Summary of Lepu's 3Q25 Earnings Call Company Overview - **Company**: Lepu (300003.SZ) - **Industry**: Medical devices and pharmaceuticals in China Key Financial Results - **Revenue**: Rmb1,569 million, up 12% year-over-year, but missed Goldman Sachs estimates (GSe) of Rmb1,937 million due to softer pharmaceutical sales growth of 53% year-over-year compared to GSe's expectation of 70% [1][9] - **Net Profit**: Rmb291 million, up 176% year-over-year, in line with GSe's estimate of Rmb277 million [1][9] - **Selling Expense Ratio**: 17.3%, lower than GSe's estimate of 21.6% [1][9] Business Segments - **Medical Aesthetics**: Generated Rmb86 million in revenue from just two months of sales since August, with management reaffirming a full-year guidance of Rmb300 million for this segment [1][9] - **Future Projections**: Expected revenue from medical aesthetics to reach Rmb1 billion by 2026 [1][9] Product Development and Pipeline - **PDRN Product and Thermage**: Anticipated approval in Q1/Q2 of the following year [1][9] - **Innovative Drug Pipeline**: Two new assets added, with existing assets progressing as planned [1][9] Forecast Revisions - **Short-term Revenue Forecast**: Slightly lowered to reflect 3Q25 results [1][9] - **Long-term Revenue and Net Profit Forecast**: Increased due to optimistic R&D progress in innovative drugs [1][9] - **Updated Price Target**: Raised to Rmb19 from Rmb18, maintaining a Buy rating [1][9] Investment Thesis - **Market Position**: Lepu is positioned as a cardiovascular disease treatment and diagnostics solution provider, expanding into consumer medical products [1][9] - **Concerns**: Investors are wary due to the impact of the volume-based procurement (VBP) policy and anti-corruption campaigns affecting revenue growth [1][9] - **Long-term Growth Potential**: Innovative products and the medical aesthetic business are expected to offset revenue losses from VBP, providing long-term growth momentum [1][9] Key Catalysts 1. Successful launch of innovative products in 2025 2. Rapid ramp-up of pulsed sonic balloons and degradable PFO occluders, and TAVR [1][9] Risks - **Price Cuts**: Potential price reductions for innovative medical devices due to VBP [1][10] - **R&D Progress**: Risks associated with slower-than-expected R&D progress [1][10] - **Goodwill Impairment**: Possible losses from lower-than-expected earnings from subsidiaries [1][10]

Core Insights - The internet healthcare sector experienced a slight increase of 0.43% on October 27, with Haixia Innovation leading the gains [1] - The Shanghai Composite Index closed at 3996.94, up 1.18%, while the Shenzhen Component Index closed at 13489.4, up 1.51% [1] Stock Performance Summary - Haixia Innovation (300300) saw a significant rise of 20.06%, closing at 7.66 with a trading volume of 1.7959 million shares and a transaction value of 1.292 billion [1] - Other notable gainers included: - Furuide (300049) up 5.05% to 70.77 with a transaction value of 766 million [1] - Xingqi Eye Medicine (300573) up 4.78% to 77.83 with a transaction value of 1.493 billion [1] - Conversely, several stocks in the sector experienced declines, such as: - Wandong Medical (600055) down 3.66% to 16.33 with a transaction value of 232 million [2] - Yuyue Medical (002223) down 3.53% to 35.80 with a transaction value of 1.218 billion [2] Capital Flow Analysis - The internet healthcare sector saw a net outflow of 47.5781 million from institutional investors, while retail investors contributed a net inflow of 252 million [2][3] - Specific stock capital flows included: - Haixia Innovation had a net inflow of 16.6 million from institutional investors but a net outflow of 10.3 million from speculative funds [3] - Furuide experienced a net inflow of 14.7 million from institutional investors but a significant outflow from retail investors totaling 108 million [3]

