Core Viewpoint - CMB International initiates coverage on China Biopharmaceutical with a "Buy" rating and a target price of HKD 9.4 based on a 10-year DCF model, corresponding to a 2026 adjusted P/E ratio of 37 times [1] Group 1: Company Performance - The company is entering a harvest period for innovative drugs, with rapid growth in biosimilars and stable performance in chemical generics [1] - Currently, the company has received approval for 7 biosimilars, with a total market capacity of RMB 24 billion in sample hospitals for 2024 [1] - The mature sales network in China is expected to facilitate rapid sales growth for biosimilars, particularly for the first generic version of Pertuzumab [1] Group 2: Financial Projections - CMB International forecasts revenue growth of 11.4%, 10.5%, and 9.6% for the years 2025, 2026, and 2027, respectively [1] - Adjusted net profit is projected to grow by 12.2%, 11.5%, and 10.5% for the same years [1] - The current forecasts do not account for potential contributions from several significant innovative products that may receive overseas licensing [1]

Group 1 - The core point of the article is that China Biopharma has successfully progressed in its collaboration with Merck on LM-299, with a milestone payment of $300 million expected to be received soon [1] - The technology transfer for LM-299 was completed in July 2023, and Merck anticipates recognizing the $300 million milestone payment in the third quarter [1] - In 2024, China Biopharma and Merck reached a global exclusive licensing agreement for LM-299, which includes an upfront payment of $588 million and potential milestone payments of up to $2.7 billion [1]

Core Viewpoint - The report from CMB International initiates coverage on China Biopharmaceutical (01177) with a "Buy" rating, setting a target price of HKD 9.40 based on a 10-year DCF model with a WACC of 9.3% and a perpetual growth rate of 2.0% [1] Group 1: Financial Projections - Revenue is expected to grow by 11.4%/10.5%/9.6% in 2025E/26E/27E, while adjusted net profit is projected to increase by 12.2%/11.5%/10.5% during the same period [1] Group 2: Innovation and R&D - The company is significantly increasing its R&D investment, with an expected 17.6% of revenue allocated to R&D in 2024, up from 9.9% in 2019 [1] - By the end of 2024, the company will have received approval for 17 innovative drugs, with innovative product revenue accounting for 42% of total revenue, compared to 11% in 2015 [1] - The company has been actively engaging in License in transactions, averaging over 3 deals per year from 2019 to 2024, enhancing its innovative drug pipeline [1] Group 3: Product Pipeline and Market Potential - The company has several products with potential for overseas licensing collaborations, including TQC3721, Rovafixitinib, TQB2102, TQB3616, TQA2225, LM-108, LM-168, and LM-364 [1] - The innovative R&D focuses on four key areas: oncology, liver disease/metabolism, respiratory, and surgical/pain management, with a rich pipeline of innovative drugs [2] - Anlotinib has become a cornerstone product with 9 approved indications and 4 NDA submissions, further expanding its sales potential through combination therapies [2] Group 4: Biosimilars and Generic Drugs - The company has 7 approved biosimilars with a total market capacity of RMB 24 billion in 2024, and sales are expected to grow rapidly, particularly for the first generic version of Pertuzumab [3] - The chemical generic drug business has shown resilience during recent policy adjustments, with a projected revenue growth of 3.1% YoY in 2024 [3] - The impact of centralized procurement on generic drugs has largely dissipated, with the tenth batch of centralized procurement accounting for only 1% of the company's total revenue in 2024 [3]

