Investment Rating - The report maintains a "Buy" rating for 3SBio (01530) [1] Core Views - 3SBio's 2024H1 performance met expectations, with robust growth in key products and a rich pipeline of innovative drugs [4] - The company's revenue for 2024H1 reached RMB 4.389 billion, a YoY increase of 16.01%, and net profit attributable to shareholders was RMB 1.090 billion, up 11.15% YoY [4] - Key products such as TPIAO, EPO, Yisaipu, and Cyramza showed strong sales growth, with TPIAO sales reaching RMB 2.48 billion, up 22.6% YoY [4] - The company's gross margin improved to 86.51%, up 1.9 percentage points, with effective cost control across sales, management, and R&D expenses [4] - 3SBio is advancing its R&D projects, with multiple products nearing commercialization, including SSS06 for CKD anemia and TPIAO for CLDT, expected to file NDAs in 2024H2 [4] - The company has entered into a cooperation agreement with Hansoh Pharma for the weight-loss indication of semaglutide injection, tapping into the vast weight-loss treatment market [4] - 3SBio has demonstrated strong shareholder returns, distributing dividends and repurchasing shares totaling HKD 860 million in 2024H1, representing over 40% of 2023 operating profit [4] Financial Projections - Revenue for 2024-2026 is projected to be RMB 8.744 billion, RMB 9.535 billion, and RMB 10.269 billion, with YoY growth rates of 12%, 9%, and 8%, respectively [6] - Net profit attributable to shareholders is expected to be RMB 2.013 billion, RMB 2.244 billion, and RMB 2.508 billion for 2024-2026, with YoY growth rates of 30%, 12%, and 12%, respectively [6] - The company's P/E ratios for 2024-2026 are estimated at 7X, 6X, and 6X, respectively [4] Product Performance - TPIAO sales reached RMB 2.48 billion in 2024H1, up 22.6% YoY [4] - EPO sales were RMB 520 million, up 11.3% YoY [4] - Yisaipu sales were RMB 330 million, up 9.5% YoY [4] - Cyramza sales were RMB 160 million, up 48.9% YoY [4] - Mandi sales were RMB 550 million, up 10.0% YoY [4] R&D Progress - SSS06 for CKD anemia has had its NDA accepted [4] - TPIAO for CLDT and 608 (IL-17A antibody) for moderate-to-severe psoriasis are expected to file NDAs in 2024H2 [4] - Winlevi's Phase III bridging clinical trial began enrollment in 2024H1, with an NDA expected in 2025 [4] Shareholder Returns - In 2024H1, 3SBio distributed dividends and repurchased shares totaling HKD 860 million, representing over 40% of 2023 operating profit [4] - Dividend payout was HKD 600 million, with a dividend yield of 4.1% based on the closing price on the ex-dividend date [4] - Share repurchases amounted to HKD 270 million [4]

