Summary of Kelun Biotech Earnings Review Company Overview - **Company**: Kelun Biotech (6990.HK) - **Industry**: Biotech, specifically focused on developing and commercializing differentiated antibody drug conjugates (ADCs) for global patients [8][9] Key Financial Highlights - **1H Revenue**: Rmb950 million, with Rmb302 million from sac-TMT and Rmb628 million from licensing income, both broadly in-line with expectations [1] - **Net Loss**: Rmb-145 million, narrower than the expected Rmb-184 million, attributed to managed SG&A spending of Rmb253 million, which increased by 6% half-on-half [1] - **Cash Position**: Rmb4.5 billion in cash equivalents, up from Rmb3.1 billion by year-end 2024, sufficient to support near-term operations [1] Product Performance and Outlook - **sac-TMT**: Achieved high double-digit month-over-month growth, with NSCLC patients becoming the majority post-March approval. Management is confident in accelerated growth in the second half of the year [2][6] - **Mature Products**: Limited revenue in 1H, but expected growth post-NRDL coverage beyond 2025 [2] - **Next Potential Asset**: SKB571 (EGFR/cMET BsADC) is being positioned as the next anchor asset, with ongoing Phase 2 trials [6] Research and Development Insights - **R&D Expenses**: Decreased to Rmb612 million in 1H25, down 6% year-on-year, as more late-stage assets enter NDA or later stages [1] - **Pipeline Development**: Focus on addressing unmet medical needs with a variety of drug candidates in early-stage development [6] Valuation and Price Target - **Target Price Adjustment**: 12-month target price adjusted to HK$454.04 from HK$406.74, based on risk-adjusted DCF methodology [7] - **Earnings Per Share (EPS) Estimates**: Adjusted for 2025E-27E to reflect updated financials and lowered sales estimates for certain products [7] Risks and Challenges - **Key Risks**: Include R&D risks in developing new indications, competition in the ADC field, limited commercial manufacturing and sales track record, talent competition, and alliance risks [8][10] Conclusion - **Investment Rating**: The company is rated as a Buy, with expectations for meaningful growth driven by its product pipeline and strategic collaborations [9][11]

Group 1 - The core viewpoint of the news highlights the active performance of the weight loss concept stocks, particularly following the FDA approval of Novo Nordisk's semaglutide (Wegovy) for treating metabolic dysfunction-related fatty liver disease in patients with advanced liver fibrosis [1][2] - The Medical Innovation ETF (516820.SH) saw a 1.27% increase, with significant gains in constituent stocks such as Ganli Pharmaceutical (10.00%), Enhua Pharmaceutical (6.35%), and Huadong Medicine (5.41%) [1] - Recent fund inflows into the Medical Innovation ETF totaled 35.68 million yuan, with a net inflow of 24.91 million yuan over the last five trading days, indicating a positive trend in investor sentiment [1] Group 2 - The market is experiencing a rotation of funds from high-valued sectors to reasonably valued areas, suggesting a potential shift in the pharmaceutical market from innovative drugs to lower-valued medical devices [2] - Core assets in the medical sector are gradually rebounding, with many top constituent stocks trading below their historical 20% percentile, indicating a strong margin of safety for investors [2] - The weakening U.S. economic and employment data may accelerate the Federal Reserve's rate cuts, enhancing global liquidity and benefiting technology stocks, presenting a good opportunity for investors to position themselves in the medical innovation sector [2]

Group 1 - The core viewpoint of the article highlights the performance and holdings of the Agricultural Bank of China Healthcare Stock Fund, which has shown significant growth in recent months and years [1] - The fund's latest net value is 2.0003 yuan, reflecting a growth of 1.17% [1] - Over the past month, the fund has achieved a return of 4.93%, ranking 412 out of 1032 in its category [1] - In the last six months, the fund's return has been 50.76%, ranking 43 out of 993 [1] - Year-to-date, the fund has returned 46.69%, ranking 69 out of 983 [1] Group 2 - The top ten holdings of the Agricultural Bank of China Healthcare Stock Fund account for a total of 51.10%, with significant positions in companies such as Heng Rui Pharmaceutical (8.16%) and Zai Lab (7.99%) [1] - The fund was established on February 10, 2015, and as of June 30, 2025, it has a total size of 1.441 billion yuan [1] - The fund manager, Meng Yuan, has a master's degree and has held various positions in the financial industry, including roles at Bank of China Fund Management and Agricultural Bank of China Asset Management [1]

