Core Viewpoint - Credit Suisse has raised its revenue growth guidance for Kanglong Chemical (300759) from a year-on-year increase of 10%-15% to 12%-16%, expecting adjusted net profit to achieve double-digit growth [1] Group 1 - The increase in guidance and accumulation of orders for Kanglong Chemical is seen as positive for the company from the end of this year to next year [1] - Credit Suisse has revised its revenue and net profit forecasts for Kanglong Chemical for the years 2025 to 2027 [1] Group 2 - The target price for Kanglong Chemical's H-shares has been raised from HKD 24.7 to HKD 28.8, while the target price for A-shares has increased from RMB 34.8 to RMB 40.6 [1] - The rating for Kanglong Chemical remains "Outperform" [1]

Core Viewpoint - The report from Credit Lyonnais indicates that Kanglong Chemical (03759, 300759.SZ) has raised its revenue growth guidance for 2025 from a year-on-year increase of 10% to 15% to a new range of 12% to 16%, with expectations for adjusted net profit to achieve double-digit growth [1] Group 1 - Credit Lyonnais views the upward revision of guidance and the increase in accumulated orders for Kanglong Chemical as positive developments for the company [1] - The firm has revised its revenue and net profit forecasts for Kanglong Chemical for the years 2025 to 2027 [1] Group 2 - The target price for Kanglong Chemical's H-shares has been raised from HKD 24.7 to HKD 28.8, while the target price for A-shares has been increased from RMB 34.8 to RMB 40.6 [1] - Credit Lyonnais maintains a "Outperform" rating for Kanglong Chemical [1]

Core Viewpoint - 康龙化成's stock has shown a significant increase in price and trading activity, reflecting positive market sentiment despite a decline in net profit year-over-year [1][2]. Financial Performance - As of September 30, 康龙化成 reported a revenue of 100.86 billion yuan for the first nine months of 2025, representing a year-over-year growth of 14.38% [2]. - The company's net profit attributable to shareholders was 11.41 billion yuan, which is a decrease of 19.76% compared to the previous year [2]. Stock Performance - 康龙化成's stock price increased by 32.63% year-to-date, with a recent 5-day increase of 4.58% and a 20-day decline of 2.25% [1]. - The stock was trading at 33.82 yuan per share with a market capitalization of 601.39 billion yuan as of October 31 [1]. Shareholder Information - The number of shareholders decreased by 1.62% to 86,500 as of September 30, 2025 [2]. - Major shareholders include 中欧医疗健康混合A and 香港中央结算有限公司, with both increasing their holdings [3]. Business Segmentation - 康龙化成's main business segments include laboratory services (60.43%), CMC services (21.58%), clinical research services (14.58%), and other services [1].

Group 1 - The core viewpoint of the articles highlights the strong performance of Kanglong Chemical in Q3, with a revenue of 3.645 billion yuan, representing a year-on-year growth of 13.44%, and a net profit of 440 million yuan, which is a significant increase of 42.52% compared to last year [1] - Kanglong Chemical has raised its full-year revenue growth target to 12-16% based on the performance in the first three quarters of the year [1] - The company announced the acquisition of 82.54% of Baiaode for 1.346 billion yuan, enhancing its capabilities in drug discovery through comprehensive services from gene analysis to cryo-electron microscopy [1] Group 2 - The recent strong performance reports from leading CXO companies like WuXi AppTec and Kanglong Chemical have boosted market confidence in the innovative drug sector [1] - The innovative drug sector is expected to see more policy-driven catalysts as concerns over market bubbles have diminished following a phase of adjustment [1] - Related ETFs in the innovative drug industry include the Hong Kong Stock Connect Medical ETF (520510), which has a leading CXO content, and the Hang Seng Pharmaceutical ETF (159892), which emphasizes innovation [2]

