Summary of Pharmaron (3759.HK) Earnings Review Company Overview - **Company**: Pharmaron (3759.HK) - **Market Cap**: HK$33.4 billion / $4.3 billion - **Enterprise Value**: HK$38.9 billion / $5.0 billion - **Current Price**: HK$18.82 - **12-Month Price Target**: HK$31.00 (Upside: 64.7%) [1][6] Financial Performance - **4Q25 Revenue Growth**: +16% year-over-year (y/y) [1] - **4Q25 Non-IFRS Net Profit Growth**: +18% y/y [1] - **Margins**: Sequential improvement in margins through 2025, with non-IFRS net margins of 11.3%, 12.2%, 12.9%, and 14.7% for 1Q-4Q25 [1] - **New Orders**: Total new orders increased by approximately 14% y/y, driven by laboratory services (+12% y/y) and small-molecule D&M (+13% y/y) [1] Revenue Guidance - **FY26 Revenue Growth Guidance**: Expected to grow by 12-18% y/y, factoring in an assumed 3% depreciation of the US dollar [1] Segment Review Laboratory Services - **4Q25 Revenue Growth**: +17.9% y/y, with a gross margin of 44.3% [3] - **Bioscience Contribution**: Over 56% of segment revenue [3] - **Investments**: Enhancements in service capabilities through AI and automation [3] Small-Molecule CDMO - **4Q25 Revenue Growth**: +17.6% y/y, gross margin improved to 37.8% from 34.2% in 3Q [18] - **New Large-Scale Production Order**: Signed in 1Q26 [18] Clinical Development - **4Q25 Revenue Decline**: -0.7% y/y, gross margin at 10.3% [18] - **Pricing Pressure**: Indications of stabilization in pricing [18] Biologics & CGT - **Revenue Growth**: +43.4% y/y, with gross margin improving sequentially [18] Strategic Partnerships - **Cooperation with Eli Lilly**: Near-term revenue contribution will take time due to technology transfer and validation work; highlights long-term structural opportunities in localized manufacturing in China [2] Valuation and Risks - **Target Price Adjustments**: Fine-tuned net profit estimates for 2026E-28E by +0.1%, +1.0%, +2.3% [17] - **Key Upside Risks**: 1. Accelerated revenue conversion from increased customer engagement 2. Better-than-expected facilities ramp-up 3. Improved profitability for CGT business [17] - **Downside Risks**: 1. Escalation in US-China trade tensions 2. Growing labor costs and talent retention challenges 3. Slowdown in global pharma R&D spending [17] Conclusion Pharmaron is positioned for growth with solid revenue guidance and strategic partnerships, although it faces potential risks from external market conditions and internal operational challenges. The company continues to enhance its service capabilities and expand its market presence, particularly in the laboratory services and small-molecule CDMO segments.

