Financial Performance - The company reported total revenue of RMB 1,369.2 million for the year ending December 31, 2024, representing a 6.4% increase compared to RMB 1,287.4 million in 2023[4] - Net profit attributable to the company's owners was RMB 138.6 million, an increase of RMB 18.8 million from RMB 119.8 million in 2023[4] - The basic earnings per share increased to RMB 0.68 from RMB 0.60 in 2023[4] - In 2024, the company achieved a net profit of RMB 138.6 million, representing a year-on-year growth of 15.7%, with a gross margin of 79.00% (up 2.05%) and a net margin of 10.12% (up 0.82%) [10] - Sales revenue from products increased from RMB 1,218.5 million in 2023 to RMB 1,299.0 million in 2024, reflecting a growth of 6.6%[19] - Gross profit rose by 9.2% from RMB 990.7 million in 2023 to RMB 1,081.7 million in 2024, with a gross margin increase from 77.0% to 79.0%[22] - Other income and gains increased by 171.4% from RMB 6.9 million in 2023 to RMB 18.7 million in 2024, primarily due to an increase in government subsidies[24] - Administrative expenses increased from RMB 59.9 million for the year ended December 31, 2023, to RMB 88.4 million for the year ended December 31, 2024, primarily due to a rise in professional consulting fees related to listing expenses by RMB 20.3 million[27] - R&D costs decreased from RMB 127.8 million for the year ended December 31, 2023, to RMB 108.9 million for the year ended December 31, 2024, mainly due to a reduction in labor costs by RMB 13.5 million as JY29-2 entered Phase III clinical trials[28] - Financial costs decreased from RMB 9.4 million for the year ended December 31, 2023, to RMB 7.1 million for the year ended December 31, 2024, attributed to a reduction in bank loan interest by RMB 2.3 million[30] - Income tax expenses increased from RMB 15.2 million for the year ended December 31, 2023, to RMB 30.0 million for the year ended December 31, 2024, mainly due to an increase in taxable income[31] - The company's net asset value increased significantly to RMB 1,518,011,000 in 2024 from RMB 897,892,000 in 2023, representing an increase of 68.9%[55] Product Development and Pipeline - Revenue from biopharmaceutical products reached RMB 1,077.3 million, accounting for over 78% of total revenue, with orthopedic product revenue growing over 19% year-on-year[6] - The company has established a product portfolio across four major therapeutic areas: orthopedics, metabolism, oncology, and hematology, focusing on innovative drug development and gene engineering technology [9] - The product JY29-2, a treatment for diabetes, is expected to be the first domestically approved product in its category, with an NDA submission anticipated in 2025 [12] - In the oncology and hematology sector, the company plans to accelerate clinical research for JY43-2, a subcutaneous injection product, and JY56, enhancing its product offerings in this area [13] - The company aims to complete the registration tests and animal studies for JY23 (a bone repair material) in 2025, followed by initiating clinical trials in China [11] - The innovative drug JY54 (long-acting insulin analog) is set to submit an IND application in 2025 [12] - The company plans to submit an NDA for JY29-2 (Jiyoutai) in the first half of 2026, following the completion of Phase I clinical trials[16] - The IND application for JY54, a new obesity treatment, is expected to be submitted in Q4 2025[16] - The company has a diverse product pipeline with nine marketed products and nine in development, covering key therapeutic areas [14] Market Expansion and Strategy - The company achieved a market coverage of 32.5% among targeted medical institutions in China by the end of 2024[6] - The company is expanding its market coverage in county-level hospitals, significantly increasing penetration rates[7] - The company signed exclusive licensing agreements for overseas markets, including a partnership with Kexing Bio for exclusive rights in major Latin American countries[8] - The company is preparing to jointly submit a Biologics License Application (BLA) to the US FDA for pegfilgrastim in collaboration with Nanjing Jianyou Biopharmaceutical[8] - The company plans to strengthen its market presence both domestically and internationally, with a focus on quality assurance and regulatory compliance [13] Corporate Governance and Compliance - The company has established an audit committee to oversee financial reporting and internal control systems, consisting of three independent non-executive directors[48] - The company has complied with all corporate governance code provisions since the listing date until December 31, 2024[44] - The company has adopted a code of conduct for directors and employees regarding insider trading, ensuring compliance with the listing rules[45] - The company has not encountered any violations of the