Financial Data and Key Metrics Changes - The company reported a revenue of RMB 950 million for the first half of 2025, with over RMB 300 million coming from commercialized drugs, marking a significant achievement in its first year of commercialization [50][51] - Gross profit was RMB 660 million, comparable to the previous year, while the net loss for the first half was RMB 145 million, with an adjusted loss of RMB 69 million after one-off budget adjustments [52][53] - The company has a healthy financial status with cash and financial assets totaling RMB 4.5 billion and debts less than RMB 1 billion [56] Business Line Data and Key Metrics Changes - The company has three main products ready for the market, with significant progress in approvals and commercialization efforts [12][28] - The commercialization team has expanded to nearly 400 personnel to support the growing number of products [12] - The company has successfully partnered with over 400 pharmacies and covered over 1,000 hospitals across China [28][32] Market Data and Key Metrics Changes - The company has achieved coverage in 30 provinces and 300 cities, with over 10,000 doctors engaged [28] - The company is actively working on gaining medical insurance coverage for its products, with seven provinces already covered under specific affordable care programs [33][34] Company Strategy and Development Direction - The company aims to advance differentiated pipelines targeting significant medical needs and optimize payload linker strategies with novel ADC designs [26] - The focus is on expanding global partnerships and enhancing drug development and commercialization capabilities [26] - The company is committed to exploring applications in non-oncology areas while maintaining a strong emphasis on oncology [19][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future income from sales revenue, anticipating continued cash flow generation from both R&D partnerships and commercialized drugs [51] - The company is preparing for a significant increase in sales volume once products are included in the medical insurance catalog [94] - Management acknowledged the importance of educating clinical experts on ADC drugs to facilitate market adoption [65] Other Important Information - The company completed a follow-on financing of USD 250 million and is now included in several global equity indexes [25] - The company has initiated multiple pivotal trials globally, including for TNBC and HR-positive breast cancer [21][22] Q&A Session Summary Question: What is the breakdown of sales revenue for breast cancer and lung cancer? - Lung cancer is the biggest contributor to sales revenue, consistent with patient numbers and indications [62] Question: What is the company's sales expenses ratio going into medical insurance coverage next year? - Sales expenses are currently high due to the first year of commercialization, but costs are expected to decrease once products are included in the medical insurance catalog [63] Question: What is the focus for R&D going into the next stage? - The focus is on developing differentiated products targeting clinical demands, with an emphasis on bispecific targets and new payload strategies [68][70] Question: Can you provide guidelines on the sales trend for Q3? - The company expects quarter-over-quarter growth, with significant sales anticipated in the second half of the year [74] Question: What is the rationale behind the clinical trial design for PD L1 positive and negative patients? - The company is focusing on both PD L1 positive and negative patients to ensure comprehensive treatment coverage [89] Question: How is the company addressing IP disputes? - The company has initiated a lawsuit against several founders related to IP disputes, which is currently under review by the Sichuan Provincial High Court [101]

