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].

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 158.7 billion, an increase of 11.1% compared to RMB 142.8 billion for the same period in 2023[2]. - Profit for the period was RMB 46.1 billion, representing a significant increase of 70.7% from RMB 27.0 billion year-on-year[2]. - Adjusted net profit attributable to shareholders was RMB 30.2 billion, up 139.7% from RMB 12.6 billion in the previous year[2]. - The company declared an interim dividend of 3 Hong Kong cents per share for the six months ended June 30, 2024[2]. - The total comprehensive income for the period was RMB 4,865,985 thousand, compared to RMB 2,875,973 thousand in 2023, indicating strong overall financial performance[51]. - The net profit attributable to the company's shareholders for the first half of 2024 was RMB 3,017,162 thousand, up from RMB 1,258,784 thousand in 2023, indicating a significant increase of approximately 139.8%[48]. Revenue Breakdown - Innovative product revenue reached RMB 61.3 billion, a growth of 14.8% compared to RMB 53.4 billion in the same period last year[2]. - New product revenue was RMB 60.3 billion, reflecting a substantial increase of 39.6% from RMB 43.2 billion year-on-year[2]. - Revenue from oncology drugs was approximately RMB 536,026,000, accounting for about 33.8% of total revenue, with a year-on-year growth of about 19.5%[24]. - Revenue from surgical and analgesic drugs was approximately RMB 258,284,000, accounting for about 16.3% of total revenue, with a year-on-year growth of about 29.9%[25]. - The revenue from other products was approximately RMB 275,055,000, accounting for about 17.3% of total revenue, with a year-on-year growth of about 23.2%[26]. Research and Development - Research and development expenses totaled approximately RMB 276,057,000, accounting for about 17.4% of the company's revenue for the six months ended June 30, 2024[33]. - The company has 76 innovative products under development, including 46 oncology drugs and 6 liver disease drugs[33]. - The company has 43 innovative drug candidates in clinical development in the oncology field, with 3 in the registration application stage and 5 in Phase III trials, expecting 4 innovative drugs and 8 biosimilars to be approved in the next three years (2024-2026)[12]. - The R&D pipeline includes 6 innovative candidates in the liver disease area, with 1 in Phase III and 5 in Phase II, and 3 biosimilars or generics, with 2 in the market application stage and 1 in BE testing[15]. - The company is actively expanding its clinical pipeline and expects to leverage its proprietary antibody platform for further innovative drug development[14]. Market Position and Recognition - The company continues to focus on innovation and aims to become a leading global pharmaceutical enterprise[4]. - The company has been recognized as one of the "Top 50 Pharmaceutical Companies" by Pharmaceutical Executive magazine for six consecutive years from 2019 to 2024[6]. - The company was included in the MSCI Global Standard Index as a constituent stock of the China Index, effective May 31, 2013[6]. - The company was selected as a constituent stock of the Hang Seng Composite Industry Index and the Hang Seng Composite Small Cap Index, effective March 8, 2010[6]. Regulatory Approvals - The company has received approval for four innovative products from the National Medical Products Administration (NMPA) during the reporting period[8]. - The company received NMPA approval for Bemosituzumab (anti-PD-L1 monoclonal antibody) in April 2024 for first-line treatment of extensive-stage small cell lung cancer, showing historical best median progression-free survival (mPFS) and median overall survival (mOS) in clinical trials[10]. - Anaplatin (anaplastic kinase inhibitor) was approved in April 2024 for treating ROS1-positive locally advanced or metastatic non-small cell lung cancer, demonstrating significant efficacy and safety in clinical trials[10]. - The