Investment Rating - The report assigns a "Buy" rating to China Biologic Products (1177 HK) with a target price of HK$4.80, indicating a potential upside of 36.8% from the current price of HK$3.51 [4]. Core Insights - The company reported a strong performance in Q3 2024, with revenue increasing by 14.3% year-on-year to RMB 5.47 billion, driven by the rapid growth of biosimilars and new products [1]. - Adjusted net profit surged by 58.0% to RMB 600 million, exceeding expectations [1]. - Management maintains a double-digit revenue growth guidance for the full year, with specific sales expectations for 2024 including RMB 2 billion from biosimilars and over RMB 500 million from Yilishu [1]. - The company is set to acquire control of Haorunbo (688656 CH), marking its entry into the immunodiagnostics sector, with a planned acquisition of up to 55.00% of the shares [2]. - The acquisition price is set at RMB 33.74 per share, representing a 5% premium over the last trading day before suspension [2]. Summary by Sections Q3 Performance - Q3 2024 revenue reached RMB 5.47 billion, a 14.3% increase year-on-year, attributed to the growth of biosimilars and new product launches [1]. - Adjusted net profit rose by 58.0% to RMB 600 million, surpassing expectations [1]. Future Growth Prospects - The company expects biosimilars to generate RMB 2 billion in sales in 2024, with specific products like Bevacizumab and Trastuzumab projected to contribute RMB 700-800 million and around RMB 500 million, respectively [1]. - New product launches in 2025 are anticipated to further enhance revenue, with the first-year sales of the biosimilar Pertuzumab expected to exceed RMB 800 million [1]. Acquisition Strategy - The acquisition of Haorunbo will provide China Biologic Products with control over a company focused on immunodiagnostics, enhancing its product portfolio in respiratory and autoimmune disease areas [2]. - Haorunbo reported revenues of RMB 394 million and a net profit of RMB 43.3 million in 2023, with commitments from original shareholders for future profit guarantees [2].

Core Insights - China Biopharmaceutical (01177.HK) reported a strong performance in Q3, driven by the recovery of the pharmaceutical industry and accelerated R&D, production, and sales [1] - The company achieved approximately RMB 21.35 billion in revenue for the first three quarters, reflecting a year-on-year growth of about 11.9% [1] - The net profit attributable to shareholders for the first three quarters was approximately RMB 4.17 billion, showing a significant year-on-year increase of about 134.9% [1] Revenue Performance - Q3 revenue reached approximately RMB 5.47 billion, marking a year-on-year growth of about 14.3% [1] - The management highlighted that several innovative products, including Bevacizumab, Rituximab, and Trastuzumab, have been rapidly gaining market traction, contributing significantly to revenue growth [2] Profitability - The adjusted net profit attributable to shareholders for the first three quarters was approximately RMB 2.14 billion, with a year-on-year increase of about 23.7% [1] - In Q3, the net profit attributable to shareholders was approximately RMB 1.15 billion, reflecting a year-on-year growth of about 123.4% [1] Innovation and Future Outlook - The company has entered a phase of intensive innovation product harvest, having received approvals for four innovative products this year, including three Class 1 innovative drugs [1] - Future focus areas for China Biopharmaceutical include oncology, liver disease, respiratory, and surgical/pain management, with an emphasis on accelerating product launch processes [2]