Core Viewpoint - UBS reported that Kanglong Chemical (03759) achieved a 13.4% year-on-year revenue increase in Q3, reaching 3.65 billion RMB, which is in line with market and UBS forecasts of 3.6 billion and 3.7 billion RMB respectively [1] - Net profit rose by 42.5% year-on-year to 440 million RMB, which fell short of market and UBS predictions of 467 million and 506 million RMB respectively [1] - The company saw a 13% year-on-year growth in new orders for the first three quarters, accelerating from approximately 10% growth in the first half of the year [1] - UBS slightly raised its revenue and net profit forecasts for the company from 2023 to 2027, increasing the target price for the H-shares from 31 HKD to 32.9 HKD while maintaining a "Buy" rating [1] Financial Performance - Q3 revenue increased by 13.4% to 3.65 billion RMB [1] - Net profit increased by 42.5% to 440 million RMB [1] - New orders grew by 13% year-on-year in the first three quarters [1] Forecast Adjustments - UBS adjusted revenue and net profit forecasts for the company for the years 2023 to 2027 [1] - Target price for H-shares raised from 31 HKD to 32.9 HKD [1] - "Buy" rating maintained by UBS [1]

Core Viewpoint - 康龙化成 is experiencing a positive trend in its CMC service gross margin, with expectations for continued growth in the upcoming quarters [1] Financial Performance - The gross margin for CMC services in Q3 2025 is reported at 34.6%, reflecting a 4 percentage point increase quarter-over-quarter [1] - The company anticipates that the gross margin for Q4 will continue to improve sequentially, with the full-year gross margin expected to be slightly above 33%, compared to the same period last year [1] Capital Expenditure - The projected capital expenditure for 2025 is over 2 billion yuan, primarily allocated for laboratory services in China and small molecule CDMO capacity expansion, including new capacity in Beijing and the second phase project in Shaoxing [1] - Future capital expenditures are expected to remain at similar levels, with operating cash flow sufficient to cover these expenditures [1] Innovation and Technology Investment - 康龙化成 is committed to ongoing investments in new technology areas, including organoids and AI [1] - The company aims to maintain sustainable positive free cash flow [1]

Financial Performance - Revenue for Q3 2025 reached RMB 3,645 million, a 9.1% increase QoQ and a 13.4% increase YoY [9] - Net profit attributable to shareholders for Q3 2025 was RMB 440 million, up 11.0% QoQ and 42.5% YoY [9] - Non-IFRS adjusted net profit for Q3 2025 was RMB 471 million, reflecting a 15.9% QoQ increase and a 12.9% YoY increase [9] Year-to-Date Performance - Total revenue for the first three quarters of 2025 was RMB 10,086 million, a 14.4% increase YoY [10] - Net profit attributable to shareholders for the first three quarters of 2025 was RMB 1,141 million, down 19.8% YoY [10] - Non-IFRS adjusted net profit for the first three quarters of 2025 was RMB 1,227 million, a 10.8% increase YoY [10] Order Growth and Client Performance - New orders increased by over 13% YoY, with growth accelerating compared to the first half of the year [10] - Revenue from top 20 pharmaceutical companies grew by 37.9% YoY [15] - Cash flow from operating activities was RMB 2,436 million, with free cash flow at RMB 536 million [10] Revenue Composition - Revenue breakdown for Q3 2025: - Small Molecules: 60% - CDMO: 23% - Clinical Research Services: 14% - Laboratory Services: 12% [12] - Revenue from North American clients grew by 11.9%, European clients by 23.2%, and Chinese clients by 16.1% [13] Cost and Expense Ratios - Selling and distribution expenses as a percentage of revenue remained stable at 2.2% [22] - R&D expenses as a percentage of revenue were 3.9% for the first three quarters of 2025 [25] - Net interest expenses as a percentage of revenue were 0.8% for the first three quarters of 2025 [29] Strategic Outlook - The company aims for a revenue growth target of 12-16% for the full year 2025 [35] - The strategic focus includes enhancing R&D and production efficiency while expanding market share [35]