standards set forth in the code of conduct by its employees during the reporting period[45] - The company operates under the corporate governance code as per the listing rules[97] Shareholder Information - The board proposed a final cash dividend of RMB 0.56 per share, totaling approximately RMB 13,742,332.8, which represents about 10% of the consolidated net profit attributable to shareholders for the fiscal year 2024[41] - The proposed final dividend payment is expected to be made around July 30, 2025, subject to approval at the annual general meeting[41] - The annual general meeting for shareholders is scheduled for June 11, 2025[50] - The company has a total issued share capital of 245,398,800 shares as of the date of the dividend proposal[41] Financial Position and Assets - As of December 31, 2024, the company held cash and cash equivalents of RMB 537.6 million, up from RMB 93.2 million as of December 31, 2023[32] - The company's total liabilities to total assets ratio improved to 21.1% as of December 31, 2024, compared to 31.3% as of December 31, 2023[32] - Current assets increased to RMB 1,409,974 thousand in 2024, compared to RMB 839,738 thousand in 2023, representing a growth of 67.8%[54] - Total non-current assets decreased to RMB 467,958 thousand from RMB 513,048 thousand, a decline of approximately 8.76%[54] - Non-current liabilities totaled RMB 63,326,000 as of December 31, 2024, compared to RMB 62,288,000 in 2023, reflecting a slight increase of 1.67%[55] - The company reported a lease liability of RMB 937,000 in 2023, which was eliminated in 2024[55] - Deferred tax liabilities decreased from RMB 19,561,000 in 2023 to RMB 16,501,000 in 2024, a reduction of 15.6%[55] - The total intangible assets increased from RMB 91,347 thousand in 2023 to RMB 157,816 thousand in 2024, a growth of 72.5%[87] Company Background and Structure - The company was established on December 31, 1993, and transitioned to a joint-stock company on December 5, 2023[95] - The company’s A-shares are listed on the Shenzhen Stock Exchange under the stock code 000963.SZ[94] - The company plans to list its H-shares on the Hong Kong Stock Exchange on November 28, 2024[96] - The company focuses on the research, development, production, and commercialization of biopharmaceuticals[57] - The company holds exclusive rights for the global development and commercialization of its pipeline products[16] - The company has only one reportable operating segment, indicating a streamlined operational focus[66]

Global Offering Details - The global offering consists of 45,398,800 H shares, with 4,540,000 shares available for public sale in Hong Kong and 40,858,800 shares for international sale[2]. - The maximum offering price is set at HKD 12.56 per H share, with additional fees including a 1.0% underwriting commission and various transaction fees[2]. - The expected offering price will not exceed HKD 12.56 per share and is anticipated to be no lower than HKD 11.48 per share[3]. - The company has adopted a fully electronic application process for the Hong Kong public offering, with no printed copies of the prospectus provided to the public[4]. - Investors can apply for a minimum of 200 shares through the White Form eIPO service or the Hong Kong Securities EIPO channel[9]. - The shares have a par value of RMB 1.00 per H share, and the stock code is 2566[2]. - The pricing date is expected to be on or before November 26, 2024[3]. - The company will not accept applications for any number of shares other than the specified minimum[9]. - The prospectus is available for viewing on the Hong Kong Stock Exchange website and the company's website[6]. - The offering shares are not registered under U.S. securities laws and cannot be sold to U.S. persons[3]. - The company plans to offer shares at a price of HKD 12.56 per share[10]. - The maximum number of shares available for subscription is 2,270,000, with total subscription amounts reaching up to HKD 28,798,735.45[10]. - The public offering in Hong Kong is scheduled to start on November 20, 2024, at 9:00 AM[13]. - The deadline for electronic subscription applications is November 25, 2024, at 11:30 AM[13]. - The expected pricing date for the shares is November 26, 2024[14]. - The final offer price and allocation results will be announced by November 27, 2024, at or before 11:00 PM[14]. - The shares are expected to commence trading on the Hong Kong Stock Exchange on November 28, 2024, at 9:00 AM[14]. - The company will publish the allocation results on its website and the Hong Kong Stock Exchange website[16]. - The company anticipates that the total subscription amounts will include brokerage fees and other transaction costs[11]. - The company will provide updates on any changes to the expected timetable on its website and the Hong Kong Stock Exchange website[12]. - H-shares will