Investment Rating - The report recommends a "Buy" rating for China Biopharmaceuticals (1177.HK) for the first time [2][5]. Core Views - China Biopharmaceuticals is a leading player in the Chinese pharmaceutical industry, with expected continuous improvement in profit margins. The company reported a revenue of 26.199 billion yuan in 2023, a decrease of 8.97%, primarily due to the sale of its stake in Zhengda Qingdao and the impact of medical anti-corruption measures. However, the revenue from continuing operations showed a slight increase of 0.7% year-on-year [3][5]. - The company is advancing its innovation and internationalization strategies across four core business segments: oncology, liver disease, respiratory, and surgical/pain management. The R&D expenditure in 2023 was 4.403 billion yuan, accounting for approximately 16.8% of revenue, with over 77% of this investment directed towards innovative and biological drugs [3][5][19]. Summary by Sections Company Overview - China Biopharmaceuticals is a key player in the Chinese pharmaceutical sector, with a stable shareholding structure and absolute control over its core subsidiaries. The company is part of the Charoen Pokphand Group, which has a strong global presence [10][13]. Financial Performance - The company’s revenue for 2023 was 26.199 billion yuan, reflecting a decline of 8.97%. However, the first half of 2024 saw a revenue increase of 11.1%, reaching 15.874 billion yuan, indicating a return to positive growth [3][15]. - The adjusted net profit for the first half of 2024 was 1.540 billion yuan, up 14.0% year-on-year, signaling a potential turning point in profitability [3][15]. Business Segments - The oncology segment is expected to drive significant growth, with key products like Anlotinib and innovative therapies showing strong market potential. The company anticipates that Anlotinib will achieve a peak sales target of 10 billion yuan [21]. - The liver disease segment is also promising, with products like Magnesium Isoglycyrrhizinate expected to synergize with oncology offerings. The company has several products in late-stage clinical trials for NASH [19][21]. - The respiratory segment is positioned for growth, with inhaled formulations like Budesonide showing strong sales potential. The company has multiple innovative candidates in late-stage clinical trials [19][21]. - The surgical/pain management segment is supported by products like Flurbiprofen Gel, which is expected to contribute to revenue growth [19][21]. R&D and Innovation - The company is committed to expanding its R&D efforts, with a focus on innovative drugs. In 2023, R&D expenses reached 4.403 billion yuan, with a significant portion allocated to innovative drug development [19][21]. - The company plans to launch over 10 innovative products in the next three years, further enhancing its competitive position in the market [19][21].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 3.79, indicating a potential upside of 15.0% from the current price of HKD 3.30 [3][4]. Core Insights - The company is entering a harvest period for its innovative transformation, with a focus on oncology and a gradual improvement in product value [2]. - The risk from centralized procurement has been largely mitigated, and the company continues to see growth in its innovative products, achieving a revenue of HKD 158.7 billion in the first half of 2024, representing a year-on-year increase of 11.1% [2][3]. - The oncology segment generated revenue of HKD 53.6 billion, up 19.5%, accounting for 33.8% of total revenue [2]. Summary by Sections Financial Performance - The company reported a gross profit of HKD 130.3 billion, with a gross margin of 82.1%, reflecting an increase of 11.5% [2]. - Research and development expenses amounted to HKD 25.8 billion, a rise of 10.9%, with an expense ratio of 17% [2]. - The net profit attributable to shareholders reached HKD 30.2 billion, a significant increase of 139.7%, while the adjusted net profit was HKD 15.4 billion, up 14.0% [2]. Product Pipeline and Innovation - The company has accelerated its innovation efforts, focusing on four key areas: oncology, liver disease, respiratory, and surgical analgesia [3]. - In the first half of the year, the company received approval for three innovative drugs and one biosimilar, enhancing its product offerings [3]. - The oncology pipeline is particularly strong, with multiple drugs in clinical research and expected approvals that will drive future revenue growth [3]. Market Position and Valuation - The company has a market capitalization of HKD 620.1 billion and has issued 18.79 billion shares [4]. - The report uses a discounted cash flow (DCF) model for valuation, with a weighted average cost of capital (WACC) of 9.4% and a perpetual growth rate of 3% [3].

