Core Viewpoint - The domestic vaccine leader, Zhifei Biological, is facing unprecedented challenges, with a significant decline in revenue and profit due to market adjustments and product dependency [1][2][3] Company Summary - Zhifei Biological reported a revenue of 4.919 billion yuan in the first half of 2025, a year-on-year decline of 73.06%, and a net loss of 597 million yuan, marking its first half-year loss since its listing in 2010 [1] - The company’s nine-valent HPV vaccine issuance dropped by 76.8% from 18.2717 million doses to 4.2388 million doses, while the four-valent HPV vaccine issuance fell to zero [1][2] - Revenue from agency products, particularly Merck's products, plummeted from 17.59 billion yuan to 4.37 billion yuan, a decrease of 75.16% [1] - In 2024, Zhifei's revenue was 26.07 billion yuan, down 50.74% year-on-year, with a net profit of 2.018 billion yuan, down 74.99% [2] Industry Summary - The entire domestic vaccine industry is experiencing a collective downturn after a period of rapid growth, with companies like Watson Bio and Wantai Bio also facing significant challenges [4][5] - The industry has been heavily reliant on a few major products, leading to vulnerability when demand shifts or competition increases [5][6] - The market for vaccines is becoming increasingly competitive, with many companies focusing on traditional products, resulting in a lack of innovation and new growth drivers [5][6] Transformation Trends - In response to declining performance, vaccine companies are seeking to diversify their product lines, with Zhifei investing in Chongqing Chen'an Biological Pharmaceutical Co., focusing on GLP-1 drugs [6][7] - The GLP-1 market is projected to grow significantly, with sales expected to exceed $17 billion by 2031, indicating a potential new growth area for companies [6] - Wantai Bio is also diversifying into the collagen medical materials market, with significant revenue growth reported [7] - The shift into new markets presents high risks and challenges, as companies must navigate unfamiliar territories while managing financial pressures [8]

Core Viewpoint - The domestic vaccine leader, Zhifei Biological, is facing unprecedented challenges, with a significant decline in revenue and profit due to market adjustments and reliance on core products [1][2][4]. Financial Performance - Zhifei Biological reported a revenue of 4.919 billion yuan in the first half of 2025, a year-on-year decline of 73.06%, and a net loss of 597 million yuan, compared to a profit of 2.234 billion yuan in the same period last year [1][2]. - The company experienced its first half-year loss since its listing in 2010, marking four consecutive quarters of losses [2]. - In 2024, Zhifei's revenue dropped to 26.07 billion yuan, a decrease of 50.74%, with net profit falling to 2.018 billion yuan, down 74.99% [3]. Product Performance - The batch issuance of Zhifei's nine-valent HPV vaccine fell by 76.8% year-on-year, from 18.2717 million doses to 4.2388 million doses, while the four-valent HPV vaccine's issuance dropped to zero [1][3]. - Revenue from agency products, particularly Merck's HPV vaccine, plummeted from 17.59 billion yuan to 4.37 billion yuan, a decline of 75.16% [1][3]. Industry Challenges - The decline in Zhifei's performance reflects broader challenges in the domestic vaccine industry, which is experiencing a collective downturn after years of rapid growth [2][4]. - The industry is facing pressure from market adjustments, government procurement, and increased competition, particularly in the HPV vaccine segment [5][6]. Strategic Responses - In response to declining performance, Zhifei Biological is pursuing a strategic shift by investing in Chongqing Chen'an Biological Pharmaceutical Co., focusing on GLP-1 (glucagon-like peptide-1) drugs, which are gaining market attention [7][8]. - Other companies, such as Wantai Biological, are also exploring new markets, including collagen medical materials, to diversify their revenue streams [8][9]. Market Outlook - The GLP-1 drug market is projected to grow significantly, with sales expected to exceed $17 billion by 2031, indicating a potential new growth area for companies like Zhifei [7][9]. - The recombinant collagen market in China is anticipated to reach 58.57 billion yuan by 2025, with a compound annual growth rate of 44.93% [9]. Conclusion - The current situation highlights the urgent need for domestic vaccine companies to innovate and diversify their product offerings to navigate the challenges posed by market fluctuations and increased competition [10].