Core Viewpoint - 招银国际 initiates coverage on China Biopharmaceutical (01177) with a "Buy" rating, setting a target price of HKD 9.40 based on a 10-year DCF model with a WACC of 9.3% and a perpetual growth rate of 2.0% [1] Group 1: Innovation and R&D - The company is undergoing a comprehensive transformation towards innovation, with R&D expenditure expected to account for 17.6% of revenue in 2024, up from 9.9% in 2019 [2] - By the end of 2024, the company will have received approval for 17 innovative drugs, with innovative product revenue contributing 42% of total revenue, compared to 11% in 2015 [2] - The company has increased its focus on License in transactions, averaging over 3 deals per year from 2019 to 2024, enhancing its innovative drug pipeline [2] Group 2: Product Pipeline and Market Potential - The company’s innovative R&D focuses on four key areas: oncology, liver disease/metabolism, respiratory, and surgical/pain management, resulting in a rich pipeline [3] - Anlotinib has become a cornerstone product in oncology, with 9 approved indications and 4 NDA submissions as of July 2025, and is expected to expand into first-line treatment through combination with immunotherapy [3] - The company has several products with potential for overseas licensing, including TQC3721, Rovafatinib, TQB2102, and others, indicating strong prospects for international collaboration [2][3] Group 3: Biosimilars and Generic Drugs - The company has received approval for 7 biosimilars, with a total market capacity of RMB 24 billion in 2024, and is expected to see rapid sales growth, particularly for the first biosimilar of Pertuzumab [4] - The chemical generic drug business has shown resilience during recent policy adjustments, with a projected revenue growth of 3.1% YoY in 2024 [4] - The impact of generic drug procurement policies has largely dissipated, with the tenth batch of procurement accounting for only 1% of the company’s total revenue in 2024 [4]

Investment Rating - The report initiates coverage with a "Buy" rating and sets a target price of HKD 9.40, indicating a potential upside of 24.9% from the current price of HKD 7.52 [1][3][23]. Core Insights - The report highlights the significant achievements of the company in its transformation from generic to innovative pharmaceuticals, focusing on key therapeutic areas such as oncology, liver disease/metabolism, respiratory, and surgical/pain management [1][9][26]. - The company has increased its R&D investment, with R&D expenses projected to reach RMB 5.09 billion in 2024, accounting for 17.6% of revenue, up from 9.9% in 2019 [10][40]. - The innovative product pipeline has expanded significantly, with 17 approved innovative drugs by the end of 2024, and the revenue contribution from innovative products is expected to reach 50% by 2025 and 60% by 2027 [10][47]. Financial Summary - For FY23A, the company reported sales revenue of RMB 26.199 billion, with a projected growth of 10.2% in FY24A [2]. - Adjusted net profit for FY23A was RMB 2.589 billion, with an expected increase of 33.5% in FY24A [2]. - The adjusted earnings per share (EPS) is forecasted to grow from RMB 0.14 in FY23A to RMB 0.19 in FY24A [2]. Market Performance - The company's market capitalization is approximately HKD 141.08 billion, with an average trading volume of HKD 860.8 million in March [3]. - The stock has shown strong performance, with a 166.7% increase over the past six months [5]. Product Pipeline and Innovation - The company has a robust pipeline with multiple products showing potential for overseas licensing, including TQC3721, 罗伐昔替尼, and TQB2102 [12][27]. - The oncology segment is highlighted as a key growth area, with 安罗替尼 being a cornerstone product that has received multiple indications and is expected to generate significant sales [13][14]. Business Strategy - The company is focusing on enhancing its supply chain and production efficiency, achieving a procurement coverage rate of 95% by 2024 [28]. - A strategic shift towards a more specialized sales structure has been implemented to improve marketing effectiveness and operational efficiency [33]. Growth Projections - Revenue is expected to grow at a compound annual growth rate (CAGR) of 10.5% from 2024 to 2027, driven by innovative product sales and a strong pipeline [23][24]. - Adjusted net profit is projected to increase at a CAGR of 11.4% during the same period [24].

Core Viewpoint - China Biopharmaceutical (01177) experienced a stock increase of over 3%, reaching HKD 7.7 with a trading volume of HKD 100 million, following the announcement of a successful licensing collaboration with Merck regarding the dual antibody LM-299/MK-2010 [1] Group 1: Financial Developments - The company is set to receive a milestone payment of USD 300 million for technology transfer related to LM-299, expected to be confirmed in the third quarter [1] - In 2024, a global exclusive licensing agreement was established between the company's subsidiary, Lixin Pharmaceutical Technology (Shanghai) Co., Ltd., and Merck, which includes an upfront payment of USD 588 million and potential milestone payments up to USD 2.7 billion [1] Group 2: Project Progress - Merck disclosed during its Q2 earnings call that the technology transfer for LM-299 was completed in July and is progressing as planned [1]

