Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Pharma & Biotech - **Trend**: High-value out-licensing from China to multinational corporations (MNCs) is on the rise, with significant growth in transaction values and deal numbers from 2020 to August 2025 [2][6][8]. Core Insights - **Out-licensing Growth**: - The share of out-licensed molecules from China increased from 4% to 19% of global deals, while total transaction consideration rose from 1% to 52% [2][6]. - Over 40% of deals with total transaction consideration exceeding $1 billion originated from China, and more than 20% of MNC collaborations are now from China [2][8]. - **Investment Trends**: - MNCs are increasingly investing in China's biotech assets due to their innovative potential, cost-effectiveness, and strong clinical data [1][23]. - The trend of fund inflow and increased ownership by larger institutions in China Healthcare is becoming prominent [1]. - **Key Companies**: - Top picks in the Pharma/Biotech sector include Hengrui, Hansoh, Ascletis, Abbisko, Fosun Pharm, Sino Biopharm, and Luye [1]. Potential Business Development (BD) Opportunities - **Areas of Interest**: - High interest in next-generation immuno-oncology (IO), oral GLP-1, antibody-drug conjugates (ADC), bispecific antibodies for autoimmune diseases, and siRNA platforms [3][34]. - Candidates with higher safety and efficacy potential in obesity treatments are being prioritized, particularly oral GLP-1 candidates [3][39]. - **Valuation and Differentiation**: - Valuation is crucial for next-generation IO candidates, while differentiation is key for obesity candidates due to market competition [3][39]. Geopolitical Considerations - **Geopolitical Risks**: - Although there are concerns regarding potential restrictions on partnerships with China-developed assets, the likelihood of such restrictions being implemented is considered low [4][21][22]. - The urgency for global drugmakers to replenish their pipelines amid patent cliffs and pricing pressures makes China-originating assets increasingly important [4][22]. Market Dynamics - **US In-licensing**: - China-originated assets accounted for approximately 24% of total US in-licensing deals in 2025, a significant increase from 5% in 2021 [24]. - **Pipeline Replenishment**: - A substantial number of best-selling drugs are set to lose market exclusivity between 2025 and 2030, creating a strong need for global drugmakers to enrich their pipelines [26]. Key Candidates and Products - **Innovative Pipeline**: - Companies like MSD, BMS, and Pfizer are actively seeking next-generation IO candidates and other innovative assets to strengthen their portfolios [29][38]. - **Obesity Treatments**: - Candidates such as oral GLP-1s and muscle-preserving drugs are highlighted for their potential in the obesity market, which is projected to be worth around $30 billion [39][40]. Conclusion - The China Pharma & Biotech sector is experiencing a transformative phase with increasing out-licensing activities and MNC investments. The focus on innovative assets, particularly in oncology and metabolic diseases, presents significant opportunities for growth and collaboration in the coming years.

Core Viewpoint - The Hang Seng Healthcare Index increased by 2.2% last week, underperforming the broader market, with the CXO, biopharmaceutical, and traditional Chinese medicine sectors showing better performance [1] Group 1: Market Trends - Domestic investors have been increasing their holdings through the Hong Kong Stock Connect since September, while foreign investors' holdings have slightly decreased since mid-year, although both continue to focus on innovative drug companies [1] - Both domestic and foreign investors have increased their positions in service-related stocks, particularly those that may benefit from interest rate cuts, such as CXO companies [1] Group 2: Upcoming Events - The ESMO conference is scheduled for mid to late October, and the report suggests focusing on companies like CanSino Biologics (09926), Kelun-Biotech (06990), and Rongchang Biologics (09995), which are expected to release significant data [1] Group 3: Investment Recommendations - The report recommends attention to the following sectors: 1) Innovative drugs: Companies like 3SBio (01530) and Eucure Biopharma-B (06996) have abundant short-term catalysts and their valuations do not yet reflect the value of core products; companies like Ascletis Pharma (02096), Hutchison China MediTech (00013), and Legend Biotech are significantly undervalued with clear long-term growth logic [1] 2) CXO: Leaders in this segment, such as WuXi AppTec (02268), are expected to benefit from high downstream demand and improving financing conditions [1]

Core Insights - Changchun High-tech is a leading innovation-driven pharmaceutical group in China, with a diverse product matrix covering therapeutic biopharmaceuticals, chemical drugs, vaccines, and traditional Chinese medicine [2] - The company has established a strong and diversified product portfolio in endocrine and metabolic diseases, women's health, immune and respiratory diseases, oncology, vaccines, and traditional Chinese medicine [2] - As of September 23, 2025, Changchun High-tech has over 40 candidates in clinical stages or with IND applications submitted, including 14 in Phase III clinical trials or NDA stages [2] Financial Performance - Revenue for the years 2022, 2023, 2024, and the six months ending June 30, 2025, were approximately RMB 12.63 billion, RMB 14.57 billion, RMB 13.47 billion, and RMB 6.64 billion respectively [4] - The company reported a profit of RMB 4.22 billion in 2022, RMB 4.78 billion in 2023, and RMB 2.71 billion in 2024, with a profit of RMB 1.80 billion for the six months ending June 30, 2025 [4] - Gross profit for the same periods was RMB 11.11 billion, RMB 12.52 billion, RMB 11.54 billion, and RMB 5.62 billion respectively [4]

