Summary of Via Biotechnology Conference Call Company Overview - **Company**: Via Biotechnology - **Industry**: Biotechnology and Pharmaceutical Development Key Points and Arguments AI-Driven Drug Design - Via Biotechnology utilizes an AI drug expert model that combines protein and chemical large language models to enhance structure-based drug design capabilities, particularly in understanding protein-small molecule interactions, significantly accelerating lead compound discovery and optimization [2][3] - The AI-driven drug design process allows for modeling and molecular generation that considers multiple properties such as activity and ADMET, reducing the R&D cycle time by 2-3 times and cutting costs by approximately 50%, outperforming traditional drug design methods [2][6] Antibody Discovery Efficiency - The AI-driven antibody discovery process can complete sequence design in less than a week, reducing the number of tests by 10^7 to 10^8 times and shortening experimental validation periods to 2-3 weeks, thus significantly improving efficiency and data quality [2][7] AI Drug Design Platform - The AI-driven drug design platform includes three modules: V-Sector, V-Orb, and V-Mental, which provide foundational computational chemistry tools, principles of molecular interactions, and generative AI models, respectively. This platform enhances R&D efficiency by 400% with a success rate exceeding 85% [2][8] PCSK9 Molecule Development - Via Biotechnology designed the PCSK9 molecule, which is currently in clinical phase II development by AstraZeneca. Results indicate that patients' low-density lipoprotein levels reached target ranges, with ADMET data showing an accuracy exceeding 80% compared to platform predictions, validating the AI algorithm's early-stage application value in drug development [2][9] CDMO Business Growth - The CDMO (Contract Development and Manufacturing Organization) business is progressing steadily, with multiple projects on track for commercialization by the end of 2025 and 2026. Current project capacity utilization has reached over 70%, contributing significantly to revenue and profit growth [4][23][24] Competitive Landscape and Advantages - In the AI pharmaceutical sector, Via Biotechnology's main advantage lies in its deep understanding of mechanisms and a comprehensive platform, which is crucial for integrating drug design and computational technology. The company emphasizes the importance of collaboration and communication among teams to enhance research and development [18][19] Geopolitical Factors - The impact of U.S.-China relations and geopolitical factors on Via Biotechnology's business is currently unclear, though potential tariff changes could affect operations. However, the company has not observed significant shifts in customer behavior due to political tensions [20][21] AI's Impact on Business Growth - AI is increasingly recognized for its value in drug development, with many pharmaceutical companies exploring AI-driven methods. The integration of AI is expected to save time and costs while enhancing project outcomes, leading to significant business growth for Via Biotechnology [22] Project and Client Development - Via Biotechnology is actively pursuing new clients in the CDMO sector, with ongoing discussions with major pharmaceutical companies in Europe to explore commercialization opportunities [27] Overall Business Development - The company is experiencing positive developments across its various business segments, with a strong focus on integrating AI technology to drive further growth and innovation [28]

Financial Performance - The company reported total revenue of RMB 1,986.7 million for the year, with a gross profit of RMB 687.4 million and a net profit of RMB 222.0 million, a significant turnaround from a net loss of RMB 99.8 million in the previous year[11]. - Adjusted net profit increased by approximately 50.6% year-on-year to RMB 314.6 million, primarily driven by the recovery of CRO business growth in the second half of the year and improved operational efficiency[11]. - The revenue for the reporting period was approximately RMB 1,986.7 million, a decrease of 7.8% compared to RMB 2,155.6 million in the same period last year[18]. - The gross profit for the reporting period was approximately RMB 687.4 million, down 6.9% from RMB 738.5 million in the previous year[19]. - The net profit for the reporting period was approximately RMB 222.0 million, compared to a net loss of RMB 99.8 million in the same period last year[20]. - The adjusted net profit under non-IFRS was approximately RMB 314.6 million, an increase from RMB 208.8 million in the previous year[20]. - The company reported a gross margin of 34.6%, slightly up from 34.3% in the previous year[16]. - Revenue decreased from RMB 2,155.6 million to RMB 1,986.7 million, a decline of approximately 7.8% year-over-year[25]. - Gross profit fell from RMB 738.5 million to RMB 687.4 million, representing a year-over-year decline of about 6.9%[25]. - The company's net profit for 2024 was RMB 222.0 million, a significant turnaround from a net loss of RMB 99.8 million in the previous year[25]. Business Development and Strategy - The company plans to establish 400 cubic meters of new production capacity between 2024 and 2025 to support the commercialization of new molecules, with two significant