Financial Performance - Revenue increased by RMB 605.6 million or 16.0% to RMB 4,389.4 million for the six months ended June 30, 2024[2]. - Gross profit rose by RMB 595.8 million or 18.6% to RMB 3,797.4 million, with a gross margin increase from 84.6% to 86.5%[2]. - Net profit attributable to equity holders increased by RMB 109.3 million or 11.1% to RMB 1,089.9 million[2]. - EBITDA grew by RMB 311.0 million or 23.4% to RMB 1,641.5 million, while adjusted operating EBITDA increased by RMB 241.6 million or 17.0% to RMB 1,663.9 million[2]. - Basic earnings per share attributable to ordinary equity holders increased to RMB 0.45 from RMB 0.40[4]. - The company reported a net profit of RMB 1,107.6 million for the period, compared to RMB 986.5 million in the same period last year[5]. - Total revenue for the six months ended June 30, 2024, reached RMB 4,389,445 thousand, representing a 16.0% increase from RMB 3,783,833 thousand in the same period of 2023[16]. - Revenue from the sale of biopharmaceuticals was RMB 4,332,185 thousand, up from RMB 3,688,923 thousand, indicating a growth of about 17.5% year-over-year[19]. - The group's pre-tax profit for the six months ended June 30, 2024, was RMB 314,283 thousand, compared to RMB 207,601 thousand in the same period of 2023, marking an increase of around 51.4%[30]. Assets and Liabilities - Total non-current assets amounted to RMB 14,747.3 million as of June 30, 2024, compared to RMB 14,432.3 million as of December 31, 2023[7]. - Current assets totaled RMB 9,198.9 million, slightly up from RMB 9,192.7 million as of December 31, 2023[7]. - Current liabilities increased to RMB 5,351.4 million from RMB 3,727.6 million as of December 31, 2023[7]. - Non-current liabilities totaled RMB 1,718,897 thousand as of June 30, 2024, a decrease from RMB 3,383,818 thousand as of December 31, 2023[8]. - The equity attributable to owners of the parent company increased to RMB 14,384,294 thousand from RMB 14,033,771 thousand, reflecting a growth of 2.5%[8]. - The total equity increased to RMB 16,875,871 thousand from RMB 16,513,600 thousand, indicating a growth of 2.2%[8]. Cash Flow and Financing - Cash and cash equivalents totaled RMB 2,085,208,000 as of June 30, 2024, a decrease from RMB 2,611,161,000 as of December 31, 2023[38]. - The company has a total cash balance of RMB 4,401,899,000 as of June 30, 2024, down from RMB 4,900,264,000 as of December 31, 2023[38]. - The company's bank loans as of June 30, 2024, totaled RMB 4,167,200,000, down from RMB 4,800,295,000 as of December 31, 2023, representing a reduction of 13.2%[42]. - The total financing costs for the six months ended June 30, 2024, were RMB 104,351 thousand, compared to RMB 88,878 thousand in the same period of 2023, reflecting an increase of about 17.4%[26]. - The group's leverage ratio decreased from approximately 29.3% as of December 31, 2023, to approximately 25.0% as of June 30, 2024, primarily due to a reduction in bank borrowings during the reporting period[99]. Market and Product Development - The company operates solely in the biopharmaceutical sector, focusing on the development, production, marketing, and sales of biopharmaceutical products[15]. - The company continues to explore market expansion opportunities within mainland China and other regions[9]. - The company has a strong pipeline of products, including biologics and small molecule drugs, to broaden its therapeutic areas[49]. - The company aims to enhance its market presence in the domestic weight loss market with the introduction of semaglutide injection[49]. - The company has expanded its product offerings through internal R&D and multiple external strategic collaborations[49]. - The company launched the Mandi foam agent, the first domestically produced minoxidil foam, approved for treating androgenetic alopecia and alopecia areata[50]. - The company signed a cooperation agreement with Shenzhen Hanyu Pharmaceutical Co., Ltd. for the development and exclusive supply of semaglutide injection for weight management, with a milestone payment of up to RMB 270 million[52]. Research and Development - The company is actively developing 28 pipeline products, with 25 of them being innovative drugs in mainland China[68]. - The company has a research team of nearly 700 experienced scientists focused on accelerating clinical development and seeking breakthrough therapies[67]. - The group plans to focus more on the development of innovative drugs, with expectations of new drugs entering commercialization each year starting in 2024[80]. - The group will continue to focus on key research and development areas such as nephrology, autoimmunity, and oncology, accelerating the development of innovative drugs in these fields[81]. - The group has completed Phase III clinical trials for SSS06 (NuPIAO) for chronic kidney disease anemia, achieving the predefined primary endpoint[73]. Employee and Operational Metrics - Employee costs during the reporting period amounted to approximately RMB 721.9 million, compared to RMB 604.4 million in the same period last year, reflecting an increase of about 19.4%[104]. - The group employed a total of 5,607 employees as of June 30, 2024, an increase from 5,411 employees as of December 31, 2023[104]. - The group has a sales and distribution network comprising 2,778 sales and marketing personnel, 1,189 distributors, and 1,786 third-party promoters[78]. Compliance and Governance - The audit committee has been established, consisting of three independent non-executive directors, ensuring effective risk management and internal control systems[110]. - Ernst & Young has confirmed that the financial data in the interim results announcement is consistent with the unaudited interim consolidated financial data[111]. - The interim results announcement will be published on the Hong Kong Stock Exchange and the company's website, ensuring compliance with listing rules[112].