Investment Rating - The report maintains an "Overweight" rating for several pharmaceutical companies including Jiangsu Heng Rui Medicine, Hansoh Pharmaceutical Group, 3SBio, and Jiangsu Nhwa Pharmaceutical, with related targets such as CSPC Innovation Pharmaceutical [6][28]. Core Insights - The innovative drug sector is experiencing high prosperity, and the report continues to recommend innovative drugs and their industry chain. It highlights the recent global strategic collaboration between Innovent Biologics and Takeda, which is expected to catalyze the innovative drug market [6][29]. - The report notes that the A-Shares pharmaceutical sector underperformed the market in the fourth week of October 2025, with the SW Pharmaceutical and Biological index rising only 0.6% compared to a 2.9% increase in the SHCOMP [8][30]. - In the same period, the Hong Kong pharmaceutical sector also underperformed, while the U.S. pharmaceutical sector performed in line with the market [31][19]. Summary by Sections Continuous Recommendation of Innovative Drugs and Industry Chain - The report emphasizes the ongoing recommendation of innovative drugs and the industry chain, maintaining "Overweight" ratings for various companies including Heng Rui Medicine, Hansoh Pharmaceutical, 3SBio, and Nhwa Pharmaceutical. It also recommends Biopharma/Biotech companies with innovative pipelines and increasing performance, maintaining "Overweight" ratings for Innovent Biologics, Xiamen Amoytop Biotech, and others [6][28]. Performance of A-Shares Pharmaceutical Sector - In the fourth week of October 2025, the A-Shares pharmaceutical sector's performance was weaker than the overall market, with a 0.6% increase compared to the SHCOMP's 2.9% rise. The medical service, pharmaceutical commerce, and medical equipment sub-sectors showed relatively better performance [8][30]. Performance of Hong Kong and U.S. Pharmaceutical Sectors - The Hong Kong pharmaceutical sector underperformed the market with a decline of 0.8%, while the U.S. pharmaceutical sector matched the market performance with a 1.9% increase. Notable stock movements included significant gains for companies like WuXi AppTec and declines for Alphamab Oncology in Hong Kong [31][19].

Core Viewpoint - Lepu Medical's aesthetic medicine business is rapidly developing, with significant revenue generation from its "童颜针" product since its launch in early August [1] Group 1: Business Performance - The "童颜针" product has generated approximately 100 million yuan in revenue since its launch, exceeding the company's expectations [1] - The product is now available in over 80% of large chain aesthetic medical institutions and around 1,500 to 2,000 small and medium-sized aesthetic medical institutions [1] Group 2: Product Features - The 220mg "童颜针" is well-received among consumers due to its excellent biocompatibility and low adverse reaction rate [1] Group 3: Future Plans - The company plans to promote the product through partnerships with platforms like Meituan and intends to launch a shareholder discount program for light aesthetic services [1] - The revenue target for the aesthetic medicine segment is set at 1 billion yuan by 2026 [1]

Core Insights - The company has reported rapid growth in its medical aesthetics business, with revenue from its "童颜针" product reaching approximately 1 billion yuan since its launch in early August, exceeding expectations [1] - The product has been adopted by over 80% of large chain medical aesthetic institutions and around 1,500 to 2,000 small to medium-sized medical aesthetic institutions [1] - The company aims to achieve a revenue target of 1 billion yuan for its medical aesthetics segment by 2026 [1] Business Development - The "童颜针" product is noted for its excellent biocompatibility and low adverse reaction rate, receiving positive feedback from consumers [1] - Future promotional efforts will include partnerships with platforms like Meituan and the introduction of shareholder discounts for light medical aesthetic services [1]