Core Viewpoint - Changchun High-tech has submitted a listing application to the Hong Kong Stock Exchange, aiming to expand its market presence after being listed on the Shenzhen Stock Exchange. The company is recognized as a leading innovation-driven pharmaceutical group in China, with a comprehensive product portfolio across various drug categories [1]. Group 1: Company Overview - Changchun High-tech is a prominent pharmaceutical group in China, focusing on therapeutic biological agents, chemical drugs, vaccines, and traditional Chinese medicine, with capabilities in R&D, production, and commercialization across all major drug registration types [1]. - The company has established a competitive and diversified product matrix driven by a differentiated innovation strategy, leading to strong financial performance and sustainable growth [1]. Group 2: Product Development and Pipeline - As of September 23, 2025, Changchun High-tech has successfully launched 13 new drug products, including the first domestically developed shingles vaccine approved in January 2023 and the first innovative biological drug for acute gouty arthritis approved in June 2025 [2]. - The company is actively expanding the indications of its approved products to cover a broader patient population, such as the approval of Jin Sai Zeng for ISS and Turner syndrome in 2024, which addresses approximately 82.3% of the pediatric short stature population in China [2]. Group 3: Financial Performance - The company reported revenues of approximately RMB 126.27 billion, RMB 145.66 billion, RMB 134.66 billion, and RMB 66.03 billion for the fiscal years 2022, 2023, 2024, and the six months ending June 30, 2025, respectively. Corresponding profits for these periods were approximately RMB 42.15 billion, RMB 47.76 billion, RMB 27.08 billion, and RMB 9.32 billion [3].

Core Viewpoint - Changchun High-tech Industry (Group) Co., Ltd. has submitted a listing application to the Hong Kong Stock Exchange, with CITIC Construction Investment International as the sole sponsor, indicating its intention to expand its market presence after being listed on the Shenzhen Stock Exchange [1][3]. Group 1: Company Overview - Changchun High-tech is a leading innovation-driven pharmaceutical group in China, covering therapeutic biological agents, chemical drugs, vaccines, and traditional Chinese medicine, with comprehensive capabilities in R&D, production, and commercialization across all major drug registration types [3][4]. - The company has established a strong and diversified product portfolio in various therapeutic areas, including endocrine and metabolic diseases, women's health, immune and respiratory diseases, tumors, vaccines, and traditional Chinese medicine [4]. Group 2: Financial Performance - The sales revenue of Changchun High-tech's pharmaceutical products reached RMB 12.7 billion in 2024, maintaining over RMB 10 billion for four consecutive years [3]. - The company has consistently ranked among the "Top 100 Pharmaceutical Enterprises in China" for eight consecutive years since 2017 [3]. - Revenue figures for the fiscal years 2022 to 2025 show a growth trajectory, with revenues of approximately RMB 126.27 billion, RMB 145.66 billion, RMB 134.66 billion, and RMB 66.03 billion for the first half of 2025 [5][7]. Group 3: Product Development and Pipeline - As of September 23, 2025, Changchun High-tech has over 40 candidate drugs in clinical stages or submitted for IND applications, including 14 in Phase III clinical trials or NDA stages and 15 first-class innovative drugs [5]. - The company has successfully launched 13 new drug products during the historical record period, including the first domestically developed shingles vaccine approved in January 2023 and the first innovative biological drug for acute gouty arthritis approved in June 2025 [4][5].

Core Viewpoint - Changchun High-tech Industry (Group) Co., Ltd. has submitted a listing application to the Hong Kong Stock Exchange, with CITIC Construction Investment International as the sole sponsor, while already being listed on the Shenzhen Stock Exchange [1]. Group 1: Company Overview - Changchun High-tech is a leading innovation-driven pharmaceutical group in China, covering therapeutic biological agents, chemical drugs, vaccines, and traditional Chinese medicine, with capabilities across all major drug registration types in China [4]. - The company has established a competitive and diversified product matrix through a differentiated innovation strategy, leading to strong financial performance and a solid foundation for sustainable growth [4]. - In 2024, the sales revenue from pharmaceutical products is projected to reach RMB 12.7 billion, maintaining over RMB 10 billion for four consecutive years [4]. Group 2: Product Development and Pipeline - Changchun High-tech has developed a strong and diversified product portfolio in areas such as endocrine and metabolic diseases, women's health, immune and respiratory diseases, tumors, vaccines, and traditional Chinese medicine [5]. - The company has successfully launched 13 new drug products, including the first domestically developed shingles vaccine approved in January 2023 and the first innovative biological drug for acute gouty arthritis approved in June 2025 [5]. - As of September 23, 2025, the company has over 40 candidate drugs in clinical stages or submitted for IND applications, including 14 in Phase III clinical trials or NDA stages, showcasing potential for global first-in-class or best-in-class drugs [6]. Group 3: Financial Performance - For the fiscal years 2022 to 2025, the company reported revenues of approximately RMB 12.63 billion, RMB 14.57 billion, RMB 13.47 billion, and RMB 6.64 billion for the first half of 2025, respectively [6][8]. - The net profit for the same periods was approximately RMB 4.22 billion, RMB 4.78 billion, RMB 2.71 billion, and RMB 0.93 billion for the first half of 2025, indicating fluctuations in profitability [6][8].