Financial Data and Key Metrics Changes - The company reported a revenue of RMB 950 million for the first half of 2025, with over RMB 300 million coming from commercialized drugs, marking a significant achievement in its first year of commercialization [52][53] - Gross profit was RMB 660 million, comparable to the previous year, while the net loss for the first half was RMB 145 million, with an adjusted loss of RMB 69 million after one-off budget adjustments [54][55] - Cash and financial assets totaled RMB 4.5 billion, indicating a healthy financial status to support upcoming R&D and innovation [58] Business Line Data and Key Metrics Changes - The company has three main products ready for the market, with significant progress in approvals and commercialization efforts [15][32] - The commercialization team has expanded to nearly 400 personnel to support the increasing number of products ready for market [14] Market Data and Key Metrics Changes - The company has successfully covered over 30 provinces, 300 cities, and 1,000 hospitals across China, with partnerships established with over 400 pharmacies [32][34] - The company is actively working towards gaining medical insurance coverage for its products, which is expected to enhance market access and sales [36][81] Company Strategy and Development Direction - The company aims to advance differentiated pipelines targeting significant medical needs, optimizing payload linker strategies, and exploring applications in non-oncology areas [30] - The focus is on expanding global partnerships and strengthening strategic collaborations to maximize the value of its pipelines [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future income from sales revenue, anticipating continued cash flow generation from commercialized drugs [53] - The company is preparing for the implementation of new medical insurance policies, which are expected to impact product sales positively [100] Other Important Information - The company completed a follow-on financing of USD 250 million and is included in major global equity indexes, enhancing its market presence [29] - The company has initiated several pivotal trials globally, including for various cancer indications, which are expected to drive future growth [25][26] Q&A Session Summary Question: What is the breakdown of sales revenue for breast cancer and lung cancer? - Lung cancer is the biggest contributor to sales revenue, consistent with patient numbers and indications [64] Question: What is the focus for R&D going into the next stage? - The focus is on developing differentiated products targeting clinical demands, with an emphasis on bispecific targets and new payload strategies [70][72] Question: Can you provide guidelines on the sales trend for Q3? - The company expects quarter-over-quarter growth, with significant sales anticipated from lung cancer indications [76] Question: What is the strategy for going into the medical insurance catalog? - The strategy prioritizes entering the medical insurance catalog to enhance market access and sales volume [100] Question: Can you address the IP disputes mentioned? - The company has initiated a lawsuit against several founders related to IP disputes, which is currently under review by the Sichuan Provincial High Court [103]

2025 INTERIM RESULTS PRESENTATION 2025中期业绩演示材料 AUGUST 2025 2025年8月 1 DISCLAIMER 免责声明 The information contained in this presentation is intended solely for your personal reference. Such information is subject to change without notice and no representation or warranty express or implied is made as to, and no reliance, should be placed on, the fairness, accuracy, completeness or correctness of the information contained in this presentation. This presentation does not intend to provide, and you may not rely on ...

Core Insights - The core viewpoint of the news is the performance and holdings of the E Fund Healthcare Industry Mixed A Fund, highlighting its recent returns and key stock positions [1]. Fund Performance - The latest net value of E Fund Healthcare Industry Mixed A is 4.7830 yuan [1]. - The fund has achieved a weekly return of 3.57% [1]. - Over the past three months, the fund's return is 44.07% [1]. - Year-to-date, the fund has generated a return of 57.03% [1]. Fund Details - E Fund Healthcare Industry Mixed A was established on January 28, 2011 [1]. - As of June 30, 2025, the fund's total assets amount to 3.944 billion yuan [1]. - The fund is managed by Yang Zhenshao [1]. Top Holdings - The top ten stock holdings of the fund include: - Heng Rui Medicine - Hotgen Biotech - Xinlitai - BeiGene-U - Haizhi Science - Nocren Health-U - Yipinhong - Kelun Pharmaceutical - Shutaishen - Baili Tianheng [1]. - The combined proportion of the top ten holdings is 58.14% [1].

Core Insights - The core viewpoint of the news is the performance and holdings of the Agricultural Bank of China Healthcare Stock Fund, which has shown significant growth in recent months and has a diversified portfolio in the healthcare sector [1]. Fund Performance - The latest net value of the Agricultural Bank of China Healthcare Stock Fund is 1.9772 yuan, reflecting a growth of 1.81% [1]. - The fund's return over the past month is 9.64%, ranking 129 out of 328 in its category [1]. - Over the last six months, the fund has achieved a return of 47.35%, ranking 12 out of 316 [1]. - Year-to-date, the fund has a return of 45.00%, ranking 18 out of 316 [1]. Fund Holdings - The top ten holdings of the Agricultural Bank of China Healthcare Stock Fund account for a total of 51.10% of the portfolio, with the following key positions: - Heng Rui Medicine: 8.16% - Zai Lab: 7.99% - Xin Li Tai: 5.84% - Rejig Bio: 5.63% - Kelun Pharmaceutical: 5.02% - HAO OBO: 4.36% - BeiGene: 3.61% - Yifang Bio: 3.58% - Aosaikang: 3.52% - Bid Pharma: 3.39% [1]. Fund Background - The Agricultural Bank of China Healthcare Stock Fund was established on February 10, 2015, and as of June 30, 2025, it has a total scale of 1.441 billion yuan [1]. - The fund manager is Meng Yuan, who has a master's degree and has held various positions in the fund management industry, including roles at Bank of China Fund Management and Agricultural Bank of China Asset Management [1].

