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].

Financial Performance - In the first half of 2024, the company served a total of 2,350 clients, with revenue decreasing from RMB 1,142.2 million to RMB 981.8 million, a decline of approximately 14.0% year-on-year[5] - Gross profit fell from RMB 406.0 million to RMB 339.1 million, representing a decrease of about 16.5% compared to the same period last year[5] - The net profit for the first half of 2024 was RMB 144.2 million, significantly up from RMB 13.7 million in the same period last year, primarily due to the elimination of related financial adjustments from the full repayment of convertible bonds[5] - Adjusted net profit under non-IFRS increased from RMB 146.1 million to RMB 168.2 million, a growth of nearly 15.1% year-on-year, attributed to successful exits from incubated investments and cost reduction measures[5] - The company's revenue for the reporting period was approximately RMB 981.8 million, a decrease of about 14.0% compared to RMB 1,142.2 million in the same period last year[20] - The total revenue of Langhua Pharmaceutical for the first half of 2024 was RMB 595.9 million, a decrease of about 15.0% year-on-year[9] - The company reported a total comprehensive income of RMB 149.191 million, compared to RMB 37.418 million in the same period last year, reflecting a growth of 298.5%[97] Revenue Breakdown - The company's CRO business revenue decreased from RMB 441.3 million to RMB 385.9 million, a decline of approximately 12.5% year-on-year[6] - Revenue from overseas clients accounts for approximately 88.8%, with a year-on-year decline of about 10.2%, while revenue from mainland China clients has decreased by approximately 27.6%[7] - Revenue from drug discovery services was RMB 309.0 million for FTE and RMB 73.6 million for FFS, showing a decline from the previous year's figures[21] - The revenue from CDMO and commercialization services was RMB 577.2 million, down from RMB 700.9 million in the previous year[20] - Revenue from the drug discovery services segment was RMB 375,632 thousand, while the CDMO and commercialization services segment generated RMB 595,889 thousand, contributing significantly to the overall revenue[121] Client and Market Information - The total number of CRO clients has increased to 1,465, with the top ten clients contributing 25.7% of revenue[7] - The cumulative number of clients served by Langhua Pharmaceutical reached 885, with the top ten clients accounting for 63.2% of revenue[9] - The company has delivered over 74,109 protein structures, with approximately 9,074 new deliveries in the first half of 2024[6] - The company has cumulatively researched over 2,065 independent drug targets, with 79 new targets delivered in the first half of 2024[6] Cost Management and Expenses - The sales cost for the reporting period was approximately RMB 642.7 million, down about 12.7% from RMB 736.2 million in the previous year, consistent with the revenue decline[23] - Administrative expenses were approximately RMB 117.2 million, down about 10.8% from RMB 131.4 million in the same period last year, mainly due to workforce optimization and effective cost control measures[27] - Research and development expenses were approximately RMB 42.8 million, a decrease of about 44.2% from RMB 76.7 million in the same period last year, reflecting the effectiveness of cost control measures[28] Strategic Initiatives - The company plans to enhance online digital marketing and expand its overseas business development team to drive order recovery and growth[6] - Strategic investors are currently contributing to the company's governance, business operations, investment planning, and strategic development following their introduction in 2023[5] - The company has introduced AI technology to enhance its SBDD platform, developing a unique AI-enabled one-stop original drug research and development service platform[12] Shareholder and Governance Information - The board does not recommend an interim dividend for the six months ending June 30, 2024, compared to zero for the same period ending June 30, 2023[41] - The company has adopted the corporate governance code and confirmed compliance with its provisions during the reporting period[46] - The audit committee has reviewed the unaudited interim financial information for the reporting period, confirming compliance with International Accounting Standard 34[50] Financial Position and Assets - As of June 30, 2024, the group had cash and cash equivalents totaling approximately RMB 1,035.8 million, a slight decrease of about 0.05% from RMB 1,036.3 million as of December 31, 2023[35] - The total number of employees as of June 30, 2024, was 2,043, with 1,117 in CRO R&D roles[18] - The company has maintained a 100% retention rate for its top ten clients in the CMC business[10] Future Outlook - The company plans to build an additional 400 cubic meters of production capacity between 2024 and 2025 to support the commercialization of new molecules[9] - The company aims to enhance its one-stop innovative drug development platform and production service platform, focusing on the synergy between CRO and CDMO businesses[20] - The company is leveraging its AI-enabled SBDD platform to drive continuous growth in CRO revenue[17] Taxation and Compliance - The estimated corporate income tax rate for Langhua Pharmaceutical is 15% for the six-month period ending June 30, 2024, due to its qualification as a "High-tech Enterprise"[134] - The corporate income tax rate for subsidiaries in the United States is 21% at the federal level, plus an additional 8.84% state tax in California[137] Share Options and Incentives - The company has established share incentive plans to attract and retain top talent[61] - The stock option plan aims to incentivize eligible participants to enhance the company's value and align with shareholder interests[65] - The company has a total of 3,665,141 stock options granted, which are set to vest over a five-year period[64]

