Core Viewpoint - The company, Huisheng Biological, reported significant growth in revenue and net profit for the first three quarters of the year, driven by increased product sales despite challenges in the swine breeding industry [1][2] Financial Performance - Revenue for the first three quarters reached approximately 1.26 billion yuan, a year-on-year increase of 58.92% [1] - Net profit attributable to shareholders was about 188 million yuan, up 494.28% year-on-year [1] - In Q3 alone, revenue was 437 million yuan, reflecting a 22.76% increase year-on-year, while net profit soared to 70.72 million yuan, a staggering 1575.79% increase [1] Business Strategy - The implementation of a raw material and formulation integration strategy has significantly enhanced the company's competitiveness and profitability [2] - The raw material business saw substantial revenue growth compared to the previous year, indicating successful strategic execution [2] Market Development - The company is focusing on innovation in microbial fermentation to improve production efficiency and product quality, while also expanding its domestic and international market presence [2] - The overseas market is primarily driven by raw material exports, with formulation exports still in the exploratory phase [2] Capacity Expansion - The company announced plans to invest 170 million yuan in upgrading its veterinary raw material production lines, aimed at enhancing production capacity and energy efficiency [2] - The upgrade will involve the introduction of high-efficiency, automated equipment and will focus on reducing waste and improving resource utilization [2]

Financial Performance - In the first half of 2025, the company achieved operating revenue of 8.22 billion yuan, a year-on-year increase of 88.45% [2] - The net profit attributable to shareholders was 1.17 billion yuan, up 325.88% compared to the same period last year [2] - The net profit after deducting non-recurring gains and losses reached 508.65 million yuan, reflecting a growth of 9,930.10% year-on-year [2] Business Segments - The pharmaceutical preparations segment generated sales revenue of 4.21 billion yuan, marking a 54.23% increase year-on-year [3] - The veterinary raw materials segment saw sales revenue of 3.33 billion yuan, with a significant growth of 199.01% compared to the previous year [3] - The sales revenue from the raw material drug business increased its proportion by 15 percentage points compared to the previous year [6] Research and Development - The company invested 31.53 million yuan in R&D in the first half of 2025, an increase of 19.16% year-on-year [4] - A total of 19 new veterinary drug registration certificates were obtained, including 4 in the first half of 2025 [4] Pet Medicine Development - The company has established a dedicated R&D team for pet medicines and received 7 product approvals during the reporting period [5] - The pet medicine segment includes products for deworming, analgesics, dermatological treatments, internal diseases, and functional health products [5] Future Growth Strategies - The company aims to enhance profitability by focusing on technology-driven strategies and increasing R&D investments [7] - Plans include expanding the pet medicine segment, ensuring stable raw material supply, and exploring overseas markets to mitigate domestic business cycle impacts [8]

Core Viewpoint - The company reported significant growth in revenue and net profit for the first half of 2025, indicating a recovery in the animal health sector after a period of decline [1][2]. Financial Performance - The company's revenue for the first half of 2025 was approximately 822 million yuan, an increase of 88.45% year-on-year [1]. - The net profit attributable to shareholders was about 117 million yuan, marking a turnaround from losses with a year-on-year growth of 325.88% [1]. - In Q1 2025, revenue grew by 92.96% and net profit increased by 371.23% [2]. Segment Analysis - Sales revenue from chemical drug formulations increased by 54.23% year-on-year, although the gross margin decreased by 0.36% [1]. - Sales revenue from veterinary raw materials surged by 199.01% year-on-year, with a gross margin improvement of 27.14% [1]. Investment and Expansion Plans - The company plans to invest 170 million yuan in upgrading its veterinary raw material production lines, which will enhance efficiency and reduce costs [2]. - The upgrade will include the introduction of high-efficiency, automated equipment and the addition of fermentation product production lines [2]. Strategic Focus - The company is focusing on vertical integration in the raw material drug industry and horizontal expansion into pet, poultry, ruminant, and aquaculture sectors [3]. - The strategy includes developing new veterinary drugs, optimizing product performance, and expanding into international markets to mitigate domestic cyclical impacts [3].

