Core Viewpoint - Minsheng Securities has issued a recommendation rating for Jiuzhou Pharmaceutical (603456.SH) based on several positive indicators regarding its business performance and growth potential [1] Group 1: Revenue Structure - The revenue structure shows steady growth in the CDMO (Contract Development and Manufacturing Organization) business, while the specialty API (Active Pharmaceutical Ingredient) segment has experienced a year-on-year decline [1] Group 2: CDMO Funnel Data - The project funnel size for the CDMO business continues to expand, with a steady increase in the number of commercialized projects [1] Group 3: Emerging Technology Platforms - Significant progress has been made in establishing new technology platforms, with rapid growth in overseas orders for the TIDES (Therapeutics, Immunology, Drug Delivery, and Engineering Solutions) business [1]

Group 1: Target Price Increases - The companies with the highest target price increases on August 6 include Jiuzhou Pharmaceutical, BYD, and Phoenix Media, with target price increases of 57.75%, 51.41%, and 36.49% respectively, belonging to the healthcare, automotive, and publishing industries [1][2]. - Jiuzhou Pharmaceutical received a target price of 29.12 yuan, while BYD's target price is set at 158.00 yuan, and Phoenix Media's target price is 15.00 yuan [2]. Group 2: Broker Recommendations - A total of 27 listed companies received broker recommendations on August 6, with Zhongchong Co. receiving the most recommendations at 6, followed by Haiguang Information with 4, and Jiuzhou Pharmaceutical with 2 [3]. - The companies with multiple broker recommendations include Jiuzhou Pharmaceutical, Haiguang Information, and Zhongchong Co., indicating strong interest from analysts [3]. Group 3: First Coverage Ratings - On August 6, brokers provided 7 instances of first coverage, with Changhong Huayi receiving a "Buy" rating from Shanxi Securities, and Haitong Development receiving a "Buy" rating from Jiangsu Securities [4]. - Other companies receiving first coverage include Pudong Development Bank, Huaxin Cement, and Hisense Home Appliances, all rated as "Buy" or "Recommended" by various securities firms [4].

Group 1: Target Price Increases - The companies with the highest target price increases on August 6 include Jiuzhou Pharmaceutical, BYD, and Phoenix Media, with target price increases of 57.75%, 51.41%, and 36.49% respectively, belonging to the healthcare, automotive, and publishing industries [1][2] - Jiuzhou Pharmaceutical received a target price of 29.12 yuan, while BYD's target price is set at 158.00 yuan, and Phoenix Media's target price is 15.00 yuan [2] Group 2: Broker Recommendations - A total of 27 listed companies received broker recommendations on August 6, with Zhongchong Co. receiving the most recommendations at 6, followed by Haiguang Information with 4, and Jiuzhou Pharmaceutical with 2 [1][3] - Zhongchong Co. closed at 57.44 yuan, while Haiguang Information closed at 137.34 yuan, and Jiuzhou Pharmaceutical closed at 18.46 yuan [3] Group 3: First Coverage Ratings - On August 6, brokers provided 7 instances of first coverage, with Changhong Huayi receiving a "Buy" rating from Shanxi Securities, and Haitong Development receiving a "Buy" rating from Jiangsu Securities [4] - Other companies receiving first coverage include Pudong Development Bank, Huaxin Cement, and Hisense Home Appliances, all receiving "Buy" or "Recommended" ratings from various brokers [4]

Group 1 - The core viewpoint of the report is a recommendation for Jiuzhou Pharmaceutical (603456.SH) with a latest price of 18.46 yuan, highlighting its growth potential in the CDMO business and emerging technologies [2] - The revenue structure shows steady growth in the CDMO business, while the specialty API segment has experienced a year-on-year decline [2] - The project funnel for CDMO continues to expand, with a steady increase in the number of commercialized projects [2] - The establishment of new technology platforms has shown significant results, with rapid growth in overseas orders for TIDES business [2]