third-generation long-acting G-CSF product "Yilishu" (Aibegersitin α) was approved by NMPA in May 2023 and has been included in the national medical insurance catalog[9]. Financial Management - The group has a cash and bank balance of approximately RMB 854,947,000 and total financial management products amounting to approximately RMB 460,553,000, resulting in total reserves of approximately RMB 2,233,600,000[22]. - The group recorded revenue of approximately RMB 1,587,440,000, an increase of about 11.1% compared to the same period last year[21]. - The group expects to have three innovative drugs and eight biosimilars or generic drugs approved for the surgical and analgesic field in the next three years (2024-2026)[20]. - The company has no significant contingent liabilities as of June 30, 2024, consistent with the previous year[39]. - The group has approximately RMB 47,705 million in pledged assets as of June 30, 2024, down from RMB 149,400 million as of December 31, 2023[38]. Corporate Governance and ESG - The company is committed to enhancing its ESG governance and has set actionable carbon neutrality goals for the future[43]. - The company has been recognized in multiple sustainability indices, including the FTSE4Good Index Series, reflecting its commitment to long-term value and sustainable development[43]. - The company has implemented an employee stock incentive plan to retain and motivate selected participants for ongoing operations and development[40]. - The company complied with the corporate governance code during the reporting period, with a notable exception regarding the attendance of independent non-executive directors at the annual general meeting[95]. Investor Relations - The company actively communicated with investors, holding an investor presentation in March that attracted nearly 500 participants[34]. - The group participated in over 500 investor communication meetings during the reporting period, including one-on-one meetings and conference calls[35].

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 69.7% from the current closing price of HKD 2.83 [1][10]. Core Views - The report highlights a strong certainty of revenue and net profit growth exceeding 10% in 1H24, driven by the continued sales growth of new oncology products and robust performance in core surgical products [1]. - The company aims to complete five business development (BD) transactions in 2024, with four expected in 2H24, focusing on mid-to-late stage or near-commercialization products [1]. - The impact of recent drug price regulations on sales is limited, with no significant price discrimination between retail and hospital channels [1]. Financial Performance Summary - Revenue is projected to grow from RMB 26,199 million in 2023 to RMB 29,395 million in 2024, reflecting a year-on-year growth of 12.2% [4][11]. - Net profit is expected to increase from RMB 2,332 million in 2023 to RMB 2,844 million in 2024, marking a growth of 20.2% [4][11]. - The company maintains a dividend payout ratio of over 30% and plans to continue share buybacks after the interim report [1]. Product Updates - Established products like Flurbiprofen gel patch are expected to see a 20% sales increase, compensating for price reductions due to provincial procurement [2]. - New products, particularly biosimilars, are rapidly gaining market share, with innovative drugs projected to contribute 43% to total revenue [2]. - The report anticipates the launch of several new products by 2025, including CDK2/4/6 inhibitors and KRAS G12C inhibitors, which will strengthen the company's position in the oncology market [2]. Valuation and Forecast Adjustments - The report raises the net profit forecast for 2024-2026 by 2-3% to reflect stronger visibility in performance recovery, maintaining a DCF target price of HKD 4.80 [2][5]. - The company is expected to achieve a price-to-earnings (PE) ratio of 25 times and a price-to-earnings growth (PEG) ratio of 1.4 times for 2024-2026 [2].