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 981.8 million, a decrease of approximately 14.0% compared to RMB 1,142.2 million in the same period last year[1]. - Gross profit decreased to RMB 339.1 million with a gross margin of 34.5%, down from RMB 406.0 million and a gross margin of 35.5% in the previous year[1]. - Net profit for the period was RMB 144.2 million, significantly up from RMB 13.7 million in the same period last year[1]. - Adjusted net profit under non-IFRS was RMB 168.2 million, an increase of approximately 15.1% from RMB 146.1 million year-on-year[1]. - The group's revenue for the reporting period was approximately RMB 981.8 million, a decrease of about 14.0% compared to RMB 1,142.2 million in the same period last year[24]. - The group recorded a net foreign exchange loss of RMB 10,060,000 for the six months ended June 30, 2024, compared to a gain of RMB 40,047,000 in 2023[78]. - The group reported a pre-tax profit of RMB 185,516,000 for the six months ended June 30, 2024, compared to RMB 36,752,000 for the same period in 2023, representing a significant increase[56]. Client and Market Development - The number of cumulative clients served increased to 2,350 during the reporting period[6]. - The number of CRO clients increased to 1,465, with the top ten clients contributing 25.7% of revenue, while overseas revenue accounted for about 88.8%[8]. - Revenue from clients in the United States decreased to RMB 375.7 million from RMB 476.1 million, while revenue from Europe increased to RMB 337.1 million from RMB 300.5 million[25]. - The company aims to enhance its drug development platform and production service platform, focusing on building an open collaboration platform for global biopharmaceutical innovators[23]. - The company plans to continue expanding its market presence and investing in new product development to drive future growth[70]. Operational Efficiency and Cost Management - Research and development expenses were approximately RMB 42.8 million, a significant decrease of about 44.2% from RMB 76.7 million in the previous year, reflecting effective cost control measures[33]. - Financial costs were approximately RMB 31.4 million, a decrease of about 64.3% from RMB 88.0 million in the previous year, primarily due to the repayment of convertible bonds[39]. - Other expenses decreased significantly by about 85.4% to RMB 8.7 million from RMB 59.5 million in the previous year, mainly due to recorded foreign exchange gains[38]. - The company has implemented several internal reorganizations to streamline operations and improve clarity in business segments[66]. Technology and Innovation - The company has established a one-stop platform for new mechanism drug discovery, integrating various technologies including protein production, cryo-electron microscopy, and drug screening[14]. - The introduction of AI technology into the SBDD platform has significantly accelerated the efficiency of innovative drug development[13]. - The company has developed a highly competitive early drug screening platform, utilizing a DNA-encoded compound library covering over 100 billion compounds[16]. - The company has established proprietary technologies for membrane protein expression and packaging, enabling successful preparation of challenging membrane protein targets[15]. - The integration of modern drug screening and validation technologies has significantly enhanced project innovation and success rates[16]. Financial Position and Liabilities - The group's total cash and cash equivalents amounted to approximately RMB 1,035.8 million as of June 30, 2024, a slight decrease of about 0.05% from RMB 1,036.3 million on December 31, 2023[42]. - The group's total liabilities to total assets ratio improved to approximately 47.1% as of June 30, 2024, down from 50.5% on December 31, 2023[43]. - The company’s interest-bearing bank borrowings decreased to RMB 1,511,272 thousand from RMB 1,871,524 thousand, a decrease of 19.2%[52]. - The company has secured bank loans of RMB 312,500,000 with collateral for the acquisition of a 20% stake in Langhua Pharmaceutical[107]. - The company’s total liabilities decreased by 19.2% from the previous reporting period, indicating improved financial management and reduced debt levels[106]. Corporate Governance and Employee Relations - The company has adopted corporate governance practices in line with the listing rules, ensuring a clear division of responsibilities between the chairman and the CEO[116]. - The company maintains stable employee relations without significant labor disputes affecting business activities[22]. - The board includes executive and non-executive directors, ensuring diverse governance[121]. - The board expressed gratitude to all employees for their efforts and dedication[120]. Capital Expenditures and Investments - Capital expenditures during the reporting period were approximately RMB 82.7 million, up from RMB 60.3 million in the same period last year, indicating an increase of about 37.9%[45]. - The company completed a capital increase of RMB 30,016,000, resulting in a slight dilution of ownership from approximately 73.46% to 72.91%[54]. - The company has pledged assets valued at approximately RMB 204,639,000 and RMB 193,074,000 as collateral for its bank loans[107]. Shareholder Information - The company did not declare or propose any dividends for the six months ended June 30, 2024, consistent with the previous year[91]. - The weighted average number of ordinary shares in issue increased to 2,141,766,000 for the six months ended June 30, 2024, from 1,915,437,000 in the same period of 2023[90].