Financial Performance - Revenue for the first half of 2024 reached RMB 15.87 billion, an increase of 11.1% compared to RMB 14.28 billion in the same period last year[7] - Net profit attributable to owners of the parent company surged by 139.7% to RMB 3.02 billion, up from RMB 1.26 billion in the previous year[7] - Adjusted non-HKFRS net profit attributable to owners of the parent company increased by 14.0% to RMB 1.54 billion[7] - Revenue for the period reached approximately RMB 158.744 billion, an increase of 11.1% year-over-year[46] - Net profit attributable to shareholders was approximately RMB 30.1716 billion, a significant increase of 139.7% year-over-year[46] - Adjusted non-HKFRS net profit attributable to shareholders was approximately RMB 15.3533 billion, up 14.0% year-over-year[46] - Revenue for the first half of 2024 reached RMB 15,874.4 million, a 11.1% increase compared to RMB 14,283.7 million in the same period of 2023[96] - Gross profit for the first half of 2024 was RMB 13,029.6 million, up 11.5% from RMB 11,683.9 million in the first half of 2023[96] - Net profit attributable to shareholders of the parent company for the first half of 2024 was RMB 3,017.2 million, a significant increase from RMB 1,258.8 million in the same period of 2023[96] - Basic earnings per share for the first half of 2024 were RMB 16.39 cents, compared to RMB 6.78 cents in the same period of 2023[96] - Total comprehensive income for the first half of 2024 was RMB 4,865.9 million, a 69.2% increase from RMB 2,875.9 million in the first half of 2023[99] - Profit for the period was RMB 3,017,162 thousand as of June 30, 2024, compared to RMB 1,258,784 thousand as of June 30, 2023[106] - Total comprehensive income for the period was RMB 3,275,666 thousand as of June 30, 2024, up from RMB 1,434,530 thousand as of June 30, 2023[106] - Net profit attributable to parent company owners increased by 139.7% to RMB 3,017.16 million in the first half of 2024 compared to the same period in 2023[60] - Adjusted non-HKFRS net profit attributable to parent company owners rose by 14.0% to RMB 1,535.33 million in the first half of 2024[60] - Basic earnings per share based on adjusted non-HKFRS net profit increased by 15.0% to RMB 8.34 cents in the first half of 2024[63] Revenue Breakdown - Revenue from innovative products grew by 14.8% to RMB 6.13 billion, accounting for 38.6% of total revenue[7] - Revenue from new products (launched within the last five years) rose by 39.6% to RMB 6.03 billion, representing 38.0% of total revenue[7] - The company's innovative products revenue reached RMB 6.13 billion in the first half of 2024, a year-on-year increase of 14.8%[27] - Revenue from products launched within the last 5 years reached RMB 6.03 billion in the first half of 2024, a year-on-year growth of 39.6%[27] - Oncology drug revenue was approximately RMB 53.6026 billion, accounting for 33.8% of total revenue and growing 19.5% year-over-year[52] - Surgical/analgesic drug revenue was approximately RMB 25.8284 billion, accounting for 16.3% of total revenue and growing 29.9% year-over-year[55] - Revenue from the Modern Chinese Medicine and Western Medicine segment reached RMB 15,649,885 thousand, contributing the majority of the total revenue of RMB 15,874,403 thousand[119] - Revenue from industrial product sales for the six months ended June 30, 2024, was RMB 15,631.808 million, an increase from RMB 14,073.156 million in the same period in 2023[129] R&D and Innovation - R&D expenses accounted for 16.2% of revenue, a slight decrease of 0.1 percentage points compared to the previous year[7] - The company launched 4 innovative products approved by the NMPA, including 3 national Class 1 innovative drugs[27] - The company obtained 11 generic drug approvals from the NMPA, with overall generic drug revenue achieving positive growth[27] - The company has 43 innovative oncology drug candidates in clinical and above development stages, including 3 in the NDA