Summary of the Conference Call for 康龙化成 (Kanglong Chemical) Company Overview - 康龙化成 is a leading player in the pharmaceutical and biotechnology services industry, focusing on laboratory services, small molecule CDMO (Contract Development and Manufacturing Organization), and clinical services. Key Financial Highlights - In 2025, the company achieved revenue of 140.95 billion CNY, a year-on-year increase of 14.8% [3] - Adjusted net profit was 18.16 billion CNY, up 13% year-on-year, while net profit attributable to shareholders decreased by 7.2% due to significant investment gains in 2024 [3] - Revenue from the top 20 global pharmaceutical companies grew by 29.4%, accounting for 20% of total revenue [3] - New orders increased by over 14% year-on-year, with more than 950 new clients contributing approximately 4% to revenue [3] Business Segment Performance Laboratory Services - Revenue reached 81.59 billion CNY, a 15.8% increase year-on-year, with a gross margin of 44.7% [5] - The segment participated in 887 global new drug discovery projects, showing an increase from 2024 [5] - The growth was driven by the integration of AI and automation technologies, enhancing research efficiency [5] Small Molecule CDMO - Revenue was 34.83 billion CNY, up 16.5% year-on-year, with a gross margin of 33.8% [6] - The segment saw significant order growth, particularly in the second half of the year, with Q4 revenue reaching 11.9 billion CNY [6] - The number of late-stage projects increased significantly, with 47 Phase III projects and 34 commercial projects [7] Clinical CRO Services - The clinical business saw a slight increase in new orders, with overseas business achieving double-digit growth, accounting for over 35% of total revenue [14] - Domestic CRO and SMO services showed modest growth, with signs of price recovery in the market [14] Strategic Developments - The company made significant strides in commercialization, with API production facilities in Ningbo and Shaoxing passing FDA inspections, leading to the approval of its first commercial API for the U.S. market [3][12] - A major commercial agreement was signed with a multinational corporation for the production of oral small molecule GLP-1 formulations [3] - The ADC (Antibody-Drug Conjugate) production facility has been launched, and a new large-scale peptide API solid-phase synthesis facility is expected to be completed by 2026 [6][11] Market Outlook - For 2026, the company projects revenue growth of 12% to 18%, with a strong order pipeline and expected acceleration in CDMO revenue growth [8][15] - The company anticipates that the CDMO segment will continue to outpace overall company growth, with further improvements in revenue share and profitability [8][10] - The company is well-positioned to leverage its integrated service platform and technological advancements to attract more clients and enhance service delivery [15] Risks and Challenges - Potential impacts from currency fluctuations, particularly the appreciation of the RMB against the USD, are acknowledged, but the company expects revenue growth to offset these effects [8][15] - The clinical business may still be influenced by low-priced orders signed in previous years, affecting revenue in 2026 [14] Conclusion - 康龙化成 demonstrated robust growth in 2025, with strong performances across its core business segments. The company is optimistic about its future prospects, driven by a solid order backlog and strategic partnerships, despite facing some external economic challenges [16][17]

Group 1 - The company, Kanglong Chemical, announced that it will accept investor research on March 31, 2026, with participation from CFO and Board Secretary Li Chengzong [1] - The company is engaging with investors through a structured research process, indicating a proactive approach to investor relations [1] Group 2 - Multiple banks have announced the cleaning of "sleeping" accounts, which may impact the banking industry and customer account management practices [1]

Financial Performance - In 2025, the company achieved a revenue of CNY 14.095 billion, representing a year-on-year growth of 14.8% [2] - Adjusted net profit attributable to shareholders was CNY 1.816 billion, up 13.0% year-on-year [2] - The net profit attributable to shareholders decreased by 7.2% to CNY 1.664 billion, primarily due to significant investment gains from the disposal of PROTEOLOGIX shares in 2024 [2] Business Segments - Laboratory services generated revenue of CNY 8.159 billion, with a gross margin of 44.7%, an increase of 0.3 percentage points year-on-year [3] - Small molecule CDMO services reported revenue of CNY 3.483 billion, growing by 16.5%, with a gross margin of 33.8%, up 0.7 percentage points [3] - Clinical research services earned CNY 1.957 billion, reflecting a growth of 7.1% [3] - Large molecule and CGT services achieved revenue of CNY 475 million, also growing by 16.5% [3] Client and Project Growth - The company added over 950 new clients in 2025, bringing the total active clients to over 3,300 [3] - The company participated in 887 global new drug discovery projects, an increase from 2024 [3] - In CMC services, the company was involved in 1,102 projects, including 34 commercial and validation projects, 47 Phase III projects, 271 Phase I/II projects, and 750 preclinical projects [3] Strategic Developments - A strategic cooperation agreement was signed in Q1 2026 with a major international pharmaceutical company for commercial production services of an oral small molecule GLP-1 receptor agonist [3] - The company has established 28 R&D centers and production bases globally, enhancing its integrated R&D and production capabilities [3] Future Outlook - The company expects steady growth in 2026, with new order momentum continuing [4] - Revenue growth in small molecule CDMO services is anticipated to outpace overall company revenue growth, with improved gross margins expected [4] - Clinical research services are projected to maintain growth in 2026 [4]