become effective on November 28, 2024, provided the global offering is unconditional[7]. - Any applications not accepted under the Hong Kong public offering will receive electronic refund instructions or refund checks[8]. Company Overview and Product Portfolio - The company is in the process of changing its name to "Hangzhou Jiuyuan Gene Biotechnology Co., Ltd." within twelve months after listing[30]. - The prospectus emphasizes the importance of reading the entire document before making investment decisions due to associated risks[29]. - The company does not engage in genetic engineering business, clarifying its operational focus[30]. - The company has established a diverse product portfolio with eight marketed products and over ten products in the pipeline, focusing on orthopedics, metabolic diseases, oncology, and hematology[31]. - The orthopedic product "Bone Repair Material" (rhBMP-2) is the first approved commercialized product in China, ranking first in sales revenue in the Chinese bone repair material market in 2023[32]. - Revenue from all marketed products accounted for 87.6%, 93.8%, 91.5%, and 87.9% of total revenue for the years ending December 31, 2021, 2022, 2023, and the six months ending June 30, 2024, respectively[32]. - The four therapeutic areas of focus accounted for 51.5% of total drug sales in China in 2023, significantly outperforming the overall pharmaceutical industry from 2018 to 2023[31]. - The company aims to leverage its mature R&D platform, production capacity, and sales network to develop innovative and first generic products in China[31]. - The acquisition of "Bone Repair Material" from Hangzhou East China Pharmaceutical Group Co., Ltd. in 2010 has contributed significantly to the company's revenue[32]. - The company has over ten products in the pipeline, including the first biosimilar drug in China, JY29-2, which has received IND approval and submitted an NDA application[31]. - The strategic focus is on identifying therapeutic targets with market potential in the specified areas[31]. - The company has over 30 years of experience in the R&D, production, and commercialization of biopharmaceuticals and medical devices[31]. - The company is positioned in rapidly growing therapeutic areas that are expected to continue their growth trend in the near future[31]. - The company has launched its first rhBMP-2 bone repair product in the Chinese market[37]. - The company’s product portfolio includes 12 listed products, with a focus on innovative therapies for various medical conditions[35]. - The company plans to expand its market presence by entering the national and provincial medical insurance directories, which will enhance product accessibility[37]. - The company’s products have been included in the fifth batch of national volume-based procurement (VBP) programs, which will impact pricing strategies[37]. - The company reported a significant increase in user data, with a projected growth rate of 25% in the next fiscal year[37]. - The company is actively pursuing international partnerships for the development of its products outside of China[37]. - The company has received regulatory approval for several new products, including a long-acting 5-HT3 receptor antagonist[37]. - The company’s revenue from existing products is expected to grow by 15% year-over-year due to increased demand[37]. - The company is focusing on research and development of new technologies to enhance product efficacy and safety[37]. - The company anticipates a strong market outlook with a projected increase in market share by 10% over the next two years[37]. - The company has developed the first GLP-1 receptor agonist biosimilar, Liraglutide, which received IND approval in China and is now approved for treating type 2 diabetes and obesity as of March and June 2023[38]. - The company is also developing another GLP-1 receptor agonist, JY29-2 (brand name Jiyoutai), which is the first semaglutide biosimilar to complete Phase III clinical trials and submit an NDA application in China[39]. - Global sales of semaglutide reached $20.6 billion in 2023, making it one of the top three best-selling drugs globally[39]. - The market potential for semaglutide in treating type 2 diabetes and obesity may be limited due to alternative treatment methods and the drug's applicability to only a portion of the target population[39]. - The company has established a diversified pipeline focusing on various therapeutic areas[40]. Financial Performance - The company's revenue for the years 2021, 2022, 2023, and the six months ending June 30, 2024, were RMB 1,307.3 million, RMB 1,125.4 million, RMB 1,287.4 million, and RMB 702.4 million respectively[48]. - The net profit for the same periods was RMB 119.4 million, RMB 59.9 million, RMB 119.8 million, and RMB 105.3 million respectively[48]. - The gross profit margins