stage, 5 in Phase III, 17 in Phase II, and 18 in Phase I. Additionally, there are 18 biosimilar or generic oncology drug candidates in clinical and above development stages, with 7 in the NDA stage, 1 in pivotal clinical trials, 2 in Phase I, and 8 in BE trials. The company expects 4 innovative drugs and 8 biosimilars or generics to be approved in the oncology field from 2024 to 2026[33] - D-1553 (KRAS G12C inhibitor) submitted an NDA in December 2023 for second-line treatment of KRAS G12C-mutated locally advanced or metastatic non-small cell lung cancer. It is the first domestically developed KRAS G12C inhibitor in China and has been included in the breakthrough therapy program for two additional indications in June 2024[33] - TQB3616 (CDK2/4/6 inhibitor) submitted an NDA in July 2024 for HR+/HER2- advanced or metastatic breast cancer. It shows enhanced CDK2 and CDK4 inhibition compared to abemaciclib, potentially addressing resistance issues in current CDK4/6 inhibitors. The company is advancing Phase III trials for first-line and adjuvant treatment of breast cancer[33] - FS222 (CD137 agonist/PD-L1 inhibitor) demonstrated strong antitumor activity in Phase I trials, with an ORR of 47.4% and DCR of 68.4% in PD-1 antibody-pretreated metastatic/advanced melanoma patients. The company is accelerating its clinical development[34] - The company has 6 innovative liver disease drug candidates in clinical and above development stages, including 1 in Phase III and 5 in Phase II. Additionally, there are 3 biosimilar or generic liver disease drug candidates, with 2 in the NDA stage and 1 in BE trials. The company expects 2 biosimilars or generics to be approved in the liver disease field from 2024 to 2026[36] - The company has 8 innovative respiratory drugs in clinical development, including 1 in Phase III, 4 in Phase II, and 3 in Phase I, with 12 biosimilars or generics expected to be approved by 2026[41] - The company's total R&D expenditure in the first half of 2024 was approximately RMB 2,760.57 million, accounting for 17.4% of total revenue[73] - Research and development expenses for the six months ended June 30, 2024, were RMB 2,578.342 million, an increase from RMB 2,325.435 million in the same period in 2023[135] Product Approvals and Market Position - Fucove (Anlotinib Hydrochloride Capsules) has been approved for six indications, with two new indications for endometrial cancer and renal cell carcinoma submitted to CDE in February and July 2024[29] - Anlotinib combined with chemotherapy achieved positive results in a Phase III clinical trial for advanced soft tissue sarcoma, with a new indication application to be submitted soon[29] - Anlotinib has 10 new indications in Phase III clinical trials, including non-small cell lung cancer and hepatocellular carcinoma, with submissions expected in the coming years[29] - Anlotinib successfully renewed its inclusion in the national medical insurance reimbursement list in December 2023, with an additional indication for differentiated thyroid cancer added[29] - Yilisu (Efbemalenograstim alfa Injection), a third-generation long-acting G-CSF, was approved by NMPA in May 2023 and included in the national medical insurance list in December 2023, contributing significantly to revenue growth in H1 2024[29] - Andevi (Bemarituzumab Injection) was approved by NMPA in April 2024 for extensive-stage small cell lung cancer, with a new indication for endometrial cancer submitted to CDE in February 2024[31] - Bemarituzumab has 5 new indications in Phase III clinical trials, including non-small cell lung cancer, with submissions expected in the coming years[31] - Anbonni (Anlotinib Fumarate Capsules) was approved by NMPA in April 2024 for ROS1-positive non-small cell lung cancer, showing significant efficacy and safety in Phase II clinical trials[31] - Anluqing (Efonidipine Hydrochloride Capsules) was approved by NMPA in June 2024 for ALK-positive non-small cell lung cancer, demonstrating