Financial Performance - Revenue for Q3 2025 reached RMB 3,645 million, a 9.1% increase QoQ and a 13.4% increase YoY [10] - Net profit for Q3 2025 was RMB 440 million, up 11.0% QoQ and 42.5% YoY [10] - Non-IFRS adjusted net profit for Q3 2025 was RMB 471 million, reflecting a 15.9% increase QoQ and a 12.9% increase YoY [10] Year-to-Date Performance - Revenue for the first three quarters of 2025 was RMB 10,086 million, a 14.4% increase YoY [11] - Net profit for the first three quarters of 2025 was RMB 1,141 million, down 19.8% YoY [11] - Non-IFRS adjusted net profit for the first three quarters of 2025 was RMB 1,227 million, a 10.8% increase YoY [11] Customer and Market Insights - New purchase orders (POs) increased by over 13% YoY, with significant growth from multinational customers [11] - Revenue from the top 20 pharmaceutical companies increased by 37.9% YoY [11] - Revenue from China entities grew by 14.8%, while overseas subsidiaries saw an 11.6% increase [13] Segment Performance - Laboratory services accounted for 60% of revenue, with a 14.3% increase YoY [15] - Small molecule CDMO services contributed 23% of revenue, with a 12.7% increase YoY [15] - Clinical development services generated 14% of revenue, with steady growth despite a decline in gross profit margin [17] Financial Guidance - The company raised its full-year revenue growth guidance to 12-16% for 2025 [11][31] - The guidance does not include potential contributions from the Biortus acquisition [32] Operational Metrics - Net operating cash flow for the first three quarters of 2025 was RMB 2.44 billion, with free cash flow of RMB 536 million [11] - Gross profit margin (GPM) for Q3 2025 was 45.0%, slightly down from 45.3% YoY [15]

Financial Performance - In Q3 2025, the company achieved a revenue of CNY 3.645 billion, a 9.1% increase from Q2 and a 13.4% increase year-on-year [2] - The net profit attributable to shareholders was CNY 440 million, reflecting an 11.0% increase from Q2 and a 42.5% increase year-on-year [2] - For the first three quarters of 2025, the company reported a revenue of CNY 10.086 billion, a 14.4% year-on-year increase, while net profit decreased by 19.8% due to a high base effect from a significant investment gain in Q2 of the previous year [3] Order and Revenue Growth - New orders signed in the first three quarters increased by over 13% year-on-year, with acceleration compared to the first half of the year [3] - Revenue from multinational clients grew significantly, with income from the top 20 global pharmaceutical companies increasing by 37.9% year-on-year, contributing to strong performance in services and laboratory services [3] Cash Flow - The company generated a net cash flow from operating activities of CNY 2.436 billion in the first three quarters, with free cash flow reaching CNY 536 million [3] Business Segment Performance - Laboratory Services: Q3 revenue reached CNY 6.004 billion, a 14.3% year-on-year increase, with a gross margin maintained around 45% [4] - CMC Services: Q3 revenue was CNY 903 million, a 29.6% increase from Q2 and a 12.7% increase year-on-year, with a gross margin of 34.6% [4] - Clinical Research Services: Q3 revenue was CNY 501 million, reflecting an 8.2% year-on-year increase [4] - Large Molecule and CGT Services: Q3 revenue was CNY 125 million, a 25.1% year-on-year increase [4] Acquisition of Bai Ao De - The company announced the acquisition of Wuxi Bai Ao De Biological Science Co., which will enhance its "full-process, integrated, international, multi-therapy" service platform [5] - Bai Ao De specializes in drug discovery services and is recognized as a leading CRO with comprehensive capabilities from gene to protein to cryo-EM structure analysis [5] Market Position and Strategy - The acquisition is expected to strengthen the company's service capabilities in structural biology and early-stage research, enhancing competitiveness in the global early research market [6] - The laboratory services segment is experiencing growth above industry levels, driven by strategic partnerships with multinational clients and resilient demand from smaller clients [8] Future Outlook - The company plans to maintain CAPEX at over CNY 2 billion, focusing on expanding laboratory services and small molecule service capacities [8] - The CMC segment is expected to see continued improvement in gross margins as revenue grows [8]

Core Insights - Kanglong Chemical experienced a stock price decline of 2.03% on October 30, trading at 33.36 CNY per share with a market capitalization of 59.32 billion CNY [1] - The company reported a year-to-date stock price increase of 30.82%, with a 6.11% rise over the last five trading days [1][2] Financial Performance - For the period from January to September 2025, Kanglong Chemical achieved a revenue of 10.09 billion CNY, reflecting a year-on-year growth of 14.38%, while the net profit attributable to shareholders decreased by 19.76% to 1.14 billion CNY [2] - Cumulative cash dividends since the company's A-share listing amount to 1.79 billion CNY, with 1.00 billion CNY distributed over the past three years [3] Shareholder Structure - As of September 30, 2025, the number of shareholders decreased by 1.62% to 86,500, with an average of 0 circulating shares per person [2] - Notable institutional shareholders include China Europe Medical Health Mixed Fund, which increased its holdings by 8.96 million shares, and Hong Kong Central Clearing Limited, which raised its stake by 1.02 million shares [3]