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The company's profitability is continuously improving, with the 2025 Q1 net profit attributable to shareholders reaching 44.497 million yuan, a year - on - year increase of 371.23% [26]. - The company will adjust resource allocation, increase investment in pet drug R & D and market channel construction, and regard the pet drug sector as one of the key development directions [27]. - The company will continue to increase R & D and technological innovation investment, deepen the "raw material - preparation integration" strategy, improve the pet business layout, and actively explore overseas markets [27][30]. 3. Summaries by Relevant Catalogs 3.1. Research Basic Situation - Research object: Huisheng Biotechnology [16] - Industry: Pesticides and veterinary drugs [16] - Reception time: June 12, 2025 [16] - Reception personnel: Chairman Zhang Weiyuan, Deputy General Manager and Financial Controller Yang Kaijie, Board Secretary Wang Qingfeng [16] 3.2. Detailed Research Institutions - Reception object: Investors participating in the 2025 collective investor reception day event of listed companies in Hubei Province and the 2024 annual performance briefing online [19] - Reception object type: Others [19] 3.3. Main Content Data - **Export of raw materials**: In 2024, the company's raw material exports achieved sales revenue of 63.3903 million yuan (excluding trade exports), a year - on - year increase of 155.71%, covering more than 20 countries and regions. In Q1 2025, the export revenue decreased by 10.92% quarter - on - quarter compared with Q4 2024. The company is actively exploring overseas markets, and the current raw material export business is normal [23][29]. - **Vietnam project**: The Vietnam production base has obtained production approvals and veterinary drug sales licenses for some products, mainly produces chemical preparation products, with a designed annual production capacity of 1,500 tons [23][25]. - **Pet business**: The company's pet business has formed a relatively complete product matrix, with a small proportion of revenue but maintaining a good growth trend. The company will increase investment in this area, use a combination of online and offline methods for business expansion, and its pet drugs participated in some 6.18 activities [23][25][27]. - **Product price**: The price of tylosin is affected by many factors, and its future price change is uncertain. The change in raw material product prices will have a certain impact on the company's operating performance, but the price change is also uncertain [23][25]. - **Raw materials**: The company's self - produced raw materials are tiamulin and tylosin, and it does not produce tiamulin and oxytetracycline raw materials [26]. - **Convertible bond redemption**: The company's early redemption of convertible bonds is mainly for three reasons: high interest rates affecting net profit, improved profitability, and the need to create conditions for continuous dividends [26]. - **Company development plan**: The company will continue to increase R & D investment, focus on new veterinary drug development, deepen the "raw material - preparation integration" strategy, improve the pet business layout, and actively explore overseas markets [27][30].

Financial Performance - In 2024, the company achieved operating revenue of CNY 1.2 billion, a year-on-year increase of 17.71% [2] - The net profit attributable to shareholders was -CNY 20.16 million, a decline of 220.11% year-on-year [2] - The net profit attributable to shareholders after deducting non-recurring gains and losses was -CNY 16.24 million, down 45.06% year-on-year [2] - In Q1 2025, the company reported operating revenue of CNY 399 million, a year-on-year growth of 92.96% [2] - The net profit attributable to shareholders in Q1 2025 was CNY 44.50 million, an increase of 371.23% year-on-year [2] - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 34.09 million, up 511.54% year-on-year [2] Strategic Development - The company focuses on technological innovation as a driving force for development, with a vertical layout in the upstream raw material drug industry and a horizontal layout in pet, poultry, ruminant, and aquaculture sectors [3] - Plans to enhance R&D and technological innovation to improve product competitiveness and optimize the product performance and industry chain structure [3] - The company aims to expand its overseas market presence, with a "going out" strategy to mitigate domestic business cycle impacts [3] Market Expansion - The company has established a veterinary drug production base in Vietnam and is obtaining production licenses [4] - In 2024, the export sales of raw materials increased by 155.71% year-on-year, with sales networks covering over 20 countries and regions [4] Industry Outlook - The veterinary drug industry is crucial for the healthy and stable development of the breeding industry, enhancing disease prevention capabilities and improving production efficiency [5] - The industry has seen continuous growth, with a compound annual growth rate of 8.47% in sales from 2019 to 2023 [5] - The market demand for veterinary drugs has rebounded since the second half of 2024 due to improved conditions in the breeding industry [5] Future Directions - The company plans to continue accelerating the approval and production efficiency of new drugs, focusing on innovative product development [6] - Emphasis on integrating R&D resources and enhancing collaboration with domestic and international enterprises in pet drug development [6] - The future direction includes a shift from "scale expansion" to "value enhancement," promoting high-quality development through technological innovation and green development [7]

Core Viewpoint - The company has shown significant improvement in its financial performance in 2025, with a strong focus on innovation and strategic expansion in the animal health sector, particularly in the pet medicine market [2][3][10]. Financial Performance - In 2024, the company achieved operating revenue of 1.2 billion yuan, a year-on-year increase of 17.71%, but reported a net loss attributable to shareholders of 20.16 million yuan, a decline of 220.11% [2]. - In Q1 2025, the company reported operating revenue of 399 million yuan, a year-on-year increase of 92.96%, and a net profit attributable to shareholders of 44.50 million yuan, a year-on-year increase of 371.23% [3][10]. Business Strategy - The company is focusing on a "raw material - preparation integration" strategy to enhance its competitive edge and profitability, particularly in the raw material drug sector [4][6]. - The company is actively expanding its product offerings in the pet medicine sector, with 8 new veterinary drug certificates obtained and 20 pet medicines launched [8]. Research and Development - The company has made significant advancements in R&D, achieving breakthroughs in microbial fermentation technology and optimizing production processes, which have led to cost reductions [7]. - Plans for 2025 include accelerating the approval and production of new veterinary drugs, with a target of launching at least 20 new products [7]. Market Conditions - The raw material drug market has seen price increases for certain products, driven by rising demand and a shift in focus among manufacturers towards core competitive products [4]. - The company is adapting to changes in the market environment and competition by enhancing its product competitiveness and expanding its market share [10]. Financial Management - The company plans to redeem its convertible bonds early to reduce financial costs, which is expected to save approximately 30 million yuan in expenses [5]. - The company's debt ratio stands at 47.97%, indicating a focus on managing financial risk while pursuing growth [10].