projects expected to launch in 2025 and 2026[12]. - The company aims to build an open cooperation platform for global biopharmaceutical innovators, enhancing collaboration between CRO and CDMO businesses[14]. - The company plans to enhance its drug development platform and production service platform, focusing on structural drug development (SBDD) to maximize shareholder value[14]. - The company has enhanced its AI capabilities across the drug discovery platform, transitioning from "AI-assisted" to "AI-driven" services[12]. - The company is focusing on integrating new technologies and expanding its capabilities to meet customer demands in drug development[48]. - The company aims to enhance the synergy between CRO and CDMO businesses, accelerating the funnel effect for backend business[50]. Research and Development - The CRO business delivered approximately 17,681 protein structures and identified 112 new independent drug targets, increasing the total customer base to 1,568[12]. - The investment incubation business saw an increase in research pipelines to 227, with 41 pipelines entering clinical stages, and a total of 93 startups incubated, resulting in nearly RMB 162.5 million in returns from partial exits[12]. - The company has identified over 2,098 independent drug targets, with 112 new targets delivered in 2024, enhancing its drug discovery capabilities[38]. - The introduction of AI technology in the SBDD process has accelerated the development of innovative drugs, significantly reducing the number of compounds synthesized[37]. - The company has developed a highly competitive early drug screening platform, with a DNA-encoded compound library covering over 100 billion compounds[42]. Operational Efficiency - The company has established comprehensive laboratory and production facilities in multiple locations, including Shanghai, Chengdu, and Suzhou, to support business growth and personnel expansion[12]. - The total available production capacity is currently 860 cubic meters, with plans to add 400 cubic meters between 2024 and 2025 to support new molecule commercialization[33]. - The CMC business has completed structural optimization, achieving nearly RMB 43.0 million in revenue, with 255 new drug projects completed or in progress[34]. - External business development (BD) accounted for approximately 74.0% of customer orders in the CMC segment, indicating strong external engagement[34]. Financial Position and Assets - Total assets decreased to RMB 7,050.6 million from RMB 7,449.9 million in the previous year[16]. - The total liabilities reduced to RMB 3,234.4 million from RMB 3,762.0 million in the previous year[16]. - The cash and cash equivalents at the end of the reporting period were RMB 941.6 million, down from RMB 1,036.3 million in the previous year[16]. - The debt-to-asset ratio was approximately 45.9% as of December 31, 2024, down from 50.5% as of December 31, 2023, with a significant reduction in bank borrowings[71]. - The group recorded impairment losses of approximately RMB 5.6 million during the reporting period, compared to RMB 8.1 million for the year ended December 31, 2023[64]. Corporate Governance and Management - The company has established a governance report for the fiscal year ending December 31, 2024, indicating a commitment to corporate governance practices[167]. - The company has a strong leadership team with extensive experience in the CRO industry, including over 28 years for the Chairman and CEO[140]. - The company has a strong board with diverse expertise in finance, technology, and pharmaceuticals, enhancing its strategic decision-making capabilities[151]. - The management team is committed to maintaining high standards of governance and transparency in its operations[151]. - The company has adopted an anti-corruption policy to prevent bribery and unethical business practices among its directors, executives, and employees[178]. Market and Competition - The group faced intensified competition in the pharmaceutical research and development services market, with competitors including various professional CRO/CMO institutions and large pharmaceutical companies[86]. - The company's business relies on the number and scale of service contracts for drug discovery from clients, including multinational pharmaceutical companies and biotech firms, which may decline if industry trends slow down or outsourcing ratios decrease[89]. - The company’s overseas revenue constitutes a significant portion of its main business, making it vulnerable to changes in foreign laws, political environments, and international relations, which could adversely affect service demand[93]. Shareholder and Investor Relations - The company has maintained the required public float as per listing rules as of the report date[114]. - The company has established multiple equity incentive plans that will remain in effect until December 31, 2024[117]. - No final dividend is proposed for the year ending December 31, 2024, and no interim dividend is planned for the six months ending June 30, 2024[118]. - The company has repurchased a total of 28,604,500 shares at a total cost of approximately HKD 25.1 million during the reporting period[126]. - The share repurchase was conducted as the board believed the share price did not reflect its intrinsic value, aiming to enhance shareholder returns[126].