Investment Rating - The report assigns a "Buy" rating for the company with a target price of HKD 3.25, indicating a potential upside of 15.6% from the current price of HKD 2.81 [1]. Core Insights - The company is expected to see a gradual increase in the proportion of innovative drugs, which will likely enhance revenue growth in the future. The innovative drug revenue grew by 13.3% year-on-year to HKD 9.89 billion, accounting for 37.8% of total revenue [1]. - The company’s adjusted net profit for 2023 is projected to increase by 1.5% to HKD 2.59 billion, despite a decline in net profit attributable to shareholders by 8.3% to HKD 2.33 billion [1]. - The company has a robust pipeline of innovative products, with several expected to launch in the coming years, which will contribute to revenue growth [1]. Financial Summary - For 2023, the company reported total revenue of HKD 26.2 billion, a slight increase of 0.7% year-on-year. The revenue breakdown includes oncology drugs (33.6%), liver disease (14.6%), respiratory (11.3%), and others [1][2]. - The gross margin decreased by 1.8 percentage points to 81.0%, while R&D expenses amounted to HKD 4.7 billion, representing 18% of total revenue [1]. - The company’s operating cash flow decreased by 3% year-on-year to HKD 6.07 billion, with cash reserves reaching HKD 21.1 billion, including net cash of HKD 9.27 billion [1]. Product Pipeline - The company’s innovative product pipeline includes several key drugs, with expected launches in 2024 and 2025, such as Bemarituzumab and TQB3616, which are anticipated to significantly impact revenue [1]. - The company’s subsidiary, invoX, has shown promising results with its FS222 product, indicating strong potential for future development [1]. Market Position - The company has a market capitalization of HKD 52.8 billion, with a P/E ratio of 20.7 for 2024, reflecting its growth potential in the pharmaceutical industry [1][2].

Investment Rating - The report maintains a "Buy" rating for China Biopharmaceutical (1177) [2][3]. Core Views - The company is experiencing a harvest period with multiple pipelines coming to fruition, including the approval of self-developed PD-L1 inhibitors and other innovative drugs. The stock incentive plan reflects confidence in long-term development [2]. - The company has adjusted its EPS forecasts for 2024-2026 to 0.15, 0.18, and 0.21 RMB respectively, up from previous estimates [2]. - The strategic partnership with Boehringer Ingelheim aims to co-develop oncology drug pipelines in China, enhancing the company's clinical pipeline [2]. Financial Summary - Revenue for 2023 is projected at 26,199 million RMB, with a growth forecast of 14.8% for 2024, 10.5% for 2025, and 12.7% for 2026 [6]. - The net profit for 2023 is estimated at 2,332 million RMB, with expected growth rates of 24.7% in 2024, 16.0% in 2025, and 15.2% in 2026 [6]. - The company's PE ratio is projected to decrease from 25 in 2023 to 14 by 2026, indicating potential valuation improvement [6].

Financial Performance - The company reported a continuous growth in revenue, with a year-on-year increase of 15% in the last fiscal year, reaching approximately CNY 10 billion[24]. - In 2023, the company's revenue reached RMB 26,199,409 thousand, a slight increase from RMB 26,026,164 thousand in 2022, while the cost of sales was RMB (4,989,877) thousand compared to RMB (4,487,616) thousand in the previous year[25]. - Gross profit for 2023 was RMB 21,209,532 thousand, down from RMB 21,538,548 thousand in 2022, indicating a decrease of approximately 1.5%[25]. - The net profit attributable to the parent company was RMB 2,331,939 thousand in 2023, a decrease of 8.3% from RMB 2,543,570 thousand in 2022[25]. - The total profit for the year, including discontinued operations, was RMB 5,097,398 thousand, slightly up from RMB 5,002,618 thousand in 2022[25]. - The company reported a pre-tax profit of RMB 5,409,906 thousand for 2023, compared to RMB 5,214,869 thousand in 2022, showing a growth of approximately 3.8%[25]. - The company recorded revenue of approximately RMB 26,199.41 million, an increase of about 0.7% compared to the same period last year[59]. - Profit attributable to equity holders of the parent company was approximately RMB 2,331.94 million, a decrease of about 8.3% year-on-year[59]. - The company’s total profit for the year 2023 was RMB 5,097,398 thousand, slightly up from RMB 5,002,618 thousand in 2022, representing an increase of about 1.89%[175]. - The company’s financial costs for 2023 were RMB (495,237) thousand, compared to RMB (429,494) thousand in 2022, reflecting an increase of approximately 15.34%[175]. Research and Development - The innovative drug 福可維 (Anlotinib Hydrochloride Capsules) received regulatory approval in May 2018, contributing significantly to the company's oncology product line[17]. - The company has successfully developed a pipeline of innovative drugs, including 安尼可 (Pamiparib Injection) and 亿立舒 (Aibolizumab Injection), which are