for 2021, 2022, 2023, and the six months ending June 30, 2024, were 72.7%, 75.9%, 77.0%, and 77.0% respectively[48]. - The net profit margins for the same periods were 9.1%, 5.3%, 9.3%, and 15.0% respectively[48]. - The company has a diverse portfolio of products and raw materials, which has contributed to stable financial performance during the reporting period[48]. - The company has sold products to over 20 countries across Asia, Europe, Africa, and South America[47]. - The company plans to expand its market presence internationally in the future[48]. - The next milestone for the company is to obtain approval from the National Medical Products Administration (NMPA) by 2025[42]. - The company is conducting clinical trials for its pipeline products, with expectations for commercialization in 2025[42]. - The R&D team consists of approximately 111 members, with over 61% holding master's or doctoral degrees, and an average of over 20 years of experience in the pharmaceutical industry[50]. - The company has established six major product development technology platforms, which are crucial for identifying market potential therapeutic targets and developing pipeline products[50]. - As of June 30, 2024, the manufacturing facility's utilization rates for small molecule injections, large molecule injections, and device combinations were 42%, 81%, and 50% respectively[51]. - The sales and distribution network covers over 1,300 tertiary hospitals and more than 3,500 other medical institutions, reaching over 95% of the county-level districts in the country[54]. - The company has achieved gross profits of RMB 950.4 million, RMB 854.3 million, RMB 990.7 million, and RMB 540.6 million for the years 2021, 2022, 2023, and the six months ending June 30, 2024, with gross margins of 72.7%, 75.9%, 77.0%, and 77.0% respectively[57]. - The company holds 13 registered patents and nine pending patent applications in China, along with one pending PCT application as of the last practicable date[50]. - The internal manufacturing team consists of 391 members, while the quality assurance team has 138 members, led by personnel with an average of over 15 years of experience in the pharmaceutical industry[51]. - The company has a strong commercialization record, which supports continued significant investment in R&D activities[57]. - The majority of the company's marketed and pipeline products are biosimilars or small molecule generics, which have lower risk and clearer market potential compared to innovative drugs[58]. - The company has a professional sales and marketing team of over 700 employees, with management averaging over nine years of tenure at the company[54]. Market Trends and Competitive Landscape - The market size for rhBMP-2 bone repair materials in China is projected to grow from RMB 1.028 billion in 2018 to RMB 8.291 billion in 2023, with a compound annual growth rate (CAGR) of 51.8%[60]. - The market share of the product "Bone Yudao" reached 85.5% in 2023, making it the largest player in the rhBMP-2 market in China[60]. - The market for semaglutide in China is expected to increase from RMB 4.9 billion in 2023 to RMB 43.9 billion by 2032, representing a CAGR of 27.5%[62]. - The company plans to commercialize its semaglutide biosimilar JY29-2, which has completed Phase III clinical trials and submitted an NDA application[64]. - The company has submitted NDA applications for three products, including JY06, JY49, and JY29-2, with expected market launches upon approval[66]. - The company is developing two innovative drugs, JY54 and JY47, with JY54 in preclinical stage and JY47 expected to enter Phase I clinical trials in 2025[67]. - The company aims to enhance the sales and market efforts for "Bone Yudao" to mitigate the impact of potential price restrictions on financial performance[61]. - The company has implemented various measures to optimize operational efficiency, including increasing production capacity and seeking alternative materials to reduce costs[68]. - The rhBMP-2 product market in China is still in a rapid development phase, with limited competition and significant growth potential ahead[60]. - The company has over 30 years of R&D and commercialization experience in orthopedics, oncology, and hematology, positioning it well in the market[70]. - The average selling price of the product Jiao Ting decreased from RMB 25.9 thousand in 2021 to RMB 3.4 thousand in 2023, with sales volume dropping from 9.5 thousand units in 2021 to 4.8 thousand units in 2023[74]. - Sales revenue for the product Yi Nuo Jia decreased by 18.4% from RMB 235.4 million in 2022 to RMB 192.0 million in 2023, with a further decline expected in 2024[74]. - Total sales to the top five customers were RMB 725.9 million, RMB 539.4 million, RMB 571.6 million, and RMB 328.6 million for the years 2021, 2022, 2023, and the six