superior progression-free survival compared to crizotinib[31] - Anbeisi (Bevacizumab Injection), Delituo (Rituximab Injection), and Saituo (Trastuzumab Injection) were approved by NMPA in 2023 and contributed to rapid revenue growth in H1 2024[31] - The company expects to have 25 innovative products on the market by 2026, strengthening its position in oncology, hepatology, respiratory, and surgical/analgesia therapeutic areas[92] Industry and Market Trends - China's pharmaceutical manufacturing industry revenue reached RMB 1.2353 trillion in the first half of 2024, a year-on-year decrease of 0.9%[23] - China's pharmaceutical manufacturing industry profit reached RMB 180.6 billion in the first half of 2024, a year-on-year increase of 0.7%[23] Corporate Governance and Index Inclusion - The company has been selected as a constituent of the Hang Seng Index since September 10, 2018[19] - The company has been included in the Hang Seng China Enterprises Index since December 9, 2019[20] - The company has been selected as a constituent of the Hang Seng Stock Connect Biotech 50 Index since March 23, 2020[21] - The company has been ranked in the "Top 50 Global Pharmaceutical Companies" by Pharmaceutical Executive magazine for six consecutive years from 2019 to 2024[21] - The company was included in the FTSE4Good Index Series for the first time and recognized in the S&P Global Sustainability Yearbook (China Edition) 2024 for the second consecutive year[89] Financial Position and Assets - The company's cash and bank balances totaled approximately RMB 223.36 billion, including RMB 85.4947 billion in current assets and RMB 91.81 billion in non-current assets[46] - The company's cash and bank balances amounted to approximately RMB 85.49 billion as of June 30, 2024, compared to RMB 94.52 billion as of December 31, 2023[77] - Total assets were approximately RMB 667.04 billion as of June 30, 2024, with total liabilities of RMB 245.82 billion, resulting in a debt-to-asset ratio of 36.9%[81] - The company's available credit line totaled approximately RMB 38.7 billion as of June 30, 2024, with RMB 29.2 billion unused[78] - The company's net cash position was approximately RMB 80.54 billion as of June 30, 2024, compared to RMB 41.85 billion as of December 31, 2023[81] - The company's short-term loans decreased to approximately RMB 84.85 billion as of June 30, 2024, from RMB 111.36 billion as of December 31, 2023[78] - Total non-current assets increased to RMB 41,481,745 thousand as of June 30, 2024, compared to RMB 39,799,288 thousand as of December 31, 2023[101] - Total current assets rose to RMB 25,221,996 thousand as of June 30, 2024, from RMB 22,892,825 thousand as of December 31, 2023[101] - Net current assets improved to RMB 3,272,784 thousand as of June 30, 2024, up from RMB 1,198,756 thousand as of December 31, 2023[101] - Total assets minus current liabilities increased to RMB 44,754,529 thousand as of June 30, 2024, compared to RMB 40,998,044 thousand as of December 31, 2023[101] - Net assets grew to RMB 42,121,682 thousand as of June 30, 2024, from RMB 38,169,953 thousand as of December 31, 2023[104] - Cash and bank balances decreased to RMB 8,549,473 thousand as of June 30, 2024, from RMB 9,451,878 thousand as of December 31, 2023[101] - Interest-bearing bank borrowings under current liabilities decreased to RMB 8,484,591 thousand as of June 30, 2024, from RMB 11,135,940 thousand as of December 31, 2023[101] - Non-controlling interests increased to RMB 9,276,698 thousand as of June 30, 2024, from RMB 7,695,484 thousand as of December 31, 2023[104] Operational Efficiency and Expenses - Sales and administrative expenses as a percentage of revenue decreased by 0.5 percentage points to 43.1%[7] - Employee costs, including directors' remuneration, totaled approximately RMB 25.15 billion during the reporting period, up from RMB 23.05 billion in the previous year[84] - Employee benefit expenses, including wages and salaries, for the