Financial Performance - The company's operating revenue for the first half of 2025 was 2.87 billion yuan, representing a year-on-year increase of 3.9% [2] - The net profit attributable to shareholders was 525.83 million yuan, up 10.7% year-on-year [2] - The net profit after deducting non-recurring gains and losses was 525.85 million yuan, reflecting a 12.4% increase compared to the previous year [2] - The basic earnings per share (EPS) was 0.59 yuan, an increase of 11.32% year-on-year [2] Profitability Metrics - The gross profit margin for the second quarter of 2025 was 37.45%, which is an increase of 0.03 percentage points from the previous quarter and up 2.24 percentage points from the same period last year [2] Cash Flow - The net operating cash flow for the first half of 2025 was 845 million yuan, showing a significant year-on-year growth of 164.5% [2] Historical Performance - The company's projected operating revenues for 2022, 2023, and 2024 are 5.445 billion yuan, 5.523 billion yuan, and 5.161 billion yuan, with year-on-year growth rates of 34.01%, 1.44%, and -6.57% respectively [5] - The net profit attributable to shareholders for the same years is projected to be 921 million yuan, 1.033 billion yuan, and 606 million yuan, with year-on-year growth rates of 45.28%, 12.17%, and -41.34% respectively [5] Company Overview - The company, established on July 13, 1998, specializes in providing one-stop pharmaceutical custom research and development (CDMO) services for global pharmaceutical companies, biotechnology firms, and research institutions [5] - The registered capital of the company is approximately 889.45 million yuan [5] Leadership - The chairman of the company, Hua Lirong, has a master's degree and is a senior economist [4] - In 2022, Hua Lirong was ranked 236th on the "New Fortune 500 Rich List" with a wealth of 20.02 billion yuan, making her the richest woman in Taizhou, Zhejiang [4]

Core Insights - Zhejiang Jiuzhou Pharmaceutical Co., Ltd. reported a revenue of 2.871 billion yuan for the first half of 2025, a year-on-year increase of 3.86%, and a net profit attributable to shareholders of 650 million yuan, up 17.2% year-on-year [1] Group 1: CDMO Business Performance - The CDMO (Contract Development and Manufacturing Organization) business remains the core segment of the company, showing steady growth with a rich project pipeline [1] - As of June 30, the company has undertaken 38 marketed projects, 90 Phase III clinical projects, and 1,086 Phase I and II clinical trials, indicating a robust clinical project structure [1] - The number of new drug application (NDA) submissions is rapidly increasing, laying a foundation for future performance growth [1] Group 2: Technological Advancements - The company is enhancing its technological platforms, including chiral catalysis and continuous flow reactions, to accelerate high-value service offerings [2] - Over 20 new clients have been introduced in the peptide and conjugate drug segment, with a focus on diabetes and cancer treatment areas, and overseas orders are growing rapidly [2] - The company has completed over ten projects in the first half of the year, receiving high praise from clients [2] Group 3: Global Expansion and Production Capacity - Jiuzhou Pharmaceutical is advancing its global layout, with the Taizhou base obtaining a drug production license and the expansion of the peptide GMP production line expected to be completed by the end of 2025 [2] - The company is enhancing its production line efficiency through automation and multifunctional upgrades, which supports global business development [2] - Successful project transfers from Japan and Germany to domestic factories indicate initial success in cross-regional collaboration [2] Group 4: Product Diversification and Competitive Edge - The company is expanding its product coverage in specialty APIs (Active Pharmaceutical Ingredients), focusing on diabetes, anti-inflammatory, anti-infection, and cardiovascular drugs [3] - By applying green processes such as enzyme catalysis and continuous production, the company aims to improve quality and cost control [3] - Future competitive advantages may arise from the application of AI in drug development, optimizing global capacity layout, and diversifying the client structure to increase the proportion of high-value projects [3]

