KANGHUA BIOLOGICAL(SZ:300841) Tai Mei Ti A P P·2025-10-17 12:13Core Viewpoint - Kanghua Biotech reported a significant decline in performance for the first three quarters of 2025, with revenue dropping by 20.78% year-on-year to 840 million yuan and net profit falling by 53.41% to 189 million yuan, amid a cooling vaccine industry and ongoing challenges related to product structure and performance commitments following a change in control [2][3][4]. Financial Performance - For the first three quarters of 2025, Kanghua Biotech's revenue was 840 million yuan, a year-on-year decrease of 20.78%, while net profit was 189 million yuan, down 53.41% [2]. - Excluding last year's one-time revenue from overseas licensing of the six-valent norovirus vaccine (106 million yuan), revenue decreased by 11.96%, with non-immunization vaccine sales also down by 11.97% [3]. - The net cash flow from operating activities fell by 39.22% due to reduced sales collections and overseas licensing income [3]. Product Challenges - Kanghua Biotech's reliance on a single product, the human diploid cell rabies vaccine, has led to significant revenue pressure, with this product accounting for over 97% of total revenue in 2024 [4]. - The batch issuance volume of the rabies vaccine is expected to drop by 43.83% year-on-year in 2024, with sales revenue further declining by 23.79% in the first half of 2025 [4]. - The vaccine industry is facing a "demand gap," with major domestic vaccine companies experiencing substantial declines in performance, impacting Kanghua Biotech as well [4]. Competitive Landscape - The vaccine market is becoming increasingly competitive, with three companies conducting clinical trials and two having submitted applications for market approval, which may adversely affect Kanghua Biotech's market share and pricing [4][5]. - Despite efforts to revive the ACYW135 meningococcal polysaccharide vaccine, the company struggles to fill the revenue gap left by its core product [5]. Control Change and Performance Commitments - In July 2023, Kanghua Biotech underwent a change in control, transferring 21.91% of shares to Shanghai Wankexin Biotech, which now holds 29.99% voting rights [6]. - The new control structure comes with performance commitments requiring a total net profit of no less than 728 million yuan from 2025 to 2026, which poses significant pressure given the current performance levels [6]. Strategic Response - Kanghua Biotech aims to stabilize its existing business in the short term, rely on new products in the medium term, and pursue mergers and acquisitions in the long term [7]. - The company has six vaccines in the research pipeline, but only the six-valent norovirus vaccine is expected to enter clinical trials by the end of 2024, limiting immediate revenue contributions [7].