Investment Rating - The report maintains a "Buy" rating for Viva Biotech Holdings (1873.HK) with a target price of HKD 4.0, indicating a potential upside of 41.3% from the current price of HKD 2.83 [1][3]. Core Insights - The company is leveraging AI to enhance drug development and is on the verge of a commercial explosion in its CDMO (Contract Development and Manufacturing Organization) products [1][3]. - Despite a 15.3% year-on-year decline in revenue to RMB 830 million in the first half of 2025, the adjusted net profit increased by 9.1% to RMB 180 million, indicating resilience in profitability [3][6]. - The CRO (Contract Research Organization) business has shown recovery, with a 9.6% increase in revenue to RMB 420 million, supported by a growing client base and a significant contribution from AI-enabled projects [7][8]. Company Operations Review - The CDMO segment's revenue decreased by 31.4% to RMB 410 million due to upgrades for FDA audits and geopolitical supply chain disruptions, but profitability improved with a gross margin of 35.9% [5][18]. - The CRO business has expanded its client base to 1,669, with overseas revenue accounting for 85% of total income, reflecting a 4.9% increase year-on-year [5][8]. - AI-enabled projects now contribute approximately 10% of CRO revenue, showcasing the integration of advanced technology in drug discovery processes [14][18]. Financial Forecast - Revenue projections indicate a gradual recovery, with expected revenues of RMB 1,912 million in 2025, followed by growth to RMB 2,478 million by 2027 [6][23]. - The gross margin is anticipated to improve from 40.0% in 2025 to 43.9% by 2028, reflecting operational efficiencies and enhanced service offerings [6][23]. - The adjusted net profit is forecasted to rise from RMB 356 million in 2025 to RMB 569 million by 2028, indicating strong growth potential [6][23].
维亚生物（01873）：AI赋能药物研发，CDMO商业化产品爆发在即