Financial Performance - In 2023, the company achieved a revenue of RMB 2,155.6 million and a gross profit of RMB 738.5 million, with a net loss of RMB 99.8 million, significantly improved from a loss of RMB 504.2 million in the previous year[14]. - The adjusted net profit for the year was RMB 208.8 million, a significant turnaround from the previous year's losses, attributed to stabilization in the valuation of incubated companies and cost reduction measures[14]. - The group's revenue for the reporting period was approximately RMB 2,155.6 million, a decrease of 9.4% compared to RMB 2,379.6 million for the year ended December 31, 2022[66]. - The cost of sales for the reporting period was approximately RMB 1,417.1 million, down 9.4% from RMB 1,564.0 million for the year ended December 31, 2022[72]. - Gross profit for the reporting period was approximately RMB 738.5 million, a decrease of 9.5% compared to RMB 815.7 million for the year ended December 31, 2022, with a gross margin of 34.3%[73]. - The net loss for the reporting period was approximately RMB 99.8 million, a significant improvement from a net loss of approximately RMB 504.2 million for the year ended December 31, 2022[138]. - The adjusted net profit for the reporting period was approximately RMB 208.8 million, compared to an adjusted net loss of approximately RMB 133.9 million for the year ended December 31, 2022[138]. - As of December 31, 2023, the total cash and cash equivalents amounted to approximately RMB 1,036.3 million, an increase of 52.7% from approximately RMB 678.6 million as of December 31, 2022[139]. Business Development and Strategy - The company successfully raised approximately USD 225 million through strategic investors including Temasek, Honghui, Danming, and Dubai Investment Company[3]. - The company aims to continuously enhance its innovative technology platforms to support global drug research and production[18]. - The company has initiated 183 new drug projects, with one pipeline entering Phase III clinical trials, demonstrating the success of its integrated strategy[17]. - The company plans to enhance its one-stop drug development and production service platform, strengthening the synergy between CRO and CDMO businesses[51]. - The company has established a new drug incubation center in Hangzhou with a construction area of approximately 77,500 square meters, transitioning from wholly-owned to a 30% stake in collaboration with local state-owned enterprises[46]. - The company aims to build an open cooperation platform for global biopharmaceutical innovators, enhancing its collaborative ecosystem[51]. Research and Development - The CRO business has established multiple core technology platforms, including PROTAC, molecular glue technology, and artificial intelligence drug design, enhancing the drug development platform[16]. - The company has established multiple core technology platforms, including PROTAC, molecular glue technology, and AI-driven drug design platforms, enhancing its R&D capabilities[36]. - The newly developed V-DEL technology platform has created a novel library strategy and innovative DNA-compatible reactions, significantly advancing the company's drug discovery efforts[36]. - The peptide technology platform is now capable of synthesizing various complex peptides, focusing on challenging synthesis techniques, which will provide comprehensive services to clients[37]. - The CADD and AIDD platforms utilize advanced algorithms and supercomputing resources, facilitating progress in drug development across various drug forms[40]. - The Cryo-EM technology allows for structural analysis of complex biomolecules at near-atomic resolution, expediting drug discovery processes[41]. - The company has expanded its antibody and small molecule drug development experience into a one-stop conjugate drug R&D platform, enhancing service efficiency[39]. - The total number of research pipelines in development reached nearly 222, with 185 in preclinical stages and 37 in clinical stages[83]. Governance and