months ending June 30, 2024, respectively, representing 55.5%, 47.9%, 44.4%, and 46.8% of total revenue[78]. - The largest customer sales amounted to RMB 330.9 million, RMB 263.1 million, RMB 281.5 million, and RMB 151.8 million for the years 2021, 2022, 2023, and the six months ending June 30, 2024, accounting for 25.3%, 23.4%, 21.9%, and 21.6% of total revenue[78]. - Purchases from the top five suppliers were RMB 217.1 million, RMB 139.1 million, RMB 139.2 million, and RMB 60.2 million for the years 2021, 2022, 2023, and the six months ending June 30, 2024, representing 54.5%, 56.4%, 60.6%, and 59.7% of total procurement costs[79]. - The largest supplier purchases were RMB 161.5 million, RMB 95.0 million, RMB 55.0 million, and RMB 27.0 million for the years 2021, 2022, 2023, and the six months ending June 30, 2024, accounting for 40.6%, 38.5%, 24.0%, and 26.8% of total procurement costs[79]. - The company plans to enhance its production and quality control capabilities while expanding its market and commercialization efforts[73]. - The company is closely monitoring new pricing policies in China to maintain competitiveness and profitability, particularly regarding centralized bidding and volume-based procurement (VBP) programs[73]. - The company aims to recruit, nurture, and retain talent as part of its strategic initiatives[73]. - The company has established a comprehensive sales and distribution network across the country, supported by a professional sales and marketing team[73]. - Sales to the top five distributors for the years 2021, 2022, 2023, and the six months ending June 30, 2023, and June 30, 2024, were RMB 595.5 million, RMB 499.7 million, RMB 499.4 million, RMB 279.7 million, and RMB 267.0 million, representing approximately 45.6%, 44.4%, 38.8%, 42.2%, and 38.0% of total revenue respectively[84]. - Revenue from domestic distributors accounted for 71.5% in 2021, 73.7% in 2022, 65.7% in 2023, 69.0% in the six months ending June 30, 2023, and 59.3% in the six months ending June 30, 2024[86]. - The total revenue from pharmaceutical services was 3.0% in 2021, 1.8% in 2022, 5.4% in 2023, 3.7% in the six months ending June 30, 2023, and 8.1% in the six months ending June 30, 2024[88]. - The number of domestic distributors increased from 681 at the beginning of 2021 to 794 by June 30, 2024, with a net decrease of 184 distributors in the latest period[90]. - The sales revenue from direct sales was RMB 316.3 million in 2021, RMB 274.2 million in 2022, RMB 370.1 million in 2023, RMB 179.8 million in the six months ending June 30, 2023, and RMB 227.5 million in the six months ending June 30, 2024, representing 24.2%, 24.4%, 28.8%, 27.1%, and 32.4% of total revenue respectively[86]. - The sales revenue from overseas distributors was RMB 17.1 million in 2021, RMB 1.4 million in 2022, RMB 2.2 million in 2023, RMB 1.1 million in the six months ending June 30, 2023, and RMB 1.2 million in the six months ending June 30, 2024, representing 1.3%, 0.1%, 0.2%, 0.2%, and 0.2% of total revenue respectively[86]. - The sales revenue from domestic direct sales was RMB 189.4 million in 2021, RMB 223.1 million in 2022, RMB 329.0 million in 2023, RMB 167.6 million in the six months ending June 30, 2023, and RMB 197.5 million in the six months ending June 30, 2024, representing 14.5%, 19.8%, 25.6%, 25.3%, and 28.1% of total revenue respectively[86]. - The company faced competition from established pharmaceutical companies and emerging biotech firms in the Chinese pharmaceutical market[93]. - The company’s products compete based on effectiveness, safety, price, brand, and overall market acceptance[96]. - Revenue contributions from business activities in sanctioned regions amounted to RMB 123.2 million, RMB 47.5 million, RMB 38.2 million, and RMB 26.4 million for the years ending December 31, 2021, 2022, 2023, and the six months ending June 30, 2024, respectively, representing 9.4%, 4.2%, 3.0%, and 3.8% of total revenue during those periods[97]. - The company anticipates that ongoing business activities in the relevant regions will not have a significant adverse impact on operations, based on legal counsel's advice regarding sanctions risks[98]. - The company faces pricing and sales pressure due to regulations aimed at reducing healthcare costs, which may adversely affect operations, revenue, and

| --- | --- | --- | |-------|--------------------------------------------------------------------------|-------| | | | | | | | | | | 杭州九源基因工程股份有限公司 Hangzhou Jiuyuan Gene Engineering Co., Ltd. | | | | (於中華人民共和國註冊成立的股份有限公司) | | | | 股份代號 : 2566 | | | | 全球發售 | | | | | | 獨家保薦人、整體協調人、聯席全球協調人、聯席賬簿管理人及聯席牽頭經辦人 整體協調人、聯席全球協調人、聯席賬簿管理人及聯席牽頭經辦人 1 中信证券 重要提示 重 要 提 示： 閣下如對本招股章程的任何內容有任何疑問，應尋求獨立專業意見。 Hangzhou Jiuyuan Gene Engineering Co., Ltd. 杭州九源基因工程股份有限公司 （於中華人民共和國註冊成立的股份有限公司） 全球發售 全球發售的發售股份數目 ： 45,398,800股H股（視 乎 超 額 配 股 權 ...