Summary of Key Points from the Conference Call on China Healthcare Industry Overview - The conference focused on the **China Healthcare** sector, particularly the pharmaceutical and biotech industries, highlighting the attractive investment landscape in the Asia Pacific region [2][5][6]. Core Insights and Arguments - **Growth Projections**: The global pharmaceutical market is expected to grow at a **CAGR of 5.7%** from 2023 to 2028, while the Chinese pharmaceutical market is projected to grow at a **CAGR of 7.7%** during the same period [9][12]. - **Market Dynamics**: The Chinese pharmaceutical market is characterized by a significant reliance on imported products, particularly in the albumin segment, where **60-70%** of the market is composed of imports [34]. - **Out-licensing Trends**: There has been a notable increase in out-licensing activities, with over **$50 billion** in deals recorded in 2024, driven by narrowing innovation gaps and emerging complex modalities [41][42]. - **Regulatory Environment**: The plasma industry in China faces high entry barriers, with only **<30 plasma fractionators** currently operating, leading to a market consolidation trend [33][34]. Important Developments - **Upcoming Events**: Key sector events include the **CSCO 2025** and **WCLC 2025** conferences, which are expected to influence stock performance in the pharmaceutical and biotech sectors [6][8]. - **Pipeline Assets**: Several companies, including Hengrui and CSPC, have significant pipeline assets with upcoming drug approvals and trial progress expected in **2H25** [32][27]. Potential Risks and Challenges - **Supply Constraints**: The Chinese plasma market is underdeveloped compared to global standards, with a limited variety of plasma derivatives available [34]. - **Market Competition**: The top five plasma companies dominate approximately **60%** of the market, indicating a highly consolidated competitive landscape [33]. Additional Insights - **Investment Sentiment**: The overall sentiment towards the China healthcare sector remains positive, with analysts highlighting the potential for significant returns driven by innovation and market expansion [2][41]. - **Technological Advancements**: The introduction of recombinant human albumin (rHSA) is expected to disrupt the albumin market, potentially capturing **~10%** of the total market share [35]. This summary encapsulates the key points discussed during the conference call, providing a comprehensive overview of the current state and future outlook of the China healthcare sector.

Core Insights - The core viewpoint of the news is the performance and holdings of the Agricultural Bank of China Healthcare Stock Fund, which has shown significant growth in recent months and has a diversified portfolio in the healthcare sector [1]. Fund Performance - The latest net value of the Agricultural Bank of China Healthcare Stock Fund is 1.9462 yuan, reflecting a growth of 2.54% [1]. - The fund's return over the past month is 11.14%, ranking 101 out of 333 in its category [1]. - Over the last six months, the fund has achieved a return of 46.50%, ranking 10 out of 327 [1]. - Year-to-date, the fund has returned 42.73%, ranking 18 out of 327 [1]. Fund Holdings - The top ten holdings of the Agricultural Bank of China Healthcare Stock Fund account for a total of 51.10% of the portfolio, with the following key positions: - Heng Rui Medicine: 8.16% - Zai Lab: 7.99% - Xin Li Tai: 5.84% - Hotgen Biotech: 5.63% - Kelun Pharmaceutical: 5.02% - HAOYOBIO: 4.36% - BeiGene: 3.61% - Eucure Biopharma: 3.58% - Aosaikang: 3.52% - Bide Pharmaceutical: 3.39% [1]. Fund Background - The Agricultural Bank of China Healthcare Stock Fund was established on February 10, 2015, and as of June 30, 2025, it has a total scale of 1.441 billion yuan [1]. - The fund manager is Meng Yuan, who has a master's degree and has held various positions in the financial industry, including roles at Bank of China Fund Management and Agricultural Bank of China Asset Management [1].