截至发稿，陈柯含累计任职时间96天，现任基金资产总规模11.32亿元，任职期间最佳基金回报3.64%， 任职期间最差基金回报-9.05%。 风险提示：市场有风险，投资需谨慎。本文为AI大模型自动发布，任何在本文出现的信息（包括但不 限于个股、评论、预测、图表、指标、理论、任何形式的表述等）均只作为参考，不构成个人投资建 议。 数据显示，华泰柏瑞基金旗下1只基金重仓乐普医疗。保健ETF（516790）二季度持有股数19.37万股， 占基金净值比例为2.38%，位居第八大重仓股。根据测算，今日浮盈赚取约21.11万元。 保健ETF（516790）成立日期2021年8月12日，最新规模1.12亿。今年以来收益10.2%，同类排名 3593/4218；近一年收益5.16%，同类排名3632/3876；成立以来亏损37.67%。 保健ETF（516790）基金经理为陈柯含。 10月27日，乐普医疗涨6.37%，截至发稿，报18.21元/股，成交1.36亿元，换手率0.47%，总市值342.46 亿元。 资料显示，乐普(北京)医疗器械股份有限公司位于北京市昌平区超前路37号，成立日期1999年6月11 日，上市日期200 ...

Core Viewpoint - Lepu Medical (300003) is expected to receive approval for its Deep Brain Stimulation (DBS) device soon, which is anticipated to contribute to revenue next year. The company is also preparing to submit its Cardiac Contractility Modulation (CCM) device for approval in the first and second quarters of next year, indicating that the neuroregulation business segment will provide new growth drivers for the company's performance [1] Group 1 - The DBS device is expected to be approved for market launch shortly [1] - The CCM device is planned for submission in the first and second quarters of next year [1] - The neuroregulation business segment is projected to enhance the company's performance growth [1] Group 2 - The company is focusing on developing implantable medical devices with higher technological barriers and better market competition in response to the centralized procurement environment [1] - This strategy aims to mitigate the impact of centralized procurement policies on the company's business [1]

Financial Performance - The company aims for a revenue growth of approximately 10% in the upcoming year [2] - In Q3, the company achieved an operating cash flow of CNY 1.013 billion, with an expectation of reaching around CNY 14-15 billion for the entire year [2] - The cardiovascular interventional devices segment is preparing for centralized procurement, which may lead to a slight revenue contraction [2] Medical Aesthetics Business - The medical aesthetics segment has seen significant growth, with the "童颜针" (Youth Needle) generating around CNY 100 million in revenue since its launch in early August [3] - The company targets CNY 1 billion in revenue for the medical aesthetics segment next year, with specific sales goals of CNY 600 million for "童颜针" and CNY 200 million each for PDRN and Thermage [3] - The company has entered over 80% of large brand chain medical aesthetic institutions and around 1,500-2,000 small to medium-sized institutions [3][6] Innovative Drug Development - The company is advancing its innovative drug pipeline, focusing on dual-target or multi-target SiRNA drugs, with MWN109 entering Phase III clinical trials next year [4] - The oral MWN109 tablet is nearing completion of Phase I clinical trials, with plans for Phase II trials before the Spring Festival [4] - The company is also developing a biodegradable embolization device, which has shown promising clinical feedback [11] Market Strategy and Challenges - The company is actively managing distributor inventory levels to prepare for centralized procurement, aiming to maintain inventory at a 1-3 month level [9] - The medical aesthetics market is competitive, with the company facing pricing pressures from platforms like New Oxygen, but it plans to maintain its pricing strategy [10] - The company is exploring partnerships with local medical aesthetic institutions to enhance shareholder services and expand its market presence [4][6] Future Outlook - The company anticipates that the interventional cardiology segment's performance will stabilize post-centralized procurement, with minimal long-term impact expected [3] - The innovative medical devices segment, including brain-machine interfaces, is expected to contribute to revenue growth in the coming years [5] - The company is committed to developing high-barrier products in response to centralized procurement policies, ensuring sustainable growth [4]