Investment Rating - The report initiates coverage on Viva Biotech (1873.HK) with a "Buy" rating and a target price of HKD 3.5, indicating a potential upside of 133% from the current price of HKD 1.5 [1]. Core Insights - Viva Biotech is positioned as a leader in the structure-based drug discovery (SBDD) market and is expanding into the Contract Development and Manufacturing Organization (CDMO) sector, creating a comprehensive research and production platform [1][8]. - The company has established itself as a global leader in SBDD, leveraging advanced technologies and AI to enhance drug design and development efficiency [8][12]. - The integration of AI into the research and production processes is expected to significantly accelerate the discovery of new drug targets and mechanisms, creating additional market opportunities [1][12]. - The company has successfully attracted strategic investors, which enhances its valuation potential and operational capabilities [1][17]. Summary by Sections Section 1: Global Leader in Structure-Based Drug Discovery - Viva Biotech is a leading provider of SBDD services, offering a one-stop solution from early-stage drug development to commercial production [8]. - The company utilizes advanced technologies such as X-ray crystallography, Cryo-EM, and DNA-encoded library technology to support its drug discovery services [8][9]. Section 2: Focus on SBDD and CDMO - The acquisition of Langhua Pharmaceutical in 2020 allowed Viva Biotech to enter the CDMO market, providing a full-service platform from clinical development to commercial production [9][59]. - The CDMO sector is experiencing significant growth, with projections indicating a market size of USD 231 billion by 2030, with China’s share increasing to 23.9% [59][60]. Section 3: AI Empowerment Across the Value Chain - The company is enhancing its capabilities by integrating AI into its drug discovery processes, which is expected to lead to faster and more efficient drug development [12][28]. - Viva Biotech has developed a proprietary AI drug design platform that will cover all aspects of preclinical drug research [12]. Section 4: Strategic Investments and Valuation - The introduction of strategic investors such as Temasek and Honghui Fund has provided significant capital, enhancing the company's operational and governance structure [17]. - The current valuation of the company is considered low compared to historical levels, indicating substantial room for valuation recovery [1][17]. Section 5: Profit Forecast and Valuation - The company’s revenue is projected to grow from RMB 2,156 million in 2023 to RMB 3,355 million by 2028, with a compound annual growth rate (CAGR) of approximately 14% [2]. - Net profit is expected to increase significantly, from a loss of RMB 100 million in 2023 to RMB 471 million by 2028, reflecting a strong turnaround [2].