Group 1: Financial Performance - Revenue reached RMB 14,095 million, with a year-over-year growth of 14.8% [14] - Non-IFRS net profit was RMB 1,816 million, reflecting a year-over-year growth of 13.0% [14] - Net profit declined to RMB 1,664 million, a year-over-year decrease of 7.2% [14] - Revenue from the top 20 multinational corporations (MNCs) grew by 29.4% [14] Group 2: Customer and Market Expansion - Over 950 new customers acquired, totaling over 3,300 active customers, including all top 20 MNCs [15] - Revenue from China entities grew by 15.0%, while overseas subsidiaries saw a growth of 13.8% [21] - New purchase orders (POs) increased by 14% year-over-year [14] Group 3: Operational Highlights - 28 R&D and manufacturing facilities across China, the UK, the US, and Singapore [15] - 887 drug discovery projects currently in progress [16] - 1,397 clinical research organization (CRO) projects, including 125 in Phase III [16] Group 4: Future Outlook - Expected revenue growth of 12-18% year-over-year in 2026 [45] - Continued development of an end-to-end, fully integrated services platform [45] - Focus on advancing the contract development and manufacturing organization (CDMO) business model and integrating AI and automation [45] Group 5: ESG and Sustainability - Achieved an MSCI ESG rating of AA and recognized as a low-risk company by Sustainalytics [23] - Joined the United Nations Global Compact (UNGC) and received the EcoVadis Silver Prize [24]

Group 1: Financial Performance - Revenue reached CNY 14.095 billion, a year-on-year increase of 14.8% [13] - Non-IFRS adjusted net profit was CNY 1.816 billion, up 13.0% year-on-year [13] - Net profit decreased to CNY 1.664 billion, a decline of 7.2% year-on-year [13] - Revenue from TOP 20 pharmaceutical clients grew by 29.4% [13] - New orders increased by over 14% year-on-year [13] Group 2: Business Segments - Revenue composition: 88% from China delivery business, 12% from overseas [16] - Laboratory services accounted for 58% of total revenue [16] - Small molecule CDMO services contributed 25% [16] - Clinical research services made up 14% [16] - Large molecule and CGT services represented 3% [16] Group 3: Client Growth - Global client revenue: North America up 11.0%, Europe up 27.4%, China up 15.7% [17] - Revenue from existing clients increased by 11.7% [19] - New clients accounted for 4% of total revenue [20] Group 4: Operational Highlights - Participated in 887 drug discovery projects [28] - 1,397 ongoing clinical research projects, including 125 Phase III trials [32] - 19 gene therapy CDMO projects, including 1 Phase III and 9 Phase I/II projects [33] Group 5: Future Outlook - The company aims for a revenue growth of 12-18% year-on-year by 2026 [49] - Focus on enhancing CDMO business model and integrating AI and automation technologies [49] - Commitment to sustainable development and improving ESG ratings [21][22]

证券研究报告 康龙化成 (300759 CH/3759 HK) 2026 年 3 月 31 日│中国内地/中国香港 医疗服务 公司 25 年实现收入 140.95 亿元（yoy+14.8%）、经调整 non-IFRS 归母净 利 18.16 亿元（yoy+13.0%），符合业绩预告预期；其中 4Q25 收入/经调 整 non-IFRS 归母净利 yoy+15.9%/+18.0%，qoq+10.0%/+25.2%，公司整 体业绩积极提速。公司客户询单量持续向好，25 年新签订单金额同比增长 超 14%（较 1-3Q25 的超 13%进一步提速）。根据新签订单和业务趋势， 公司预计 26 年收入将同比增长 12%-18%。考虑下游行业需求持续回暖， 叠加公司实验室服务核心业务能力过硬且其它业务板块日趋成熟，看好公司 26 年实现向好发展。公司 A、H 股均维持"买入"。 毛利率持续提升，现金流积极向好 公司 25 年毛利率为 34.8%（yoy+0.6pct），实验室服务、CMC 等关键业务 经营向好，带动整体毛利率稳中有升。公司 25 年销售/管理/研发费用率分 别为 2.2%/12.3%/4.1%（yoy+0 ...