2025年7月29日，默沙东在二季度业绩会上披露，LM-299的技术转移已于7月完成，预计将于第三季度 确认3亿美元的技术转移里程碑款项。此外，在电话会问答环节，默沙东回应分析师查询称，LM299项 目正按计划如期推进。 据悉，2024年，礼新医药与默沙东就LM-299达成全球独家授权协议。根据协议条款，默沙东将获得 LM299的全球开发、生产和商业化独家许可。礼新医药将获得5.88亿美元的首付款，以及最高27亿美元 的里程碑付款。 中国生物制药(01177)早盘涨超3%，截至发稿，涨3.19%，报7.7港元，成交额1亿港元。 消息面上，7月30日，中国生物制药公布，该集团全资附属公司礼新医药科技(上海)有限公司(礼新医药) 与默沙东就LM-299/MK-2010"PD-1/VEGF双抗"的对外授权合作进展顺利，该集团将于近期收到3亿美元 的技术转移里程碑付款。 ...

Core Viewpoint - China Biologic Products Holdings (01177) experienced a stock increase of over 3%, reaching HKD 7.7 with a trading volume of HKD 100 million, following the announcement of a successful collaboration with Merck on the LM-299/MK-2010 "PD-1/VEGF dual antibody" [1] Group 1 - On July 30, China Biologic announced that its wholly-owned subsidiary, Lixin Pharmaceutical Technology (Shanghai) Co., Ltd., is progressing well in its collaboration with Merck regarding LM-299 [1] - The company is expected to receive a milestone payment of USD 300 million for technology transfer in the near future [1] - Merck disclosed during its Q2 earnings call on July 29 that the technology transfer for LM-299 was completed in July and the milestone payment is anticipated to be confirmed in Q3 [1] Group 2 - In 2024, Lixin Pharmaceutical and Merck reached a global exclusive licensing agreement for LM-299 [1] - According to the agreement, Merck will obtain exclusive rights for global development, production, and commercialization of LM-299 [1] - Lixin Pharmaceutical will receive an upfront payment of USD 588 million, along with potential milestone payments totaling up to USD 2.7 billion [1]

Core Insights - China Biologic Products Holdings (01177) announced that its wholly-owned subsidiary, Lixin Pharmaceutical Technology (Shanghai) Co., Ltd., is making significant progress in its collaboration with Merck on the LM-299/MK-2010 "PD-1/VEGF dual antibody" licensing agreement [1] - Merck disclosed during its Q2 earnings call that the technology transfer for LM-299 was completed in July, with a $300 million milestone payment expected to be confirmed in Q3 [1] - In 2024, Lixin Pharmaceutical and Merck reached a global exclusive licensing agreement for LM-299, which includes an upfront payment of $588 million and potential milestone payments of up to $2.7 billion [1] Group 1 - The collaboration between Lixin Pharmaceutical and Merck is progressing smoothly, with a significant milestone payment on the horizon [1] - The technology transfer for LM-299 has been completed, indicating a positive trajectory for the project [1] - The global exclusive licensing agreement includes substantial financial commitments from Merck, highlighting the potential value of the LM-299 project [1]

Core Insights - China Biologic Products Holdings (01177) announced that its wholly-owned subsidiary, Lixin Pharmaceutical Technology (Shanghai) Co., Ltd., has made significant progress in its licensing collaboration with Merck for LM-299/MK-2010, a PD-1/VEGF dual antibody [1] - The company is set to receive a $300 million milestone payment for technology transfer in the near future [1] Group 1 - Merck disclosed during its Q2 earnings call that the technology transfer for LM-299 was completed in July and the $300 million milestone payment is expected to be recognized in Q3 [1] - During the Q&A session of the earnings call, Merck confirmed that the LM-299 project is progressing as planned [1] Group 2 - In 2024, Lixin Pharmaceutical and Merck reached a global exclusive licensing agreement for LM-299 [1] - According to the agreement terms, Merck will receive exclusive rights for global development, production, and commercialization of LM-299, while Lixin Pharmaceutical will receive an upfront payment of $588 million and up to $2.7 billion in milestone payments [1]