expected to drive future growth[5]. - Research and development expenses for 2023 were RMB (4,402,973) thousand, an increase from RMB (4,164,498) thousand in 2022, reflecting a focus on innovation[25]. - The group has 43 innovative drug candidates in the oncology field at clinical stages, including five in the listing application stage and 13 in Phase II trials, with expectations of seven innovative drugs and nine biosimilars being approved from 2024 to 2026[36]. - The group is actively developing D-1553, a KRAS G12C inhibitor, with plans for multiple clinical trials and a potential market launch in the coming years[36]. - The company aims to enhance R&D efficiency and quality in four major therapeutic areas: oncology, liver disease, respiratory, and surgical/pain relief[61]. - The company has 145 products under development, including 60 oncology drugs and 67 Class I innovative products[74]. Market Position and Strategy - The company has been recognized as one of the "Top 50 Global Pharmaceutical Companies" for five consecutive years from 2019 to 2023, highlighting its strong market position[16]. - The company plans to expand its market presence internationally, leveraging its strong R&D capabilities and established production bases across China[6]. - The company is committed to enhancing its market position through strategic initiatives, including potential mergers and acquisitions, to drive growth in a competitive landscape[33]. - The company is focused on business development and expanding its operational capabilities through strategic partnerships and collaborations[157]. - The company is actively involved in mergers and acquisitions, with a focus on expanding its market presence and enhancing its product offerings[156]. Corporate Governance - The company adheres to high standards of corporate governance, ensuring accountability and promoting shareholder interests[86]. - The board consists of seven executive directors, including the chairperson and CEO, and five independent directors[91]. - Independent directors account for more than one-third of the board, providing valuable independent perspectives and judgments[92]. - The board has established various committees, including an executive committee, audit committee, remuneration committee, nomination committee, and ESG committee[90]. - The company has a structured approach to corporate governance, including the formulation and review of governance policies and practices[93]. - The company emphasizes the importance of independent directors, with those serving over nine years requiring additional disclosure for re-election[95]. Environmental, Social, and Governance (ESG) Initiatives - The company achieved a total of 651 ESG indicators managed through its digital platform, covering all key member enterprises' ESG key performance management[83]. - The company was recognized as a "National Green Factory" and "Provincial Green Factory" for its commitment to building an environmentally friendly enterprise[84]. - The company is focused on ESG initiatives, with plans to invest 5 million in sustainability projects over the next two years[161]. - The ESG strategy emphasizes "CARE," focusing on disease treatment, pharmaceutical accessibility, environmental friendliness, and win-win relationships[104]. - The company actively engaged in social responsibility initiatives, contributing to disaster relief, rural revitalization, and health equity[84]. Financial Position and Assets - The total assets of the company as of 2023 amounted to RMB 63,604,819 thousand, while total liabilities were RMB (25,434,866) thousand, resulting in net assets of RMB 38,169,953 thousand[25]. - The company maintained a strong liquidity position with cash and bank balances of approximately RMB 94,518.8 million as of December 31, 2023, down from RMB 120,662.2 million as of December 31, 2022[77]. - The asset-to-liability ratio improved to approximately 40.0% as of December 31, 2023, from 40.8% as of December 31, 2022[80]. - The company’s total equity increased to RMB 38,169,953 as of December 31, 2023[126]. - The company’s total current assets decreased to RMB 23,805,531 thousand in 2023 from RMB 25,934,905 thousand in 2022, a decline of approximately 8.2%[178]. Shareholder Information - The company declared an interim dividend of HKD 0.02 per share, totaling approximately HKD 367,985,000 (equivalent to about RMB 332,324,000)[123]. - The board proposed a final dividend of HKD 0.03 per share for the fiscal year ending December 31, 2023, subject to shareholder approval[123]. - The company maintained a public shareholding ratio of over 25% throughout the year[150]. - The company has a total of 2,280,754,761 shares held by Ms. Xie Qirun, representing approximately 12.13% of the issued share capital[138]. - The company has implemented a share buyback plan with a total budget of up to HKD 1 billion, of which HKD 141.42 million was utilized for share repurchases and incentive share purchases by December 31, 2023[81].