Compliance - The board of directors consists of three executive directors, two non-executive directors, and three independent non-executive directors, ensuring a balanced governance structure[33]. - The company has adopted a whistleblowing policy to encourage reporting of any misconduct, ensuring confidentiality and protection for whistleblowers[28]. - The company aims to separate the roles of Chairman and CEO in the long term, although currently, both roles are held by the same individual, which the board believes provides strong leadership[29]. - The board currently consists of eight directors, including three executive directors, two non-executive directors, and three independent non-executive directors, with a goal to maintain gender diversity[88]. - The company aims to ensure gender diversity in its workforce, with a gender ratio of 0.54:0.46 as of December 31, 2023[89]. - The board of directors proposed to distribute up to 40% of the distributable profits for the fiscal year ended December 31, 2023, subject to sufficient operating funds and shareholder approval[120]. - The board of directors has held two shareholder meetings in the fiscal year ending December 31, 2023, with full attendance from key directors[172]. - The company has a policy allowing shareholders to request special meetings, provided they hold at least 10% of the paid-up capital[175]. Risk Management - The company faces intensified competition in the pharmaceutical research and development services market, with significant risks from both established competitors and new market entrants[158]. - The company faces risks related to the loss of core technical personnel and executives, which are crucial for maintaining its competitive advantage and operational stability[161]. - There is a risk of declining demand in the pharmaceutical research and development service market, which could negatively impact the company's business if industry growth slows or outsourcing ratios decrease[162]. - Currency exchange rate risks are present, as the majority of service costs are denominated in RMB, and significant appreciation of RMB could pressure profits[163]. - The company has invested in incubating startups focused on new drug development, but the high failure rate of such companies poses a risk to achieving expected returns[165]. - The company has established risk management processes to identify, assess, and manage significant risks, with senior management responsible for the risk reporting process[169]. Financial Position - The group's total liabilities to total assets ratio was approximately 50.5% as of December 31, 2023, down from 54.5% a year earlier[78]. - The group had secured bank loans of approximately RMB 1,532.0 million and unsecured bank loans of RMB 339.5 million, an increase of approximately RMB 585.2 million from RMB 1,286.3 million as of December 31, 2022[78]. - The company recorded goodwill of approximately RMB 2,156.4 million as of December 31, 2023, unchanged from the previous year[134]. - The company faced foreign exchange losses of approximately RMB 51.0 million and RMB 146.4 million for the reporting period and the year ended December 31, 2022, respectively[132]. - The company has no significant contingent liabilities as of December 31, 2023[131]. - The company has pledged assets valued at approximately RMB 207.1 million, RMB 115.5 million, RMB 196.0 million, RMB 7.1 million, and RMB 161.7 million as collateral for bank loans and other financial obligations[99]. Employee Relations - The total number of employees as of December 31, 2023, is 2,077, with 1,155 in CRO R&D roles[45]. - The company has maintained stable employee relations without significant labor disputes affecting business activities[45]. - The company emphasizes the importance of continuous professional development for all directors to ensure they contribute effectively to the board[147]. - Regular training is provided to employees as part of the company's internal control measures, ensuring they are updated on relevant laws and policies[168].