six months ended June 30, 2024, were RMB 2,514.697 million, an increase from RMB 2,304.570 million in the same period in 2023[135] - Depreciation and amortization expenses totaled RMB 510,231 thousand, with the Modern Chinese Medicine and Western Medicine segment accounting for RMB 472,187 thousand[119] - Financial costs for the six months ended June 30, 2024, were RMB 153.739 million, a significant decrease from RMB 293.425 million in the same period in 2023[132] Strategic Partnerships and Investments - In April 2024, the company established a strategic partnership with Boehringer Ingelheim to bring innovative anti-tumor therapies to the Chinese mainland market[92] - The company's investment in Sinovac Life Sciences, a joint venture, resulted in a loss of approximately RMB 86.50 million in the first half of 2024[64] - The company's financial assets, including wealth management products, amounted to approximately RMB 4,605.53 million as of June 30, 2024, representing 6.9% of total assets[67] - The company's equity investments and financial assets are aimed at diversifying its investment portfolio and achieving better returns[69] - The company completed the sale of its subsidiary Zhengda Qingdao in March 2024, recording a pre-tax gain of RMB 1,709,604 thousand and a post-tax gain of RMB 1,574,205 thousand[150] - The company received a cash consideration of RMB 1,455,780 thousand from the sale of Zhengda Qingdao, with an additional RMB 363,940 thousand receivable within one year[152] - The company's discontinued operations, including the sale of its commercial distribution subsidiaries and Zhengda Qingdao, resulted in a net cash inflow of RMB 1,409,679 thousand for the six months ended June 30, 2024[152] - Net cash outflow from operating activities for the discontinued operations was RMB 42,427 thousand in the first six months of 2024, compared to a net inflow of RMB 52,024 thousand in the same period of 2023[155] - Net profit attributable to parent company's ordinary shareholders from discontinued operations was RMB 1,606,350 thousand in the first six months of 2024, a significant increase from RMB 130,750 thousand in the same period of 2023[156] Dividends and Shareholder Returns - The company declared an interim dividend of 3 HK cents per share for the first half of 2024[7] - The company declared an interim dividend of 3 HK cents per share for the first six months of 2024, compared to 2 HK cents per share in the same period of 2023[158][159] ESG and Sustainability - Renewable energy usage increased by 16% year-over-year in the first half of 2024[88] - The company completed carbon audits for two pilot carbon-neutral units and identified 15 major categories of emission reduction opportunities[88] - The company plans to release a feasible carbon neutrality roadmap and improve ESG management across its supply chain in the second half of 2024[89] Cash Flow and Financing - Operating cash flow increased to RMB 3,078,490 thousand, up 15.3% compared to RMB 2,671,118 thousand in the same period last year[109] - Investment cash outflow decreased to RMB 2,040,917 thousand, a significant improvement from RMB 4,074,699 thousand in the previous year, driven by proceeds from the sale of subsidiaries amounting to RMB 1,409,679 thousand[109] - Financing cash outflow was RMB 4,099,463 thousand, slightly higher than the previous year's RMB 4,042,087 thousand, with new bank loans of RMB 6,712,386 thousand partially offset by repayments of RMB 9,396,105 thousand[109] - Cash and cash equivalents decreased by RMB 3,061,890 thousand, ending at RMB 4,469,473 thousand, compared to RMB 3,293,964 thousand at the end of the previous period[109][110] Tax and Regulatory Compliance - The company's tax expense from continuing operations for the six months ended June 30, 2024, was RMB 614,093 thousand, compared to RMB 497,992 thousand in the same period in 2023[138] - Tax expense from discontinued operations for the six months