Investment Rating - The report initiates coverage on Viva Biotech (1873.HK) with a "Buy" rating and a target price of HKD 3.5, indicating a potential upside of 133% from the current price of HKD 1.5 [1]. Core Insights - Viva Biotech is positioned as a leader in the structure-based drug discovery (SBDD) market and is expanding into the Contract Development and Manufacturing Organization (CDMO) sector, creating a comprehensive R&D and production platform [8][9]. - The company has integrated AI technology into its operations, enhancing its drug discovery capabilities and creating new market opportunities [12][59]. - The introduction of strategic investors has significantly improved the company's valuation, with a notable focus on its low valuation compared to historical levels [17][18]. Summary by Sections Company Overview - Viva Biotech, founded in 2008 and listed in 2019, specializes in SBDD and offers a range of advanced technologies for drug discovery [8]. - The company has established a strong position in the CRO market, serving over 1,568 clients, including major pharmaceutical companies [28]. Business Strategy - The acquisition of Langhua Pharmaceutical in 2020 marked Viva's entry into the CDMO sector, allowing it to provide end-to-end services from drug development to commercialization [9][59]. - The company plans to expand its production capacity by 400 cubic meters between 2024 and 2025 to support new drug commercialization [9]. Financial Projections - Revenue is projected to grow from RMB 1,987 million in 2024 to RMB 3,355 million by 2028, with a compound annual growth rate (CAGR) of approximately 14% [2]. - Net profit is expected to increase significantly, from a loss of RMB 100 million in 2023 to RMB 471 million by 2028, reflecting a strong recovery trajectory [2]. Market Position - The global CRO market is anticipated to reach USD 147.7 billion by 2030, with a CAGR of 8.7%, while the CDMO market is projected to grow to USD 231 billion, highlighting significant growth opportunities for Viva Biotech [22][59]. - The report emphasizes the company's unique "service + investment" model, which combines immediate cash flow from CRO services with long-term gains from investments in biotech startups [9]. Competitive Landscape - Viva Biotech's valuation metrics, such as a 24 PE ratio for its CRO business, indicate a favorable investment opportunity compared to peers [3]. - The company has a competitive edge through its advanced technology platforms and a strong focus on AI-driven drug discovery, setting it apart from competitors in the industry [12][59].

Investment Rating - The report maintains a "Strong Buy" investment rating for the company [3]. Core Insights - The company has successfully turned a profit in 2024, achieving a net profit of 220 million yuan, compared to a loss in the previous year, with an adjusted net profit of 310 million yuan, reflecting a year-on-year increase of 50.6% [1][7]. - The company's revenue for 2024 was 1.99 billion yuan, a decrease of 7.8% year-on-year, but the second half of 2024 showed signs of recovery with a revenue of 1.01 billion yuan, only down 0.8% year-on-year [1][7]. - The CRO (Contract Research Organization) business is showing recovery with a revenue of 810 million yuan in 2024, down 4.0% year-on-year, but the second half of 2024 saw a revenue increase of 5.8% year-on-year [7]. - The CDMO (Contract Development and Manufacturing Organization) business reported a revenue of 1.18 billion yuan in 2024, down 10.3% year-on-year, with two significant projects nearing commercialization [7]. - The investment incubation business is entering a harvest phase, with 93 startups incubated and 15 having achieved full or partial exits by the end of 2024 [7]. - The company is transitioning its drug discovery platform from "AI-assisted" to "AI-driven," with 157 projects involving AI and over 10 million USD in revenue from AI-enabled projects [7]. - Revenue projections for 2025-2027 are estimated at 2.28 billion, 2.63 billion, and 3.10 billion yuan, with adjusted net profits of 350 million, 400 million, and 480 million yuan respectively [7]. Financial Data Summary - Total revenue for 2023 was 2.159 billion yuan, with a projected increase to 2.278 billion yuan in 2025, reflecting a year-on-year growth of 15% [2][9]. - Adjusted net profit is expected to grow from 315 million yuan in 2024 to 477 million yuan in 2027, with corresponding PE ratios decreasing from 11.2 to 7.4 [2][10]. - The company’s total assets are projected to increase from 7.051 billion yuan in 2024 to 8.336 billion yuan in 2027 [8].