Financial Performance - In 2023, the company's revenue decreased to RMB 2,155.6 million, down 9.4% from RMB 2,379.6 million in 2022[44]. - Gross profit for 2023 was RMB 738.5 million, representing a decline of 9.5% compared to RMB 815.7 million in 2022[44]. - The adjusted net profit for 2023 was RMB 208.8 million, a significant improvement from a loss of RMB 133.9 million in 2022[44]. - The company reported a loss attributable to equity holders of the parent of RMB 290,436 thousand in 2023, compared to a loss of RMB 528,475 thousand in 2022, showing an improvement of 45.0%[26]. - The net loss for the group in 2023 was RMB 99.8 million, significantly improved from a loss of RMB 504.2 million in the same period last year[62]. - The company reported a basic loss per share of RMB 0.000025, based on a weighted average of 1,940,474,000 shares outstanding for the year[13]. - The company reported a basic loss per share of RMB (0.06) for 2023, improving from RMB (0.28) in 2022[44]. Assets and Liabilities - The total assets as of the end of 2023 were RMB 2,028,679,000, up from RMB 1,915,437,000 in 2022, reflecting a growth of approximately 5.9%[9]. - The total bank loans and overdrafts amounted to RMB 1,871,524 thousand in 2023, compared to RMB 1,286,251 thousand in 2022, marking an increase of 45.5%[39]. - As of December 31, 2023, the debt-to-asset ratio was approximately 50.5%, down from 54.5% as of December 31, 2022[142]. - The company has not utilized any of its bank credit facilities amounting to RMB 1,544.9 million as of December 31, 2023[161]. Credit Risk and Receivables - The expected credit loss rate for trade receivables over 12 months was 68.26% in 2023, compared to 23.96% in 2022, indicating a significant increase in credit risk[10]. - The expected credit loss for trade receivables was RMB 20,813,000 as of December 31, 2023, compared to RMB 15,124,000 in the previous year, showing an increase of 37.5%[10]. - The provision for impairment losses on trade receivables increased to RMB 20,813 thousand in 2023 from RMB 15,124 thousand in 2022, reflecting a rise of 37.5%[31]. - The company maintains a strict control over its outstanding receivables, with a credit control department in place to minimize credit risk[30]. Cash Flow and Financing - Cash and cash equivalents increased to RMB 1,036,322 thousand in 2023 from RMB 678,569 thousand in 2022, representing a growth of 52.8%[16]. - The company successfully raised nearly USD 225 million in financing from strategic investors including Temasek and Dubai Investment Company[49]. - The company redeemed convertible bonds amounting to USD 250 million, with a total cost of USD 256.6 million during the reporting period[171]. - The company recorded other income and gains of approximately RMB 871 million, an increase of 28.8% compared to RMB 676 million in the same period last year, primarily due to increased government subsidies and bank interest income[113]. Operational Strategy and Market Presence - The company plans to expand its market presence and invest in new product development, although specific financial projections were not disclosed[6]. - The company emphasized the continuous expansion of CDMO capacity and the increase in CMC project numbers during the reporting period[54]. - The group aims to enhance its one-stop drug research and production service platform and deepen the synergy between CRO and CDMO businesses[128]. - The company plans to enhance its strategic cooperation with Langhua Pharmaceutical to optimize CDMO capacity and business structure[54]. Research and Development - Research and development expenses amounted to approximately RMB 128 million, a decrease of 5.7% from RMB 135.8 million in the previous year, attributed to ongoing cost reduction efforts and personnel optimization[114]. - The company has built multiple core technology platforms, including PROTAC/molecular glue technology, CADD, and AIDD, and has expanded its service offerings in antibody and large molecule R&D[97]. - The company has established the XDC platform, a one-stop drug development service that integrates experience in antibody, peptide, and small molecule drug development[75]. Corporate Governance - The company is committed to high standards of corporate governance to protect shareholder interests and enhance corporate value[199]. - The board has adopted the principles and code provisions of the corporate governance code as per listing rules to ensure proper oversight of business activities and decision-making processes[199]. - The company has complied with the corporate governance code provisions throughout the reporting period[200].

智通财经APP讯，维亚生物(01873)公布，公司建议采纳维亚上海第一期股权激励计划及维亚上海第二期股权激励计划，其将使维亚上海能够激励其僱员及董事。 董事会建议，待采纳各自的股权激励计划及取得维亚上海的股东批准后，向若干激励对象授出732万份第一期股票期权及732万份第二期股票期权。 ...

