Group 1: Company Performance - Jiuzhou Pharmaceutical reported a revenue of 2.871 billion yuan, an increase of 3.86% year-on-year [1] - The net profit attributable to shareholders was 526 million yuan, reflecting a year-on-year increase of 10.7% [1] - The basic earnings per share stood at 0.59 yuan [1] Group 2: CDMO Industry Insights - The global CDMO market is projected to reach $168.4 billion by 2028 and $338.5 billion by 2030 [2] - China's CDMO market has grown from 16 billion yuan in 2018 to 85.9 billion yuan in 2023, with a compound annual growth rate of 39.9% [2] - The market share of Chinese CDMO companies is increasing due to competitive advantages in talent supply, labor costs, and resource support [2] Group 3: Project Pipeline and Client Engagement - Jiuzhou Pharmaceutical has a robust project pipeline with 38 projects already on the market and 90 in Phase III clinical trials [1] - The company has successfully provided services to over 80 clients from major global pharmaceutical markets, covering more than 100 active formulation projects [2] - The company has introduced over 20 new clients in the peptide and conjugate business, with a focus on diabetes and cancer treatments [3] Group 4: Global Expansion and Operational Strategy - Jiuzhou Pharmaceutical is advancing its global R&D capabilities and production capacity, with successful business progress in Japan and Germany [3] - The company aims to accelerate its global business expansion and enhance collaborative efforts to drive sustainable growth [3]

Group 1 - Yabonn Chemical has signed a strategic cooperation agreement with Heng Rui Medicine, establishing a partnership to enhance their competitive edge in the innovative pharmaceutical sector [1] - Heng Rui Medicine is recognized as a leading enterprise in China's innovative drug field, with significant achievements in drug research and development for major diseases [1] - Yabonn Chemical focuses on innovative pharmaceuticals and agricultural CDMO, implementing a major client strategy to optimize its pharmaceutical client structure and promote healthy business development [1] Group 2 - The company has decided to terminate the planned acquisition of a stake in Haotian Technology, citing strategic focus and resource allocation considerations [2] - The termination is influenced by the successful advancement of strategic cooperation with major clients like Heng Rui Medicine, leading to a preference for funding new product lines and R&D projects [2] - Yabonn Chemical aims to enhance its competitive position in the innovative pharmaceutical CDMO business by deepening external resource collaboration and optimizing resource allocation [2]

Investment Rating - The report maintains a "Strong Buy" investment rating for the company [2]. Core Views - The report highlights that the company has transformed into a leading player in the domestic CDMO sector, ranking in the top five of the "Top 20 CDMO Companies in China" for five consecutive years since 2020 [10][12]. - The company aims to expand its CDMO operational projects to 3,000 within 2-3 years, with 10-20 projects entering commercialization annually [10]. - The report emphasizes the company's comprehensive upgrades in both technical investment and manufacturing capabilities, which are expected to drive future growth [80]. Summary by Sections Section 1: Progress in CDMO Sector - The company has accumulated over 20 years of experience and has shifted from a traditional API company to a leading small molecule CDMO provider [10]. - The company has established a solid foundation for CDMO development through its extensive experience in chemical synthesis and production processes [11]. Section 2: R&D Capabilities - The company has significantly increased its R&D investment, expanding its CDMO R&D personnel from over 500 to an expected 1,000 in the next two years [32][41]. - It has established three major R&D centers globally and eight technical platforms to enhance its project acquisition and cost control capabilities [32][42]. Section 3: Manufacturing Advantages - The company maintains a strong manufacturing capability with a total chemical synthesis capacity of 11,000 m³ and a total biological fermentation capacity of 6,570 m³ [63]. - It has received multiple international certifications, including WHO, FDA, and EU EDQM, which enhances its service capabilities for global clients [63]. Section 4: Future Growth Potential - The company has signed confidentiality agreements with 572 domestic and international innovative pharmaceutical companies, indicating strong client engagement [66]. - The report notes that the company has 116 API projects, with 22 already commercialized and 15 in the validation stage, providing a robust growth pipeline [66]. Section 5: Financial Projections - The company is projected to achieve a net profit of 1.0 billion, 1.2 billion, and 1.5 billion yuan for the years 2025, 2026, and 2027, respectively, with corresponding PE ratios of 17, 14, and 11 [80].

Group 1 - The CDMO industry is a crucial partner for pharmaceutical companies, providing process development and production services. China has over 220 million talent resources, giving the CDMO industry a strong competitive edge [3][9]. - From 2018 to 2023, the Chinese CDMO market grew at a compound annual growth rate (CAGR) of 39.9%, increasing from 16 billion RMB to 85.9 billion RMB. It is projected to reach 208.4 billion RMB by 2028 and 536.9 billion RMB by 2033 [3][9][10]. - The industry is entering a new phase characterized by "technology deepening, global expansion, and ecological integration," but it faces challenges such as geopolitical issues, overcapacity, and technological disruption [10]. Group 2 - The report highlights that the medical and pharmaceutical sectors saw mixed performance, with six sub-industries showing varied returns. Medical devices and traditional Chinese medicine led the gains, while medical services and pharmaceutical commerce had lower increases [11]. - The report indicates that the valuation levels for the chemical pharmaceutical sector were the highest at 78.81 times, followed by biological products at 61.33 times, while traditional Chinese medicine and pharmaceutical commerce had lower valuations [11]. - The report emphasizes the increasing focus on early-stage projects in the CDMO industry, with 63.2% of financing events occurring in the A+ round or earlier, indicating a trend towards supporting emerging companies [10].

Core Viewpoint - The company reported a decline in revenue and net profit for 2024, but there are signs of marginal improvement and potential for future growth driven by its chemical macromolecule business [1][2]. Financial Performance - In 2024, the company achieved revenue of 5.805 billion yuan, a year-on-year decrease of 25.82%, and a net profit attributable to shareholders of 949 million yuan, down 58.17% [1]. - The adjusted net profit, excluding non-recurring items, was 850 million yuan, reflecting a decline of 59.63% year-on-year [1]. Business Segments - The small molecule API business generated revenue of 4.571 billion yuan in 2024, with an 8.85% year-on-year increase when excluding large orders [3]. - The chemical macromolecule CDMO segment saw a revenue increase of 13.26% in 2024, with a project completion count of 227 [4]. - The company delivered 48 commercial projects in 2024, generating revenue of 2.804 billion yuan, with a 4.16% increase when excluding large orders [3]. Order Growth and Future Outlook - The company signed new orders that increased by approximately 20% year-on-year, with a total order backlog of 1.052 billion USD, representing over a 20% increase compared to the previous year [2]. - The chemical macromolecule business is expected to double its revenue in 2025, contributing significantly to overall performance [4]. - The company anticipates that the small molecule PPQ projects will reach 12 in 2025, laying a foundation for future growth [3]. Investment Considerations - The company is positioned as a leading small molecule CDMO supplier, focusing on integrated services in intermediates, APIs, and formulations [5]. - Adjusted revenue forecasts for 2024-2026 are 6.648 billion, 7.615 billion, and 8.809 billion yuan, respectively, with corresponding EPS adjustments [5].