Financial Performance - For the fiscal year ending December 31, 2024, the company's revenue decreased to RMB 1,986.7 million, down 7.8% from RMB 2,155.6 million in 2023[3]. - Gross profit for the same period was RMB 687.4 million, a decline of 6.9% compared to RMB 738.5 million in the previous year, with a gross margin of 34.6%[3][11]. - The net profit for 2024 was RMB 222.0 million, a significant turnaround from a net loss of RMB 99.8 million in 2023[3][11]. - Adjusted net profit under non-IFRS was RMB 314.6 million, representing a 50.6% increase from RMB 208.8 million in the prior year[3][11]. - The revenue of Langhua Pharmaceutical in 2024 totaled RMB 1,175.7 million, a decrease of about 10.3% year-on-year, primarily due to upgrades in the raw material drug workshop and delays in some CDMO orders[19]. - The company reported a pre-tax profit of RMB 295,705,000 for the year ended December 31, 2024, compared to a pre-tax loss of RMB 55,953,000 in 2023[124]. - The company reported a net foreign exchange loss of RMB 16,179,000 in 2024, compared to a gain of RMB 51,014,000 in 2023[1]. - The company reported a total of RMB 2,061,559,000 in customer contract revenue for the year ending December 31, 2023, with a significant contribution from CDMO and commercialization services[133]. Client and Market Growth - The number of service clients increased to 2,465 during the reporting period[11]. - The number of CRO clients increased to 1,568, with the top ten clients contributing 24.4% of revenue, while overseas revenue accounted for about 87.3% of total revenue, showing a year-on-year decline of approximately 3.9%[16]. - Revenue from external customers in the United States decreased to RMB 795,831,000 in 2024 from RMB 812,789,000 in 2023, reflecting a decline of 2.4%[126]. - The company experienced a significant drop in revenue from mainland China, which fell to RMB 267,227,000 in 2024 from RMB 323,671,000 in 2023, a decline of 17.5%[126]. - The company is expanding its market presence in Southeast Asia, targeting a 10% market share within the next two years[188]. Operational Efficiency and Strategic Initiatives - The operational efficiency improvements contributed to an increase in operating profit margins during the year[11]. - The management team is focused on leveraging strategic partnerships to enhance governance, operations, and investment strategies[12]. - The company aims to enhance the synergy between CRO and CDMO businesses to accelerate project funnel effects and build an open collaboration platform for global biopharmaceutical innovators[43]. - The company is focusing on integrating new technologies and expanding its service offerings to meet customer demands and drive continuous growth in CRO revenue[39]. - The company has established a Boston subsidiary to strengthen its global presence and enhance international cooperation networks[15]. Research and Development - The company delivered over 82,716 protein structures cumulatively by the end of 2024, with approximately 17,681 new deliveries in the year, maintaining its leading position in the protein structure analysis field[15]. - The company has identified over 2,098 independent drug targets, with 112 new targets delivered in the reporting period[27]. - The company has developed proprietary technology for membrane protein expression, enabling successful preparation of challenging membrane protein targets[30]. - The company has successfully developed a highly competitive early drug screening platform, V-DEL, which includes a DNA-encoded compound library with over 100 billion compounds[32]. - The R&D budget has been increased by 18% to support the development of new therapies and enhance pipeline diversity[188]. Financial Stability and Investments - As of December 31, 2024, total cash and cash equivalents amounted to RMB 941.6 million, a decrease of 9.1% from RMB 1,036.3 million as of December 31, 2023, primarily due to net repayment of bank loans[65]. - The debt-to-asset ratio was approximately 45.9% as of December 31, 2024, down from 50.5% as of December 31, 2023, indicating improved financial stability[66]. - The company has successfully exited from several incubated companies, realizing investment returns of nearly RMB 162.5 million, with a total of 93 startups incubated[23]. - The company has secured bank loans for the acquisition of a 20% stake in Langhua Pharmaceutical, using 100% equity of Langhua Pharmaceutical as collateral[183]. Corporate Governance - The company is committed to high standards of corporate governance to protect shareholder interests and enhance corporate value[89]. - The audit committee has reviewed the financial statements for the year ending December 31, 2024, confirming compliance with applicable accounting principles[94]. - Ernst & Young has verified the financial figures for the year ending December 31, 2024, ensuring consistency with the audited financial statements[95]. - The board has announced changes to the nomination committee, with new appointments aimed at improving corporate governance[99]. Future Outlook - The company expects growth in the CRO industry to benefit from a recovery in global investment and financing trends[10]. - The company anticipates a revenue guidance of $320 million for the next fiscal year, indicating a projected growth of 14%[188]. - New product launches are expected to contribute an additional $50 million in revenue, with a focus on innovative drug delivery systems[188].