Investment Rating - The report initiates coverage with a "Buy" rating for the company, setting a target price of HKD 9.56, which corresponds to an 11x P/E ratio for 2024 [4][25]. Core Insights - The company is a pioneer in China's biopharmaceutical industry, with core products such as recombinant human thrombopoietin Tevaz (特比澳) and the OTC hair loss treatment product Mandi (蔓迪). The growth of Tevaz is expected to be steady due to expanded indications and increased penetration in the oncology field [1][15]. - The hair loss and acne treatment markets present significant demand, with Mandi and the investigational acne treatment expected to continue driving growth for the company [2][15]. - The company's innovative pipeline is approaching a harvest period, with multiple blockbuster products expected to be approved between 2025 and 2027 [2][21]. Financial Overview - The company achieved revenue of RMB 7.816 billion in 2023, representing a year-on-year growth of 13.8%. The revenue compound annual growth rate (CAGR) from 2019 to 2023 was 10.1% [3][15]. - The net profit for 2023 was RMB 1.586 billion, showing a decline of 16.9% year-on-year, primarily due to the impact of zero-coupon convertible bonds and changes in fair value of financial assets [3][18]. - The company maintains a robust gross margin above 80%, reaching 85% in 2023, while the adjusted net profit margin was 25% [17][18]. Product and Market Analysis - Tevaz has a dominant position in the Chinese thrombocytopenia treatment market, with a market share of 65% in 2023. The sales revenue for Tevaz grew by 23.8% year-on-year to RMB 4.2 billion [1][16]. - Mandi leads the domestic minoxidil market with a 72.6% market share, achieving sales revenue of RMB 1.12 billion in 2023, reflecting a year-on-year growth of 25.8% [2][15][29]. - The company has a diverse product matrix around the Mandi brand, including various formulations and delivery systems, which are expected to enhance brand value and market penetration [30]. Research and Development Pipeline - The company has a rich R&D pipeline with 29 products under development, of which 15 are in late-stage clinical trials. Key upcoming products include long-acting EPO SSS06 and several monoclonal antibodies targeting various conditions [21][22][24]. - The company is focusing on expanding its presence in the hematology/oncology, nephrology, and dermatology sectors, with several products expected to be launched in the coming years [21][22][23]. Market Potential - The hair loss treatment market in China is substantial, with over 250 million individuals affected. The market for hair loss treatment and care products is projected to grow from RMB 106.9 billion in 2021 to RMB 203.5 billion by 2030, with a CAGR exceeding 7% [27][30]. - The company is well-positioned to capitalize on the growing demand for hair loss treatments, particularly with the increasing acceptance of minoxidil products among consumers [2][27].

Investment Rating - The report initiates coverage with a "Buy" rating for the company, with a target price of HKD 9.56, representing a potential upside of 53.4% from the current price of HKD 6.23 [1][3][24]. Core Insights - The company is a pioneer in China's biopharmaceutical industry, with robust growth in core products such as recombinant human thrombopoietin Tevaz (特比澳) and the OTC hair loss treatment product Mandi (蔓迪) [1][14]. - Tevaz is expected to maintain steady revenue growth due to expanded insurance reimbursement coverage and ongoing indication expansions, with a 23.8% year-on-year sales increase in 2023 [1][15]. - The hair loss treatment market is significant, with Mandi capturing a 72.6% market share in the minoxidil market, and the company is expanding its product matrix to include various hair loss treatment options [1][14][29]. - The innovation pipeline is entering a harvest phase, with multiple blockbuster products expected to be approved between 2025 and 2027, including long-acting EPO SSS06 and various monoclonal antibodies [1][20][24]. Financial Summary - The company achieved a revenue of RMB 7.816 billion in FY23, reflecting a 13.8% year-on-year growth, with projections for continued growth in the coming years [2][14]. - The net profit for FY23 was RMB 1.586 billion, a decrease of 16.9% year-on-year, primarily due to specific financial impacts, but adjusted operating net profit showed a 17.7% increase [2][17]. - The company expects a revenue compound annual growth rate (CAGR) of 10.9% and a net profit CAGR of 13.4% from 2023 to 2026 [1][24]. Market Position - Tevaz holds a dominant position in the Chinese thrombocytopenia treatment market, with a 65.0% market share, and is expanding its indications to include treatment for chronic liver disease-related thrombocytopenia [1][15][30]. - Mandi leads the OTC hair loss treatment market, with a strong brand recognition and a significant growth trajectory, supported by a diverse sales strategy across online and offline channels [1][14][29]. Innovation Pipeline - The company has a rich pipeline focusing on various therapeutic areas, with 29 products in development, including 15 in late-stage clinical trials [20][23]. - Key products in the pipeline include Tevaz for new indications, long-acting EPO SSS06, and several monoclonal antibodies targeting autoimmune diseases [20][21][23].

更新报告 买入 蔓迪、特比澳持续高增长，研发管线丰富 三生制药（1530.HK） 2023-07-31 星期三 | --- | --- | |----------|-----------| | 目标价： | 9.03 港元 | | 现 价： | 5.94 港元 | | 预计升幅 | : 52% | 重要数据 | --- | --- | |-------------------|-----------| | 日期 2024-7-30 | | | 收盘价（港元） | 5.94 | | 总股本（亿股） | 24.17 | | 总市值（亿港元） | 143.56 | | 净资产（亿元） | 153.62 | | 总资产（亿元） | 258.65 | | 52 周高低（港元） | 9.10/4.58 | | 每股净资产（元） | 6.3 | 数据来源：Wind、国元证券经纪(香港)整理 主要股东 TMF (Cayman) Ltd.（23.66%） Decade Sunshine Limited (19.55%) BlackRock, Inc.（6.1%） 相关报告 深度报告：三生制药-20200924 更新报告：三生制 ...

