huahaipharm(SH:600521) Xin Lang Cai Jing·2025-11-09 12:30Core Viewpoint - The company reported a significant decline in revenue and net profit for the first three quarters of 2025, indicating challenges in traditional business segments while awaiting the results of its transformation efforts [1][2]. Financial Performance - For the first three quarters of 2025, the company achieved revenue of 6.409 billion yuan, a year-on-year decrease of 11.57%, and a net profit attributable to shareholders of 380 million yuan, down 63.12% year-on-year [1]. - In Q3 2025, the company recorded revenue of 1.893 billion yuan, a decline of 10.70% year-on-year, and a net loss of 29 million yuan, marking a year-on-year decline of 110.30% [1]. Business Segment Analysis - The decline in raw material drug revenue in Q3 2025 was primarily due to price wars stemming from overcapacity and slower-than-expected commercialization of new projects [2]. - Domestic formulation revenue also fell due to intensified competition and the impact of centralized procurement policies, with new products taking time to ramp up [2]. - U.S. formulation revenue experienced a slight decline due to tariffs and low-price competition [2]. Profitability and R&D Investment - The company's gross margin for the first three quarters of 2025 was 61.71%, a decrease of 0.95 percentage points year-on-year, with the raw material drug gross margin remaining stable at approximately 48.45% [3]. - R&D expenses reached 829 million yuan, an increase of 20.66% year-on-year, focusing on biopharmaceutical projects in clinical phases II/III [3]. - The non-GAAP net profit margin dropped to 4.21%, down 10.03 percentage points year-on-year, reflecting the impact of declining high-margin formulation business revenue [3]. Innovation and Pipeline Development - The company made progress in its transformation, with 16 new domestic formulation products approved and 3 ANDA approvals in the U.S. during the first three quarters of 2025 [4]. - Key innovative drug developments are advancing, including the domestic first self-developed IL-36R monoclonal antibody HB0034, which has recently been accepted for listing application [4]. - The global first anti-PD-L1/VEGF fusion protein HB0025 has shown significant efficacy in phase II clinical trials and is set to enter phase III trials within the year [4]. Investment Outlook - The company is at a critical turning point, with expected net profits of 375 million yuan, 668 million yuan, and 810 million yuan for 2025-2027, reflecting a recovery trajectory [4]. - Given the competitive advantage of the "raw material drug-formulation integration" model and the long-term growth potential from innovation, a target price of 24.6 yuan is set based on a 55 times PE for 2026 [4].