Core Viewpoint - Viatris Bio (01873.HK) has reported a significant turnaround in its financial performance for 2024, leading to a strong increase in stock price, with a year-to-date gain of 97.67% [1][2]. Financial Performance - The company expects to achieve profitability in 2024, projecting a net profit between 210 million RMB and 240 million RMB, with shareholder net profit ranging from 150 million RMB to 180 million RMB [3]. - In contrast, the company reported a net loss of 99.8 million RMB and a shareholder net loss of 116.1 million RMB for 2023 [4]. Business Growth Drivers - The growth is attributed to the recovery of the CRO business in the second half of the year, improved operational efficiency, and investment income from milestone payments [5]. - Viatris Bio operates as an investment holding company, providing structure-based drug discovery services to global biotech and pharmaceutical clients, primarily in the US, China, Europe, and other regions [5]. Technological Advancements - The company showcased advanced technology platforms at the BPI WEEK 2025, particularly in antibody drug development and XDC conjugate drug research, which garnered significant attention [5]. - Viatris Bio offers a comprehensive service in antibody drug development, from target antigen preparation to candidate functional antibody construction and expression [5][6]. AI Integration - The company has made significant strides in AI, deploying the DeepSeek-R1 model to enhance intelligent workflows [9]. - Viatris Bio has established an AIDD/CADD platform for drug development, which has evolved into a full-cycle AI-enabled system, accelerating the drug development process [10][12]. Strategic Partnerships and Market Position - The company has successfully cleared its convertible bond repayment pressure after attracting strategic investors like Temasek and Honghui in 2023, positioning itself for a strong 2024 [12]. - According to research from China Merchants Securities, the company's CRO business is well-positioned to benefit from industry recovery, with a steady restoration of CRO orders and ongoing progress in the Langhua Pharmaceutical service project [13].

Investment Rating - The report assigns a "Buy" rating to the company with a current price of 1.50 HKD and a fair value of 2.41 HKD [2]. Core Views - The company is expected to experience a turning point in operations, driven by its comprehensive AIDD technology platform and strategic investments aimed at resolving debt issues [7]. - The company's revenue is projected to recover, with estimates of 2,053 million RMB in 2024, 2,393 million RMB in 2025, and 2,823 million RMB in 2026, reflecting growth rates of -4.8%, 16.6%, and 17.9% respectively [7]. - The introduction of strategic investors has improved governance and operational efficiency, facilitating a restructuring of the company's business model [7]. Summary by Sections 1. Strategic Investment and AIDD Technology Platform - The company has introduced strategic investors to alleviate debt crises and enhance governance, leading to improved operational synergy [7][30]. - The transition from SBDD/FBDD/ASMS platforms to a full-process AIDD technology platform has been established, integrating AI to enhance drug discovery capabilities [7][34]. 2. Industry Recovery and Project Advancement - The CRO business is gradually recovering due to cost reduction and efficiency improvements, with new orders expected to support future revenue growth [7][60]. - The company has expanded its client base to over 2,350, indicating a strong market presence and diversified revenue streams [7][56]. 3. Financial Projections and Investment Recommendations - The company is projected to achieve adjusted net profits of 257 million RMB in 2024, 323 million RMB in 2025, and 395 million RMB in 2026, with corresponding EPS of 0.12, 0.15, and 0.18 RMB per share [7]. - A PE valuation method suggests a target valuation of 2.41 HKD per share based on a 15X PE multiple for 2025 [7].