2024年05月29日 公 司点评 公 买入 / 维持 司 三生制药(01530) 研 究 目标价: 昨收盘:6.37 医药 减重领域合作达成，与翰宇药业发挥协同效应 事件：2024年5月28日，公司的全资附属公司三生蔓迪翰宇药业签 ◼ 走势比较 署《司美格鲁肽注射液合作协议》。协议约定，翰宇药业与三生蔓迪共同 合作开发、独家供应/采购、销售分成司美格鲁肽注射液(减重适应症)。 10% 三生蔓迪将根据协议约定向翰宇药业支付最高 2.7 亿元里程碑付款，其 太 0% 中包含4500万元的临床前技术成果对价款；此外，三生蔓迪还将向翰宇 平 (10%)92/5/32 01/8/32 22/01/32 3/1/42 61/3/42 82/5/42 药业支付独家采购价以及销售提成。 点评： 洋 (20%) 与翰宇药业深度合作，布局减重市场。本次合作三生制药将取得翰宇 证 (30%) 药业的司美格鲁肽开发权，规格与原研在中国大陆地区获批规格一致。合 券 (40%) 作区域包括：1）中国；2）墨西哥、巴西、埃及、巴基斯坦；3）海湾阿 股 拉伯国家合作委员会成员国及印度尼西亚。三生制药需要支付的费用包 份 三生制药 恒生指数 ...

Welcome investors to the Summer Event Strategy Meeting held by Huayan Medical Co., Ltd. and Lu Yuandong. The host of this meeting is Mr. Tao Tanguo, the chief of Huayan Medical Co., Ltd. This is a three-way communication between the listed companies. We are honored to invite Mr. Zhao, the head of the company, to communicate with us today. Today's communication is mainly divided into two parts, the company introduction and Q&A part. First of all, let's welcome the company's leader, Mr. Zhao, to give an overv ...

Summary of the Conference Call Company and Industry Involved - The conference call involves **Huayan Pharmaceutical** and its leadership team, including Mr. Tang Guochao and Mr. Zhao [1] Core Points and Arguments - The meeting is structured into two main parts: **company introduction** and **Q&A session** [1] Other Important but Possibly Overlooked Content - The call is described as a **three-way communication** between listed companies, indicating a collaborative approach to discussing strategies and insights [1]

