明显萎缩；虽然维 C 原料产品价格缓慢回升，但需求回落，板块收 入上半年同比仍下降 5.4%，得 9.8 亿元；抗生素原料板块忧郁海外需求减 少，收入 8.7 亿元（-6.4%）；由于咖啡因产品价格下跌，功能食品板块收入 8.8 亿元（-25.2%）。 明复乐助力神经领域维持增长，恩必普院外市场开发空间广阔：成药板块 中，神经领域实现收入 52.36 亿元（+15.0%）。明复乐获批脑梗适应症，为 神经领域增长注入充足动力。相比心梗适应症，脑梗适应症能够更快速地放 量。恩必普 DoT 受医院医疗模式限制，尚未 ...