Ge Long Hui·2025-11-14 20:05Core Viewpoint - The company reported better-than-expected performance for Q3 2025, driven by strong growth in pharmaceutical categories, with revenue reaching 17.12 billion yuan (+28.7% YoY) and non-IFRS net profit at 1.902 billion yuan (+42.4% YoY) [1] Development Trends - The growth in original research drug categories continues to drive revenue, with foreign pharmaceutical companies enhancing their presence in the outpatient market and increasing investments in online channels and digital marketing [1] - The company's strong performance in Q3 2025 is primarily attributed to the growth in pharmaceutical categories, particularly in original research drugs, which aligns with the trends observed in the first half of 2025 [1] - Strategic cooperation agreements were signed with major pharmaceutical companies such as Eli Lilly, Innovent Biologics, and Bayer China during Q3 2025, reinforcing the company's unique business model of launching new drugs across all networks [1] Profitability Performance - The company achieved a non-IFRS operating profit of 1.378 billion yuan (+59.9% YoY) in Q3 2025, with a corresponding profit margin of 8.0% (+1.5 percentage points YoY) [2] - The strong performance in non-IFRS net profit margin and operating profit margin is attributed to the increase in digital marketing revenue and controlled expenditure, leading to improved efficiency [2] - Despite being at a relatively high valuation, the company's strong growth potential provides fundamental support, and there is potential for valuation uplift in the short term due to favorable market sentiment [2] Earnings Forecast and Valuation - The company has adjusted its 2025 non-IFRS net profit forecast upward by 9% to 6.265 billion yuan, while maintaining the 2026 forecast at 6.310 billion yuan [2] - Based on the sum-of-the-parts (SOTP) valuation method, the target price has been raised by 5.9% to 71.4 HKD, indicating a potential upside of 10.7% [2]