Core Viewpoint - The overall sales expense ratio of Kelun Pharmaceutical has decreased due to refined management of the sales system and cost reductions from centralized procurement [1] Group 1 - The sales expense ratio experienced a slight increase in the second quarter compared to the first quarter, primarily due to high promotional costs associated with the launch of Botai's innovative drug products [1] - Excluding the impact of the new product launch, the overall sales expense ratio remains relatively stable [1]

Group 1 - The core viewpoint of the article indicates that Kelun Pharmaceutical (002422) expects a significant decline in overall performance this year compared to last year, primarily due to the impact of penicillin market prices [1] - Currently, penicillin prices have bottomed out, and with the arrival of the peak season in the fourth quarter, the company's performance is expected to improve [1] - By 2026, with the ramp-up of synthetic biology products and the recovery of penicillin prices, there is anticipated substantial improvement potential in operating performance and profits [1]

Group 1 - The company expects that over 70% of the national market will complete the volume-based procurement for infusion by the end of this year, which will help stabilize its core market [1] - The company has completed the reporting phase in the Sichuan and Guangdong alliances and has entered the pricing stage, anticipating positive outcomes [1]

Group 1 - The core viewpoint of the article indicates that the market for basic infusion products, specifically plastic bottles and closed soft bags, is in a state of full competition in non-grade hospitals, with prices having nearly bottomed out [1] - In the grade hospital market, the prices for closed basic infusion products remain stable, primarily due to the stable pricing system established by volume-based procurement [1] - The three-chamber bags for parenteral nutrition experienced a year-on-year growth of 55.6% in the first half of the year, with expectations to maintain this growth trend for the entire year [1] - The dual-chamber bags for powder and liquid saw a growth of 64% in the first half of the year, and it is anticipated that this segment will also continue to show strong growth throughout the year [1]

Core Viewpoint - Kelun Pharmaceutical (002422) announced on September 1 that the 11th round of centralized procurement involves approximately 14 products, most of which are newly approved products, resulting in minimal impact on existing products [1] Group 1: Business Performance - Over the past three years, the revenue and profit of the generic drug segment have shown stable growth, attributed to the company's position as a leading supplier in centralized procurement and the rapid market release of new products [1] - The company has consistently implemented a cost leadership strategy, leading to a year-on-year decrease in the unit production cost of generic drugs [1] Group 2: Current Challenges - In the first half of this year, the generic drug segment faced pressure mainly due to the 10th round of centralized procurement and price declines of some renewed products, while new winning products have not yet contributed to incremental growth [1] Group 3: Future Outlook - Despite the intense competition in the centralized procurement environment and limited profitability per product, the company continues to invest steadily in the research and development pipeline for generic drugs and has adjusted its R&D strategy to focus on advantageous products and pipelines, maintaining a positive outlook for the future [1]

Core Viewpoint - The company, Kelun Pharmaceutical, announced on September 1 that its research institutes will focus on different therapeutic pipelines while complying with regulatory requirements [1] Group 1: Company Focus - Kelun Pharmaceutical's drug research institute will concentrate on innovative drug development in non-infusion formulations, primarily relying on its core marketing pipeline [1] - The focus areas for the drug research institute include anesthesia analgesia, central nervous system, and anti-infection [1] - The company has laid out more than ten varieties in its current pipeline [1]

Core Viewpoint - Kelun Pharmaceutical (002422) announced on September 1 that approximately 35% of its R&D expenses are allocated to generic drugs, while around 60% is dedicated to innovative drugs, with the remainder for raw materials and other areas [1] R&D Expense Allocation - Generic drugs account for about 35% of the R&D investment [1] - Innovative drugs represent approximately 60% of the R&D investment [1] - The remaining portion is allocated to raw materials and other segments [1] Future Trends - The R&D investment in innovative drugs is expected to continue growing in line with clinical progress and product development [1] - The R&D investment in generic drugs is anticipated to remain relatively stable based on the trends observed over the past two years [1]

Core Insights - The company, Kelun Pharmaceutical, announced that AI has improved the fermentation levels in production processes, surpassing the levels achieved without AI [1] - The production line for thiocyanate erythromycin is fully integrated with the AI system, with plans to quickly incorporate AI into cephalosporin and penicillin production lines [1] - Experimental results indicate that under the same material input, the average yield of AI-controlled fermentation tanks exceeds that of the control group by approximately 3% to 5% [1] - As batch numbers increase and iteration speeds accelerate, overall fermentation levels are expected to improve further [1] - In the field of synthetic biology, AI has significantly enhanced enzyme modification efficiency and activity, greatly improving research and development efficiency [1] - The company is gradually applying AI to various research and development tools, with expectations for AI to play a larger role in the R&D phase in the future [1]

Core Viewpoint - The company is adapting to market challenges by enhancing access, business expansion, and focusing on key product layouts despite a demand decline in the infusion and generic drug sectors [1] Group 1: Business Segments - The demand for the antibiotic segment is stabilizing, with noticeable price fluctuations; however, the company maintains a significant cost advantage [1] - The synthetic biology segment is gradually ramping up production, marking this year as the sales year for synthetic biology, with sales growth expected to accumulate over time [1] - The innovative drug segment is progressing well in research and development, with a maturing commercialization system; if negotiations with medical insurance proceed smoothly, approved products are anticipated to see rapid growth next year [1] Group 2: Strategic Outlook - The company is in a year of adjustment and recovery, preparing to restore rapid growth through strategic adjustments and capacity building [1]

Core Viewpoint - In the first half of 2025, Kolun Pharmaceutical reported a significant decline in revenue and profit, primarily due to industry challenges such as decreased incidence of infectious diseases and macroeconomic factors like medical insurance cost control [1][2]. Financial Performance - Kolun Pharmaceutical achieved operating revenue of 9.08 billion yuan, a year-on-year decrease of 23.2% [1] - The net profit attributable to shareholders was 1 billion yuan, down 44.4% year-on-year [1] - The net profit after deducting non-recurring gains and losses was 985 million yuan, a decline of 43.8% [1] - The net cash flow from operating activities was 1.19 billion yuan, down 53.0% year-on-year [1] - In Q2 2025, the company reported operating revenue of 4.69 billion yuan, a decrease of 16.3% year-on-year [1] Business Challenges - The primary challenge for Kolun Pharmaceutical is the impact of centralized procurement, which has led to price pressures despite an increase in overall product sales [3] - The company's business model includes large-volume injections, non-injection generic drugs, antibiotic intermediates, synthetic biology, and innovative drugs [3] - The large-volume injection segment contributes nearly 40% of the company's revenue [4] Market Dynamics - The large-volume injection business faced a sales revenue of 3.75 billion yuan in the first half of 2025, a decline of 19.65% year-on-year [5] - The market for basic injections is highly competitive, with prices reportedly at a low point due to overcapacity and declining demand [8] - The price of closed-system infusion products remains stable in higher-tier hospitals, while the price of basic infusion products in non-tier hospitals has reached a bottom [9] Future Outlook - The new round of centralized procurement may help stabilize prices in the large-volume injection market, with over 70% of the market expected to complete price linkage by the end of the year [10] - Future growth is anticipated to rely on high-end soft bag products, although their current contribution is insufficient to offset the price decline in basic infusions [10] - The company is exploring new growth areas in the anesthetics and analgesics sector, with several new products in the pipeline [17]