Core Viewpoint - Company Shenwei Pharmaceutical (02877) is making significant progress in the innovative research and development of traditional Chinese medicine, with its core product, Selotong Capsules, having completed Phase III clinical trials and expected to be approved in 2026 and launched in 2027 [1][2]. Group 1: R&D Progress - The innovative drug Selotong Capsules, targeting vascular dementia, has successfully completed Phase III clinical trials and is currently preparing the necessary data and reports for regulatory requirements, with market potential due to the increasing number of dementia patients in China [2]. - In the first half of 2025, the company's R&D expenses amounted to RMB 50.37 million, representing 3.0% of its revenue, indicating a commitment to innovation [2]. Group 2: Financial Performance - For the first three quarters of 2025, the company's revenue was RMB 2.415 billion, a decrease of 16.3% year-on-year, primarily due to the impact of centralized procurement on traditional Chinese medicine products [3]. - The gross profit margin decreased from 75.3% in the same period last year to 72.2%, attributed to rising raw material costs and price pressures from national procurement policies [3]. - Despite revenue decline, the net profit margin improved from 30.0% to 37.2%, driven by a 20.7% reduction in sales and distribution costs and a 12.9% decrease in administrative expenses [3]. Group 3: Future Outlook - The company's product structure is expected to optimize with the continuous launch of new drugs, with oral products accounting for 65.8% and injection products for 34.2%, enhancing risk resilience [4]. - Revenue projections for 2025, 2026, and 2027 are RMB 3.84 billion, RMB 4.11 billion, and RMB 4.60 billion, respectively, with net profits of RMB 929 million, RMB 1.011 billion, and RMB 1.138 billion [4]. - The target price is set at HKD 10.04 per share, corresponding to a PE ratio of 8 times for 2026, with a current dividend yield of 6.1% [4].
国元国际：给予神威药业“买入”评级 目标价10.04港元