Summary of Jiuzhou Pharmaceutical Conference Call Company Overview - **Company**: Jiuzhou Pharmaceutical - **Industry**: Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Key Points CDMO Business Growth - Jiuzhou Pharmaceutical's CDMO business is experiencing steady growth with a rich project pipeline, including 38 projects that have been launched and 90 in Phase III clinical trials, along with over 1,000 projects in Phase I and II [2][4][5] - The company serves over 80 global clients, covering more than 100 active projects, including innovative drugs, generics, and high-barrier formulations [2][4] Emerging Business Segments - Rapid growth in emerging businesses such as peptides and pentavalent vaccines, with over 20 new clients acquired, and orders nearing $10 million [2][6] - Successful delivery of over ten projects in these segments, indicating significant future growth potential [2][6] Generic Drug Business - Steady progress in the generic drug sector, with two specialty raw materials and two generic formulations approved in the first half of the year [2][7] - A total of 22 projects in the generic pipeline, with 8 approved and 9 under review [2][7] Financial Performance - For the first half of 2025, Jiuzhou Pharmaceutical reported revenue of 2.87 billion yuan, a year-on-year increase of 3.86%, and a net profit of 526 million yuan, up 10.7% [3] - The company has strengthened relationships with major clients, particularly in the Japanese and Korean markets, leading to significant project growth [3] Capacity Utilization and Profit Margins - CDMO capacity utilization is steadily increasing, with optimistic gross margin expectations for the next two to three years due to process optimization and a higher proportion of high-value products [2][10] - The gross margin for the first half of 2025 was approximately 41%, with expectations for stability throughout the year [12] New Factory Developments - The new factory in Taizhou has completed validation for five CDM raw material projects and is attracting numerous follow-up projects due to high management standards and successful FDA inspections [2][13] - The factory's capacity utilization is expected to continue increasing in the coming years [13] Market Trends and Client Structure - The client structure remains predominantly large pharmaceutical companies, accounting for 70-75% of business, with significant growth in the U.S. market [14][15] - The company anticipates an increase in collaboration with large pharmaceutical firms, driven by successful partnerships and potential acquisitions of biotech clients [15] Future Plans and Capital Expenditure - Jiuzhou Pharmaceutical plans to enhance global R&D capabilities and expand advanced production capacity, with a multi-functional GMP production line expected to be operational by late 2025 [9][21] - The company has approximately 3 billion yuan in cash reserves for strategic investments and acquisitions [21] International Expansion - The company has made significant inroads into the Japanese market, becoming a supplier for over half of the top ten pharmaceutical companies in Japan, with a growth rate of 30-40% annually [22] - Plans for further expansion into Europe and the U.S. are underway, focusing on small molecule production lines [17] New Product Development - Jiuzhou Pharmaceutical is focusing on new business areas such as small nucleic acids and ADCs, with expectations for significant contributions in the next two to three years [23][24][26] - The company is also expanding its peptide production capacity to meet growing demand, with a new facility set to produce 800 kg annually [25] Overall Confidence - The company expresses strong confidence in continued growth across all business segments, particularly in overseas client expansion and recovery in industry cycles [31]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 29.12 [1][7]. Core Views - The company has shown a positive growth trajectory in its revenue and profit, with a notable increase in the contribution from high-margin CDMO business [2][3]. - The company’s CDMO business achieved revenue of RMB 22.91 billion in the first half of 2025, reflecting a year-on-year growth of 16% [3]. - The company is expanding its new business capabilities, with significant progress in peptide and conjugated drug production, as well as small nucleic acid projects [4]. Summary by Sections Financial Performance - In the first half of 2025, the company reported revenue of RMB 28.71 billion, a year-on-year increase of 4%, and a net profit attributable to the parent company of RMB 5.26 billion, up 11% year-on-year [1]. - The second quarter of 2025 saw revenue of RMB 13.81 billion, with net profit increasing by 16% year-on-year [1]. CDMO Business - The CDMO business is a key growth driver, with a revenue contribution increasing from 71% in 2024 to 80% in the first half of 2025, leading to an improvement in gross margin from 35% to 37% [2]. - The company has a robust project pipeline, with 1,086 projects in clinical phases and 38 in commercialization as of the first half of 2025 [3]. New Business Development - The company has made strides in building capabilities for new business areas, including the expansion of facilities for peptide and conjugated drugs, and has onboarded over 20 new clients in the first half of 2025 [4]. Profit Forecast and Valuation - The forecast for net profit attributable to the parent company for 2025-2027 is RMB 9.14 billion, RMB 9.52 billion, and RMB 9.74 billion respectively, with corresponding EPS of RMB 1.03, RMB 1.07, and RMB 1.09 [5][10]. - The company is valued at RMB 259 billion using the SOTP method, with a target price of RMB 29.12 based on a total share count of 889 million [5][12].