Investment Rating - The report maintains an "Outperform" rating for Sino Biopharmaceutical [6][11][14]. Core Views - The innovative product portfolio is expected to drive double-digit revenue growth, with innovative product revenue reaching 6.13 billion RMB in 2024H1, a year-on-year increase of 14.8% [2][3][12]. - The company has launched six innovative products in 2023 and expects to maintain a launch rate of 3-5 new products annually in 2025-26, indicating a new life cycle for its product portfolio [3][13]. - The company’s revenue for 2024H1 was 15.87 billion RMB, reflecting an 11.1% increase, with a gross margin of 82.1% [2][12]. Summary by Sections Financial Performance - In 2024H1, the company reported revenue of 15.87 billion RMB (+11.1%), with innovative product revenue of 6.13 billion RMB (+14.8%), accounting for 38.6% of total revenue [2][12]. - The net profit attributable to the parent company was 3.02 billion RMB (+139.7%), while the adjusted net profit was 1.54 billion RMB (+14.1%) [2][12]. - As of June 30, 2024, the company had cash reserves exceeding 20 billion RMB [2][12]. Product and Pipeline Development - The company’s product portfolio is focused on four major areas, with significant growth in the anti-tumor and surgical/analgesic segments, while the liver disease segment saw a decline [4][13]. - The anti-tumor segment generated revenue of 5.36 billion RMB (+19.5%), representing 33.8% of total revenue, while the surgical/analgesic segment grew by 29.9% to 2.58 billion RMB [4][13]. Operational Efficiency - The company has improved operational efficiency through centralized procurement and optimized capacity utilization, resulting in a gross margin increase of 0.3 percentage points to 82.1% in 2024H1 [6][13]. - The sales expense ratio has decreased to 43.1% in 2024H1, reflecting improved productivity through digitalization and compliance management [6][13]. Earnings Forecast and Valuation - Revenue forecasts for 2024-25 have been adjusted to 29.5 billion RMB and 33.9 billion RMB, representing year-on-year growth of 13% and 15% respectively [7][14]. - The net profit attributable to the parent company is projected to be 2.9 billion RMB and 3.5 billion RMB for 2024-25, indicating growth of 26% and 16% respectively [7][14]. - The target price is set at 5.65 HKD per share, based on a PE ratio of 32x for 2024 [7][14].

Investment Rating - The report maintains an "Accumulate" rating for China Biopharmaceuticals [2][5] Core Viewpoints - The company's performance exceeded expectations, with a revenue of RMB 15.87 billion in 2023, representing a year-on-year increase of 11.1%, and a net profit attributable to shareholders of RMB 3.02 billion, up 139.7% year-on-year [2] - The revenue from innovative products is increasing, marking a transition into a new phase for the company, with innovative products generating RMB 6.13 billion in H1 2024, a 14.8% increase year-on-year, accounting for 38.6% of total revenue [2] - The company is focusing on both internal and external pipelines, with multiple key products in late-stage clinical trials or NDA phases, ensuring long-term growth [2] Financial Summary - Revenue for 2023 is projected at RMB 30.79 billion, with a year-on-year growth of 17.5% [2] - The adjusted EPS forecast for 2024-2026 has been revised to RMB 0.23, RMB 0.18, and RMB 0.21 respectively [2] - The gross profit margin for H1 2024 is reported at 82.1%, with a net profit margin showing a continuous upward trend [2]

港股公司报告 | 公司点评 2024 上半年业绩稳定增长，创新转型持续提速 事件 中国生物制药于 8 月 13 日公布 2024 年半年度报告：2024 上半年实现营收 158.7 亿元（yoy+11.1%）；归母净利润 30.2 亿元（yoy+139.7%），同比大幅 增长主要系上半年出售正大青岛产生的收益所致；实现经调整 Non-HKFRS 归母净利润 15.4 亿（yoy+14.0%），利润端表现亮眼。 创新产品（业绩）：创新产品收入占比持续提升，创新转型已见成效 公司 2024H1 创新产品实现收入 61.3 亿元（yoy+14.8%），收入占比提升至 38.6%，增长 1.2pct；5 年内新上市品种收入 60.3 亿元（yoy+39.6%），收入 占比提升至 38.0%。以艾贝格司亭α、贝伐珠单抗、曲妥珠单抗为代表的 产品成为公司 2024H1 业绩增长的核心动力，公司创新转型已见成效。 创新产品（在研管线）：多款创新药品种上市，进入密集收获期 截至 2024 年 6 月，公司 2024 年已获批 4 款新品种：安奈克替尼 （ROS1/ALK/c-Met）、依奉阿克（ALK）、贝莫苏拜单抗（PD- ...