Financial Performance - The total number of customers served by the company increased to 2,189, with revenue rising from RMB 1,108.7 million to RMB 1,142.2 million, representing a growth of approximately 3.0% year-on-year[6]. - Gross profit increased from RMB 345.0 million to RMB 406.0 million, reflecting a year-on-year growth of about 17.7%[6]. - Adjusted net profit under non-IFRS increased from RMB 89.0 million to RMB 146.1 million, marking a significant increase of approximately 64.2% year-on-year, attributed to successful exits from incubated companies and positive contributions from CDMO product structure changes[6]. - The company's revenue for the reporting period was approximately RMB 1,142.2 million, an increase of about 3.0% compared to RMB 1,108.7 million in the same period last year[63]. - Gross profit for the reporting period was approximately RMB 406.0 million, representing an increase of about 17.7% from RMB 345.0 million in the previous year, with a gross margin of approximately 35.5%[68]. - The group recorded capital expenditures of approximately RMB 60.3 million during the reporting period, a decrease from RMB 128.9 million in the same period last year[107]. - The group faced a net foreign exchange loss of approximately RMB 40.0 million during the reporting period, compared to a net loss of approximately RMB 88.1 million in the same period last year[109]. - The group had a net current liability of RMB 982 million as of June 30, 2023[175]. Business Segments - CRO business revenue rose from RMB 406.0 million to RMB 441.3 million, with a growth rate of about 8.7% year-on-year, although growth has slowed compared to previous years due to global biopharmaceutical investment slowdowns[7]. - The CDMO segment reported a revenue of RMB 700.9 million in the first half of 2023, a slight decrease of approximately 0.3% year-on-year, while gross profit increased by about 25.3% to RMB 208.1 million[32]. - The CMC segment has completed and is advancing 143 new drug projects, with CMC revenue reaching nearly RMB 25 million, while the number of CMC R&D personnel reached 129 as of the reporting period[33]. - The company’s PROTAC drug development services accounted for nearly 12.3% of total CRO revenue, with over 50 E3 ligase structures researched and more than 110 target protein-PROTAC-E3 ligase ternary complex structures delivered as of June 30, 2023[20]. Customer and Market Insights - The proportion of revenue from overseas customers in the CRO business is approximately 86.5%, with a year-on-year growth of about 12.4%[17]. - The company's customer revenue analysis showed significant contributions from clients based in the United States, with revenue from this region increasing to RMB 476.1 million from RMB 383.4 million in the previous year[66]. - The company is actively building an open collaboration platform for global biopharmaceutical innovators, enhancing its CRO and CDMO business synergy[42]. Investment and Financing - The company has incubated 7 companies that have completed or are nearing completion of new financing rounds, with a total financing amount of approximately USD 156.0 million[18]. - The company successfully reached an investment agreement with strategic investors Temasek and Honghui Fund, aiming to raise nearly $210 million, which will help address convertible bond repayment issues and enhance governance and operational synergy[26]. - The net proceeds from the IPO were approximately RMB 1,217.1 million after deducting underwriting fees and expenses, with plans to adjust the use of funds according to business objectives[88]. - The group plans to utilize 70% of the net proceeds from the convertible bond offering for business development and expansion, amounting to approximately RMB 879.19 million[115]. Research and Development - R&D investment during the reporting period was RMB 76.7 million, an increase of 87.5% compared to RMB 40.9 million for the same period last year[57]. - Research and development expenses amounted to approximately RMB 76.7 million, an increase of about 87.5% compared to RMB 40.9 million in the same period last year, primarily due to increased investment in R&D and technology-driven platforms[73]. - The company has established multiple core technology platforms, including PROTAC technology and computer-aided drug design (CADD), enhancing its capabilities in drug discovery and development[57]. Employee and Talent Management - As of June 30, 2023, the total number of employees reached 2,271, with 1,341 in CRO R&D, reflecting the company's commitment to talent retention and training[39]. - The total employee cost for the group was RMB 336.3 million, which includes director remuneration[121]. - The group is focused on competitive compensation packages to retain employees, including salaries, discretionary bonuses, and employee stock ownership plans[121]. - The group is actively involved in training programs to enhance employee skills and knowledge[121]. Corporate Governance - The company has adopted corporate governance practices in line with the corporate governance code, enhancing management and shareholder interests[143]. - The company confirms that all directors complied with the standard code during the reporting period[145]. - The external auditor confirmed that the interim financial information was prepared in accordance with International Accounting Standard 34[129]. Future Plans and Strategies - The company plans to establish an investment fund to support its incubation business, aiming to reduce cash flow pressure and capital occupation at the group level[18]. - The company plans to expand its capacity by constructing an additional 400 cubic meters of production capacity between 2024 and 2025, with ongoing ground construction and equipment procurement[32]. - The group plans to actively control administrative costs and capital expenditures[178]. - The group aims to accelerate the collection of outstanding trade receivables and other receivables[178].