Core Viewpoint - The company reported strong performance in 1H25, with revenue and net profit exceeding expectations due to recovery in core CDMO demand and stabilization of raw material prices [1][4]. Financial Performance - In 1H25, the company achieved revenue of 2.871 billion yuan, a year-on-year increase of 3.9%, and a net profit attributable to shareholders of 526 million yuan, up 10.7% year-on-year [1]. - For Q2 alone, revenue was 1.381 billion yuan, reflecting a year-on-year increase of 7.2% but a quarter-on-quarter decrease of 7.4; net profit for the quarter was 276 million yuan, up 15.7% year-on-year and 10.2% quarter-on-quarter [1]. Business Segments - The core CDMO business showed robust growth, generating revenue of 2.29 billion yuan in 1H25, a year-on-year increase of 16.3%, with a gross margin of 41.0% [2]. - The company has a healthy project pipeline, with 38 projects already on the market and 1,086 projects in various clinical phases [2]. - The raw material business generated revenue of 523 million yuan in 1H25, a year-on-year decline of 28.48%, but with a gross margin of 23.26%, which is an increase of 2.07 percentage points [3]. Strategic Developments - The company is actively building capabilities in peptide, conjugate, and small nucleic acid drug technologies, having onboarded over 20 new clients and completed more than 10 projects in 1H25 [2]. - The integration strategy of "raw materials + formulations" is ongoing, with 22 formulation projects, 8 of which have been approved and 9 submitted for approval as of 1H25 [3]. Profit Forecast and Valuation - Due to the recovery in CDMO demand and stabilization of raw material prices, the company has raised its net profit forecasts for 2025 and 2026 by 14.5% and 8.7% to 950 million yuan and 1.084 billion yuan, respectively [4]. - The target price has been increased by 43.6% to 22.40 yuan, corresponding to 21.0 times the 2025 P/E ratio and 18.4 times the 2026 P/E ratio, indicating a potential upside of 20.0% from the current stock price [4].

（企业公告） 公告介绍，公司CDMO项目管线日益丰富，已经形成了可持续的临床前/临床Ⅰ、II、III期的漏斗型项目 结构。截止报告期末，公司已承接的项目中，已上市项目38个，III期临床项目90个，Ⅰ期和II 期临床试 验的有1086个，项目涵盖抗肿瘤、抗心衰、抗病毒、中枢神经和心脑血管等治疗领域。已递交NDA的 新药项目数快速增加，将持续助推公司业务稳健增长。 在多肽和偶联业务方面，报告期内，引入新客户20多家，在手订单的项目主要涵盖降糖、癌症类治疗领 域，其中海外订单增速较快。公司已完成十多个项目的交付工作，获得客户的高度评价。随着多肽及偶 联药物全球市场的快速发展，未来项目承接数量将持续增加。 近日，九洲药业发布2025年半年报。披露上半年营收增长3.86%至28.71亿元，归属净利提高10.70%至 5.26亿元。 ...