参加本次中金公司中国生物制药订划更新订划会议目前所有参会者均处于静音状态现在开始播报免费声明声明播报完毕后主持人可直接开始发言 谢谢本次会议为中国国际金融股份有限公司中金公司闭门会议仅限受邀嘉宾参会未经中金公司和演讲嘉宾书面许可 任何机构和个人不得以任何形式将会议内容和相关信息对外公布转发转载传播复制编辑修改等如有上述违法行为中兴公司保留追究相关方法律责任的权利This meeting is a closed-door meeting of China International Capital Corporation Limited, CICC, and only invited guests allowed to attend. 大家下午好欢迎参加中国生物质药近况更新电话交流会 那我是中金医药分析师余波和我一起主持的还有我的同事石正阳那么今天呢也是看的就是本周也是看到公司的一个股价有一些波动然后当然这个其实也是跟港股近期的整个这个表现也是 比较相关的但是我们还是邀请公司的资本市场负责人雷明总再跟我们更新一下公司的一个近况以及其实我们最近也看到公司其实也发了挺多公告关于股权回购股票的回购然后也关于很多 产品 ...

Core Viewpoint - China Biopharmaceutical's innovative drug Rovadicitinib (TQ05105) for treating high-risk myelofibrosis (MF) has met its primary endpoint in key registration clinical trials, and the company is preparing to submit a marketing application to the National Medical Products Administration (NMPA) [1] Group 1 - TQ05105 is a novel JAK/ROCK inhibitor with a unique chemical structure, showing significant inhibition of JAK family kinase and ROCK kinase activities, leading to reduced phosphorylation levels of STAT3 and STAT5, thereby exerting anti-tumor activity [1] - The drug demonstrated favorable pharmacokinetics and safety in Phase I clinical trials, with a best spleen reduction rate of 63.79% and a symptom improvement rate of 87.50%, indicating its potential to provide more clinical options for MF patients [1][1] Group 2 - MF is a proliferative bone marrow disease that can progress to bone marrow failure or acute leukemia, with a significant unmet clinical need as only one product is currently approved for MF treatment in China [1] - The company is also conducting several combination studies involving TQ05105 with BET inhibitors or BCL-2 inhibitors for treating high-risk myelofibrosis, with preliminary results appearing positive [1] - The ongoing investment in innovative drug development is yielding breakthroughs, positioning the company's pipeline for a harvest period [1]

股 票 研 究 [Table_industryInfo] 医药 [Table_Main[中TIna国fbole] 生_T物itle制] 药（1177） [评Tab级le_：Invest] 增持 当前价格（港元）： 2.97 降本增效成果显著，创新转型迎收获期 2024.04.03 海 [交Ta易bl数e_据Market] 外 谈嘉程 52周内股价区间（港元） 2.66-4.62 公 当前股本（百万股） 18,801 021-38038429 当前市值（百万港元） 55,840 司 tanjiacheng@gtjas.co （ 证书编号 BTE865 [Table_PicQuote] 中 本报告导读： 国 公司2023年业绩整体符合预期。聚焦肿瘤、肝病、呼吸、外科/镇痛四大领域，创新 转型持续提速。多重举措下运营效率持续提高，降本增效效果显著。维持增持评级。 香 摘要： 港 [Tabl维e_持Su“mm增a持ry]”评级。公司2023年实现收入262.0亿元(同比+0.7%)(剔 ） 除已终止经营业务)，归母净利润 23.3 亿元(同比-8.3%)，经调整 Non-HKFRS归母净利润25.9亿元(同比+1. ...