Market Position and Share - The company holds a 65.0% market share in the platelet reduction therapy market in mainland China for its product Tevazo as of 2023[6]. - The company has a 42.2% market share in the rhEPO market in mainland China, maintaining its leadership for over 20 years[6]. - The company’s product Mandi has a dominant market share of 72.6% in the minoxidil tincture market in mainland China as of 2023[6]. - Te Bi Ao has captured a 33.4% market share by volume and a 65.0% market share by sales in the treatment of thrombocytopenia in mainland China[24]. - Yisaipu holds a 22.7% market share in the TNFα inhibitor market in mainland China as of 2023, having been the first TNFα inhibitor launched in the region[26]. Financial Performance - The company's revenue for 2023 reached RMB 7,815,938 thousand, marking a significant increase from RMB 6,865,735 thousand in 2022, representing a growth of approximately 13.8%[10]. - Gross profit for 2023 was RMB 6,641,640 thousand, up from RMB 5,671,574 thousand in 2022, reflecting a growth of about 17.1%[10]. - The adjusted operating EBITDA for 2023 was RMB 2,768,353 thousand, compared to RMB 2,303,777 thousand in 2022, indicating an increase of approximately 20.2%[10]. - The company's total assets reached RMB 23,625,028 thousand in 2023, an increase from RMB 22,008,962 thousand in 2022, reflecting a growth of approximately 7.3%[10]. - The total liabilities increased to RMB 7,111,428 thousand in 2023 from RMB 6,645,381 thousand in 2022, representing a growth of about 7.0%[10]. Research and Development - The company has 29 active R&D projects, with 25 being innovative drugs developed in mainland China[6]. - The company has 29 products in its research pipeline, with 5 products approved for market or passed consistency evaluation in 2023[13]. - The company is actively developing 29 products, with 25 of them focused on innovative drug development in mainland China[38]. - The R&D team consists of over 600 experienced scientists focused on accelerating clinical development and seeking breakthrough therapies[37]. - The company is developing multiple innovative biological products, including SSS06 (NuPIAO) for anemia and CS1003 (anti-PD-1 antibody) for advanced liver cancer[36]. Strategic Initiatives - The company aims to expand its product marketing to developed countries and has established operations in 25 countries as of 2023[7]. - The company is focusing on developing therapies for unmet medical needs, particularly in the biotechnology sector, which is supported by the Chinese government[6]. - The company has established strategic partnerships, including exclusive rights for the anti-PD-1 monoclonal antibody Nofazinlimab (CS1003) in mainland China, enhancing its product portfolio[15]. - The company plans to submit a New Drug Application (NDA) for NuPIAO (rESP, SSS06) in 2024 after completing Phase III clinical trials for treating anemia in chronic kidney disease[13]. - The company aims to optimize the structure of chronic disease medications and deepen its presence in grassroots markets as part of its future development strategy[16]. Market Expansion and Product Launches - The launch of the Minoxidil foam product, Man Di, has been approved, which is the first domestically produced minoxidil foam in China, showing comparable efficacy to ROGAINE®[22]. - The NDA for Li Mei Zhi has been approved for the treatment of pruritus in hemodialysis patients, marking it as the first selective opioid kappa receptor agonist approved for this indication in China[20]. - TRK-820, a drug for treating pruritus in hemodialysis patients, has received NDA approval in mainland China, addressing a significant unmet medical need[30]. - The company plans to continue expanding the clinical application and market penetration of its products, focusing on middle and lower-tier cities[26][27]. - The company aims to launch new drugs into commercialization each year starting in 2024, including long-acting erythropoietin and other self-developed or collaborative products[48]. Corporate Governance and Management - The company has a comprehensive leadership structure with experienced executives overseeing various subsidiaries and initiatives[85]. - The board consists of two executive directors, one non-executive director, and four independent non-executive directors, ensuring compliance with the minimum requirements set by the Hong Kong Stock Exchange[156]. - The company emphasizes the importance of compliance with anti-corruption laws to maintain its market position and access to public procurement[79]. - The independent non-executive directors collectively bring over 28 years of experience in the financial sector, with significant roles in major financial institutions such as Deutsche Bank and UBS[87]. - The company has established a remuneration committee to review the remuneration policies for all directors and senior management, considering the company's performance and market practices[113]. Employee and Operational Insights - The company employs 5,412 staff across its operational facilities in Shenyang, Shanghai, Hangzhou, Shenzhen, and Como, Italy[7]. - Employee costs for the reporting period amounted to approximately RMB 1,271.5 million, compared to RMB 1,254.4 million in the same period of 2022[75]. - The company emphasizes the importance of attracting, recruiting, and retaining quality employees, providing regular training to maintain employee quality, knowledge, and skills[144]. - The company has a large sales and distribution network in mainland China, consisting of approximately 2,724 sales and marketing personnel, 1,146 distributors, and 2,061 third-party promoters[47]. - The company recognizes the benefits of a diverse board and has adopted a policy to promote diversity among board members[156]. Challenges and Risks - The company faces intense competition in the biotechnology and pharmaceutical industry, which may hinder its ability to compete effectively with existing and future competitors[76]. - The government’s centralized procurement policies may lead to significant price reductions for products, potentially affecting revenue and profit levels negatively[77]. - The approval process for new drugs by the National Medical Products Administration can take several years and may involve high costs and uncertainties[78]. - The management team acknowledges the risks associated with corruption and improper promotion of products, which could damage the company's reputation and lead to regulatory investigations[79]. - The company may lose market share and face adverse impacts on revenue and profitability if it fails to win bids in provincial tendering processes for selling products to hospitals[77]. Corporate Social Responsibility - The group made donations of approximately RMB 21.6 million to various medical charity projects during the reporting period[141]. - The group has established detailed internal rules regarding environmental protection and complies with national emission standards[143]. - The company maintains long-term relationships with major distributors based on qualifications, reputation, market coverage, and sales experience[145]. - The company emphasizes long-term financial performance as a governance goal, focusing on innovation in core therapeutic areas[174]. - The company is committed to maintaining high standards of corporate governance, adhering to the corporate governance code as per the Hong Kong Stock Exchange regulations[153].

Summary of Conference Call Company Overview - The company expressed gratitude towards investors and market participants for their attention to the business [1] Financial Performance - The company reported strong performance for the entire year, indicating positive revenue and marketing results [1]