Core Viewpoint - The announcement of a 100% tariff on all branded/patented drugs by Trump starting in October is expected to have limited impact on China's innovative drug industry chain, with no excessive concerns warranted [1] Group 1: Impact on Innovative Drugs - Most Chinese innovative drugs that are currently being exported have either established production capacity in the U.S. or have outsourced production to local CMO companies [1] - The majority of domestic innovative drugs are exported using a business development (BD) model, which mitigates the impact of the tariff [1] Group 2: Impact on CXO Sector - The export products in the CXO sector primarily consist of raw materials and biological raw liquids, which are not affected by the new tariff; the proportion of finished dosage forms exported is low [1] - The investment timeline for multinational corporations (MNCs) to build factories in China will take time, leading to limited direct impact on CXO orders in the short term [1] - Long-term policy changes may influence the pace of factory construction by MNCs [1] Group 3: Upcoming Catalysts - The ESMO conference will take place in mid to late October, with a focus on companies like CanSino Biologics (09926), Kelun-Biotech (06990), and Rongchang Biologics (09995) that are expected to release significant data [1] - The results of medical insurance negotiations and the first version of the commercial insurance innovative drug directory are expected to be announced in October-November [1] Group 4: Mid to Long-term Recommendations - Recommended stocks in the innovative drug sector include 3SBio (01530) and Eucure Biopharma-B (06996), which have rich short-term catalysts and their valuations do not yet reflect the core value of major products [2] - Companies like Ascletis Pharma (02096), Hutchison China MediTech (00013), and Legend Biotech are considered undervalued with clear long-term growth logic [2] - In the CXO sector, WuXi AppTec (02268) is highlighted as a leading player benefiting from high downstream demand and improving financing conditions [2]

Group 1 - The core viewpoint is that the new 100% tariff on all branded/patented drugs announced by Trump will have limited impact on China's innovative drug industry chain, and there is no need for excessive concern [1] - For innovative drugs, most products currently being exported are either produced in the U.S. or outsourced to U.S. CMO, and most domestic innovative drugs are exported using the BD model [1] - For CXO, the main export products are raw materials and herbal extracts, which are not affected by the new tariff; the proportion of finished drug exports is low, and the investment timeline for MNC clients to build factories will take time, leading to limited short-term impact on CXO orders [1] Group 2 - Mid to long-term recommendations include innovative drugs such as 3SBio (01530) and Eucure Biopharma-B (06996), which have rich short-term catalysts and their valuations do not yet reflect the core value of major products [2] - Other recommended companies include Ascletis Pharma (02096), Hutchison China MediTech (00013), and Legend Biotech, which are considered significantly undervalued with clear long-term growth logic [2] - For CXO, companies like WuXi AppTec (02268) are expected to benefit from high downstream demand and improving financing conditions [2]

Group 1 - The "China Medical Port" core area has attracted over 1,800 enterprises, with the life and health industry scale exceeding 50 billion [1] - The area has introduced 29 innovation platforms, including institutions like the Chinese Academy of Sciences and Zhejiang University [1] - In the past three years, 90 innovative drugs have entered clinical research stages, with 34 "unicorn" companies, the highest in the city [1] Group 2 - The Qiantang District has established the first nucleic acid drug industry cluster in the province, named "Hangzhou Nucleic Acid Drug Valley" [2] - The district has been included in provincial and municipal lists for cultivating future industry pilot zones in synthetic biology [2] - A talent matrix combining strategic scientists, leading entrepreneurs, and skilled craftsmen has been created, recognized as a pilot project for integrated education and technology talent reform in Zhejiang Province [2]

Core Viewpoint - On September 24, China Pharmaceutical signed a strategic cooperation framework agreement with the Faku County government to enhance the development of the pharmaceutical and healthcare industry and support the construction of a close-knit county medical community [1] Group 1 - The agreement focuses on the development of the pharmaceutical and healthcare industry [1] - The collaboration aims to empower the construction of a close-knit county medical community [1]