Core Viewpoint - 康龙化成's stock rose over 7%, reaching 20.16 HKD, with a trading volume of 94.7765 million HKD, following the release of its 2025 fiscal year performance report [1] Financial Performance - For the fiscal year 2025, 康龙化成 reported revenue of 14.095 billion RMB, an increase of 14.8% year-on-year [1] - The net profit attributable to the parent company was 1.664 billion RMB, a decrease of 7.2% year-on-year [1] - In Q4 2025, the company achieved a quarterly revenue of 4.009 billion RMB, up 15.93% year-on-year, and a net profit of 523 million RMB, up 40.76% year-on-year [1] - The company's laboratory services generated revenue of 8.1589 billion RMB, reflecting a year-on-year growth of 15.8% [1] - The gross profit margin for the fiscal year 2025 was 44.7% [1] Future Outlook - 华泰证券 noted that 康龙化成's overall performance is accelerating positively, with a continuous increase in customer inquiries [1] - The new order amount for 2025 increased by over 14% year-on-year, showing further acceleration compared to the over 13% growth in the first three quarters of 2025 [1] - Based on new orders and business trends, the company expects revenue growth of 12%-18% year-on-year for 2026 [1] - The ongoing recovery in downstream industry demand, combined with the company's strong core laboratory service capabilities and the maturation of other business segments, supports a positive outlook for 康龙化成 in 2026 [1]

Investment Rating - The report maintains a "BUY" rating for Pharmaron Beijing, indicating a potential return of over 15% over the next 12 months [18]. Core Insights - Pharmaron reported a revenue growth of 14.8% YoY to RMB 14.10 billion and a non-IFRS adjusted net profit increase of 13.0% YoY to RMB 1.82 billion for 2025, both exceeding estimates [1][2]. - The company expects revenue growth of 12-18% YoY in 2026, factoring in a negative impact of 3 percentage points from foreign exchange [1]. - A significant CDMO deal with Eli Lilly is expected to enhance future growth, with Eli Lilly investing US$200 million to support Pharmaron's technical capabilities [9]. Financial Performance - For FY25, revenue was RMB 14,095 million, with a YoY growth of 14.8% and adjusted net profit of RMB 1,816 million, reflecting a 13.0% YoY increase [2]. - Revenue projections for FY26, FY27, and FY28 are RMB 16,410 million, RMB 19,019 million, and RMB 21,855 million, respectively, with YoY growth rates of 16.4%, 15.9%, and 14.9% [2]. - Adjusted net profit is expected to reach RMB 2,156 million, RMB 2,537 million, and RMB 2,955 million for FY26, FY27, and FY28, with corresponding YoY growth rates of 18.7%, 17.7%, and 16.5% [2]. Valuation - The target price for Pharmaron has been raised from RMB 38.08 to RMB 39.00, reflecting a 39.4% upside from the current price of RMB 27.98 [3]. - The DCF-based valuation incorporates a WACC of 9.32% and a terminal growth rate of 2.0% [9][12]. Market Position - Revenue from global Top 20 pharma clients surged by 29.4% YoY, significantly outpacing the company's overall growth, while revenue from European clients grew by 27.4% YoY [9]. - Newly signed orders increased by over 14% YoY, continuing a robust growth trend following a greater than 20% YoY increase in 2024 [9].

Core Viewpoint - The company's 2025 performance aligns with expectations, showing a revenue increase but a decline in net profit due to high comparative figures from 2024 [1] Group 1: Financial Performance - In 2025, the company reported revenue of 14.095 billion, a year-on-year increase of 14.8% [1] - The net profit attributable to shareholders was 1.664 billion, a year-on-year decrease of 7.2%, primarily due to high investment gains from equity disposals in 2024 [1] - Adjusted net profit reached 1.816 billion, reflecting a year-on-year increase of 13.0% [1] Group 2: Business Development Trends - The laboratory services segment experienced robust growth, with revenue of 8.159 billion in 2025, up 15.78% year-on-year, and a gross margin of 45.10%, an increase of 0.18 percentage points [2] - Revenue from the top 20 global pharmaceutical clients grew by 29.37%, increasing their revenue contribution to 20.09% [2] - The small molecule CDMO segment achieved revenue of 3.483 billion, a year-on-year increase of 16.53%, with a gross margin of 34.31%, up 0.69 percentage points [2] - The company successfully launched its first commercial API production project for the U.S. market in Q4 2025 and signed a strategic cooperation agreement with Eli Lilly for the commercialization of an oral small molecule GLP-1 receptor agonist [2] Group 3: Profit Forecast and Valuation - The company maintains its profit forecasts for 2026 and 2027, with current A-share prices corresponding to 25.6x and 20.5x P/E ratios for 2026 and 2027, respectively [3] - The A-share target price is set at 35.00, implying a 25.1% upside potential from the current price [3] - The H-share target price is set at 26.00 HKD, indicating a 38.2% upside potential from the current price [3]