Investment Rating - The report initiates coverage with a "Strong Buy" rating for the company [1][53]. Core Insights - The company has successfully cleared its convertible bonds and is positioned for growth in 2024, leveraging its CRO and CDMO businesses to capitalize on the recovering industry [1][53]. - The CRO business is a leader in protein analysis, with a global market share of approximately 70%, and has begun to see a recovery in new orders since Q2 2024 [8][24]. - The CDMO segment, through the acquisition of Langhua Pharmaceutical, has strengthened its production capabilities and is experiencing improved operational efficiency [37][41]. - The investment incubation arm, VBI, has invested in 93 biotech startups, with several projects nearing clinical stages, indicating a potential for future returns [43][49]. Financial Data and Valuation - Total revenue is projected to decline from 2,382 million in 2022 to 1,966 million in 2024, before recovering to 2,597 million by 2026, with a CAGR of 15% from 2024 to 2026 [3][54]. - Adjusted net profit is expected to grow from 209 million in 2023 to 408 million by 2026, reflecting a strong recovery trajectory [3][54]. - The company’s PE ratio is projected to decrease from 15.5 in 2023 to 7.9 by 2026, indicating increasing valuation attractiveness [3][54]. Business Segments CRO Business - The CRO segment focuses on first-in-class drug development and has seen a 15% decline in revenue in the first half of 2024, primarily due to a cooling global investment environment [20][24]. - The company has established a unique AI-enabled SBDD platform, enhancing its drug discovery capabilities [31][32]. CDMO Business - The CDMO segment, through Langhua Pharmaceutical, has a solid customer base with a revenue contribution of approximately 57% from CDMO services in the first half of 2024 [37][41]. - The company is expanding its production capacity, with new facilities expected to be operational by Q4 2025 [41][42]. Investment Incubation - VBI has a diverse portfolio of 200+ drug pipelines, with several projects in advanced clinical stages, indicating a robust pipeline for future growth [43][49]. - The investment strategy has already yielded returns, with approximately 144 million in cash inflows from successful exits in the first half of 2024 [43][49].

Investment Rating - The report assigns a "Buy" rating to the company with a current price of HKD 1.50 and a fair value of HKD 2.41 [2]. Core Views - The company has a comprehensive AIDD technology platform that enhances its operational efficiency and competitive edge, with a significant recovery in its CRO business expected due to cost reduction and industry recovery [7]. - The introduction of strategic investors has helped the company address its debt crisis and improve governance and management [7]. - The company's revenue is projected to grow significantly, with expected main revenues of RMB 2,053 million in 2024, RMB 2,393 million in 2025, and RMB 2,823 million in 2026 [7]. Summary by Sections 1. Strategic Investment and AIDD Technology Platform - The company has introduced strategic investors to alleviate its debt crisis and has restructured its operations to enhance efficiency [7][30]. - The transition from SBDD/FBDD/ASMS platforms to a full-process AIDD technology platform has been pivotal, leveraging AI to improve drug discovery processes [7][34]. 2. Industry Recovery and Project Advancement - The CRO business is gradually recovering, with new orders increasing post-2024 Q2, supported by AI applications and cost efficiency measures [7][60]. - The company has expanded its client base to over 2,350, indicating a robust demand for its services [7][56]. 3. Financial Projections and Investment Recommendations - The company is expected to see a turnaround in profitability, with adjusted net profits projected to reach RMB 257 million in 2024 and RMB 323 million in 2025 [7]. - The report anticipates a PE ratio of 15x for 2025, leading to a fair value estimate of HKD 2.41 per share [7].