Summary of the Conference Call for Lepu Medical Company Overview - **Company**: Lepu Medical - **Industry**: Medical Devices and Pharmaceuticals Key Points and Arguments Traditional Business Performance - Lepu Medical's traditional business remains stable, with cardiovascular devices and generic drugs showing steady performance. The expected profit for the basic business in 2025 is projected to reach between 1 billion to 1.2 billion CNY [2][4][5] - Operating cash flow has significantly improved, reaching 1 billion CNY in the first three quarters, with an annual forecast of 1.5 billion CNY [2][4] Aesthetic Medicine Segment - The aesthetic medicine segment has emerged as a new growth driver, with the "童颜针" (Youthful Needle) achieving nearly 100 million CNY in sales and entering 1,500 to 2,000 institutions [2][5][7] - New products like "热玛吉" (Thermage) and PDRN are expected to launch in the first half of next year, potentially boosting revenue further [2][5][7] Impact of Procurement Policies - The centralized procurement policy has put pressure on cardiovascular devices, but the company is managing dealer inventory and actively participating in procurement to mitigate impacts [2][6] - The coronary cutting balloon may face losses, but the auxiliary balloon is expected to compensate for this, maintaining overall balance [2][6] Market Expansion Strategy - Lepu Medical is aggressively expanding its aesthetic market using a "rural encircling cities" strategy, currently covering 80% of the targeted institutions and planning further expansion through partnerships with platforms like Meituan [2][7][19] Innovation in Drug Development - Significant progress has been made in innovative drug development, with drug 109 completing phase II clinical trials and plans to enter phase III next year. Multiple projects for weight loss, lipid reduction, and blood pressure management are also underway [2][10][11] Financial Performance - In Q3 2025, Lepu Medical reported a nearly 12% year-on-year revenue growth and a 176% increase in net profit, reaching 290 million CNY. Cumulative net profit for the first three quarters was 980 million CNY, slightly exceeding market expectations [3][4] Future Outlook - The company maintains a profit forecast of 1 billion to 1.1 billion CNY for 2025 and anticipates a stable business level in Q4 [4][5] - The aesthetic medicine sector is expected to generate close to 1 billion CNY in sales in 2026, with significant contributions from various products [9][21] Challenges and Opportunities - The aesthetic medicine sector faces challenges due to differing consumer logic and quality demands compared to traditional medical services. However, this also presents opportunities for providing scientifically reliable and easy-to-use products [23][20] Inventory Management - Lepu Medical is actively controlling dealer inventory to minimize stock levels in response to procurement policies, aiming to maintain inventory at one to two months' worth [24][25] Pricing Strategy - Despite recent price reductions by internet platforms, Lepu Medical is committed to maintaining its pricing strategy, offering a multi-tiered pricing approach to cater to different consumer segments [25][26] New Product Development - The company is advancing in the peripheral treatment field with new products like biodegradable occluders, which have shown promising clinical feedback [26][27] Management and Team Stability - The innovative drug team is stable and motivated, with regular clinical meetings and recruitment efforts to strengthen clinical operations [28][29] Conclusion - Lepu Medical is positioned for growth through its stable traditional business, expanding aesthetic medicine segment, and ongoing innovation in drug development, while effectively managing challenges posed by procurement policies and market dynamics. The company’s strategic focus on quality and market expansion is expected to drive future success.

Core Viewpoint - Lepu Medical reported a revenue of 4.939 billion yuan for the first three quarters of 2025, reflecting a year-on-year growth of 3.20% [1] - The net profit attributable to shareholders reached 982 million yuan, marking a year-on-year increase of 22.35% [1] - The net profit attributable to shareholders after deducting non-recurring gains and losses was 941 million yuan, showing a year-on-year growth of 28.18% [1] - The basic earnings per share stood at 0.5327 yuan [1] Financial Performance - Revenue for the first three quarters: 4.939 billion yuan, up 3.20% year-on-year [1] - Net profit attributable to shareholders: 982 million yuan, up 22.35% year-on-year [1] - Net profit after deducting non-recurring gains: 941 million yuan, up 28.18% year-on-year [1] - Basic earnings per share: 0.5327 yuan [1]