Investment Rating - The report maintains an "OUTPERFORM" rating for CSPC Pharmaceutical Group with a target price of HKD 8.82, representing a potential upside of 48% from the current price of HKD 7.83 [2]. Core Views - The report indicates that CSPC's fundamentals have bottomed out, with major deal catalysts expected to materialize within the year. The company is anticipated to benefit from innovative drug launches and potential licensing agreements [4][16][17]. Financial Performance Summary - In 1Q25, CSPC achieved revenue of CNY 7.0 billion, a year-on-year decrease of 22%. Finished drug revenue was CNY 5.5 billion (down 27% y-o-y), while API revenue increased by 15% to CNY 1.1 billion. The gross profit margin was 67.1%, down 5.2 percentage points year-on-year [3][14][15]. - The net profit attributable to shareholders was CNY 1.5 billion, reflecting an 8% decline year-on-year. R&D expenses rose by 11% to CNY 1.3 billion, with an R&D expense ratio of 18.6% [3][14][15]. Segment Performance - The finished drug segment faced declines due to volume-based procurement (VBP) and National Reimbursement Drug List (NRDL) negotiations, with varying impacts across different therapeutic areas. Notably, the oncology segment saw a significant decline of 66% year-on-year [4][21]. - The API segment benefited from increased sales of vitamin C products, which saw a 25% year-on-year increase [4][15]. Future Prospects - Management is in discussions for multiple potential licensing deals, including the promising SYS6010 (EGFR ADC), with expectations of significant upfront payments and milestone payments totaling approximately USD 5 billion [5][17][18]. - The report highlights that SYS6010 is expected to be the largest out-licensing transaction in the second half of 2025, with anticipated upfront payments between USD 500 million and USD 1 billion [5][18]. Valuation - The revenue forecasts for FY25 and FY26 have been adjusted to CNY 31.3 billion and CNY 32.5 billion, respectively, reflecting the impacts of VBP and NRDL negotiations. The net profit forecasts for the same periods are CNY 5.6 billion and CNY 5.7 billion [8][19]. - The report assigns a P/E ratio of 18.2x for FY26, based on peer comparisons, leading to a target price of HKD 8.82 [8][19].
石药集团（01093）：基本面风险逐步出清，多比重磅交易有望年内落地