Investment Rating - The report maintains a "Buy" rating for China Biologic Products (1177 HK) with a target price of HKD 4.80, indicating a potential upside of 62.8% from the current closing price of HKD 2.95 [1][2]. Core Insights - The report highlights that the company's performance in the first half of 2024 met expectations, with revenue and adjusted net profit growing by 11% and 14% respectively. The growth is driven by rapid uptake of new products and biosimilars, alongside cost reduction efforts that are expected to enhance profit margins [1][2]. - The company is projected to return to double-digit revenue growth over the next three years, with innovative drugs expected to account for 50% of revenue by 2026 [1][3]. Summary by Sections Financial Performance - In 1H24, revenue and adjusted net profit increased by 11% and 14%, respectively, with highlights including a 15% rise in innovative drug revenue, which now constitutes 39% of total revenue. The generics segment also showed positive growth at 9% [1][3]. - Cost reduction measures have led to a 0.3 percentage point increase in gross margin, with sales and management expense ratios decreasing by 0.5 percentage points. The workforce was reduced by 5.3%, yet productivity improved by 17% [1][3]. Future Projections - The report projects revenue growth to rebound to double digits over the next three years, with innovative drugs expected to grow at a high double-digit rate and generics returning to positive growth [1][3]. - The company plans to launch at least six new products by 2025, which is anticipated to drive revenue growth [1][3]. Valuation - The report adjusts the profit forecasts for 2024-2026 down by 3-5% to RMB 30 billion, RMB 36 billion, and RMB 40 billion, respectively. The DCF valuation model's starting year has been rolled forward to 2025, maintaining the target price of HKD 4.80 [1][3].

Investment Rating - The report maintains a "Buy" rating for the company and raises the target price to HKD 5.5 [1][2]. Core Insights - The company's 1H24 performance exceeded expectations, with total revenue reaching RMB 15.87 billion, representing an 11.1% year-over-year increase and a 33.2% quarter-over-quarter increase. The growth was primarily driven by innovative drug sales, which hit a record high of RMB 6.13 billion, up 14.8% year-over-year and 34.7% quarter-over-quarter [1]. - The report indicates that the company is expected to maintain a double-digit revenue and profit growth guidance for 2024, supported by cost reduction and efficiency enhancement measures that are anticipated to accelerate in the coming years [1][2]. - The innovative drug segment is projected to contribute significantly to revenue, with expectations of reaching RMB 12 billion in sales for the year, accounting for over 40% of total revenue [1]. Financial Performance Summary - For 1H24, the adjusted net profit was RMB 1.54 billion, reflecting a 14% year-over-year increase and a 23.6% quarter-over-quarter increase, driven by higher-than-expected revenue and improved gross margins [1]. - The company expects to maintain a double-digit growth trajectory for both revenue and profit over the next three years, with innovative drug revenue expected to grow at a high double-digit rate [1][4]. - The report highlights a slight decrease in the overall R&D expense ratio to 16.2%, indicating improved efficiency in the use of R&D funds [1][4]. Revenue and Profit Forecast - The projected revenues for the company are as follows: - 2024E: RMB 29.77 billion (up 13.6% year-over-year) - 2025E: RMB 33.45 billion (up 12.4% year-over-year) - 2026E: RMB 37.46 billion (up 12% year-over-year) [3][4]. - The forecasted net profit for the company is expected to be: - 2024E: RMB 2.96 billion - 2025E: RMB 3.42 billion - 2026E: RMB 3.97 billion [3][4]. Market Position and Growth Potential - The innovative drug sales are expected to continue driving growth, with the company anticipating the approval of five new innovative drugs by 2025, which could increase the innovative drug revenue to approximately 45% of total revenue [1]. - The report emphasizes the company's strong commercialization capabilities, which are expected to enhance market share for its innovative drugs [1].