Core Viewpoint - He Yuan Bio disclosed a research meeting with investors, highlighting its focus on domestic clients and the growth in the cell and gene therapy sector despite challenges in the broader healthcare financing landscape [1][2]. Company Overview - He Yuan Bio hosted an event titled "I am a Shareholder - Walk into the Listed Company" on July 18, 2025, attended by over 10 investors [2]. - The company is led by key personnel including Chairman and General Manager Pan Oudong, and other executives participated in the discussions [1]. Financial Performance - In 2024, the company achieved revenue of 248.15 million yuan, a year-on-year increase of 21.16%, with specific growth in CRO and CDMO segments [4]. - For Q1 2025, revenue was 52.85 million yuan, a decline of 11.29% compared to the previous year, primarily due to a drop in CDMO revenue [4]. Client Distribution - The company primarily serves domestic clients, with plans to expand its CRO services to pharmaceutical enterprises and enhance its international presence in the CDMO sector [3]. Data Security Measures - He Yuan Bio emphasizes data security, having achieved ISO27001 certification and implementing robust data management and protection systems [5]. CDMO Dependency - The company noted that the complexity of new drug development increases reliance on CDMO services, with over 65% of gene therapy companies outsourcing production [6]. Competitive Advantages - He Yuan Bio possesses a comprehensive CRO/CDMO technology platform, advanced GMP production facilities, and a strong project management capability, which collectively enhance its competitive edge in the cell and gene therapy market [6][7][8]. Cash Flow Situation - In 2024, the company reported a net cash flow of -218.09 million yuan, with ongoing challenges in cash flow due to extended payment cycles from clients [9]. - As of Q1 2025, the company continued to experience negative cash flow but anticipates improvement with the recovery of the investment environment [9]. Accounts Receivable and Bad Debt - As of December 31, 2024, the company had accounts receivable of 85 million yuan, with a bad debt provision of 6.96 million yuan, indicating a low risk of bad debts due to a strong client base [9]. Market Trends - In H1 2025, global healthcare financing decreased by 10%, while financing in China's cell and gene therapy sector increased to approximately 409 million USD, reflecting a recovery in this niche market [9].

Group 1 - The core viewpoint is that He Yuan Bio is experiencing sustained policy support in the cell and gene therapy (CGT) sector, with indications expanding from tumors to multiple areas, despite a cautious investment environment [1] - The company's CDMO business is affected by a slowdown in investment, leading to short-term fluctuations in gross margin, but the long-term market potential remains significant, with gross margins expected to gradually recover [1] - The CRO business is showing steady growth, with an 8.02% increase in sales revenue and an expanding customer base, while actively exploring overseas markets [1] Group 2 - In the fourth quarter, sales and management expenses increased while R&D expenses decreased, with plans for multiple quality improvement measures in 2025 [1] - He Yuan Bio has established a wholly-owned subsidiary, He Yuan He Mei, in the field of regenerative medicine to achieve large-scale cell production and expand its CRO/CDMO full industry chain services [1] - The company has signed new orders exceeding 270 million, and the GMP capacity utilization rate at the Lingang industrial base continues to improve [1] Group 3 - The company aims to optimize its business model centered around underlying technology, expand into international markets, and strengthen strategic partnerships, aspiring to become a comprehensive service platform in the fields of cell gene therapy and regenerative medicine, with a focus on both domestic and global markets [1]

Core Viewpoint - The company is experiencing fluctuations in its CDMO business due to various factors, including market price sensitivity and increased operational costs, but it aims to enhance its market position and profitability through strategic initiatives and technological advancements [3][5][7]. Industry Overview - The domestic CGT (Cell and Gene Therapy) industry is supported by government policies and regulatory guidelines, leading to a gradual recovery in demand and supply dynamics. The industry is currently in a "supply clearing" phase, with expectations of improved market conditions as macroeconomic factors stabilize [2]. - The CGT sector saw a 4% year-on-year increase in financing events among Chinese CGT companies, indicating sustained long-term value recognition despite a cautious investment environment [2]. Company Performance - In 2024, the company reported a main revenue of 248 million yuan, a year-on-year increase of 21.16%, but faced a net loss of 322 million yuan, a decline of 151.54% [8]. - The company's CDMO business is impacted by a slowdown in investment in the biopharmaceutical sector, leading to increased price sensitivity among clients and fluctuating gross margins [3][8]. Business Segments - The company's CDMO business is focused on advanced therapies in cell and gene treatment, with a significant market potential. The company plans to optimize its operational model and enhance project delivery efficiency to improve gross margins over time [3][5]. - The CRO (Contract Research Organization) segment is experiencing steady growth, with a sales revenue of 85.82 million yuan in 2024, reflecting an 8.02% increase year-on-year. The client base has expanded to over 12,800 research laboratories [4][8]. Future Strategies - The company aims to strengthen its core technology in cell and gene therapy, expand its service offerings, and enhance its international market presence. It plans to leverage strategic partnerships and technological collaborations to explore new business opportunities [7]. - The establishment of a subsidiary focused on regenerative medicine marks a significant step in the company's strategic layout, aiming to address industry challenges and enhance its service capabilities in cell therapy [5][7]. Market Outlook - The Chinese stem cell market is projected to reach 26.5 billion yuan in 2024, with a year-on-year growth of 14%. However, the industry faces challenges such as intensified competition and varying product quality [5]. - The company anticipates a gradual recovery in industry conditions, driven by improved macroeconomic factors and supportive policies, which will enhance the overall market landscape for CGT [2].

Financial Data and Key Metrics Changes - Total annual revenues for 2024 reached $228.4 million, aligning with expectations, representing a significant increase from the previous year [10] - Gross margin improved to 45.8% in Q4 2024 from 40.6% in the same period last year, indicating effective cost management strategies [14][88] - The company aims to achieve positive adjusted EBITDA during 2025, with a focus on expanding gross margins and driving profitable revenue growth [14][65] Business Line Data and Key Metrics Changes - Life Sciences Services business accounted for 67% of total revenue in 2024, up from approximately 62% in the previous year, with double-digit growth in BioStorage and BioServices [10] - Revenue from commercial cell and gene therapies increased by 37% in Q4 and 20% for the full year, reflecting strong market demand [11] - The Life Sciences Products segment is showing signs of stabilization, with positive cash flow despite market downturns [12][136] Market Data and Key Metrics Changes - Cryoport supported a record total of 701 clinical trials by year-end, with a net increase of 26 trials over the previous year, indicating strong market presence [11] - The company anticipates 23 VLA or MMA filings in 2025, a significant increase from 11 in the previous year, suggesting robust growth in the cell and gene therapy sector [18][19] Company Strategy and Development Direction - The company is focused on expanding its market share in the cell and gene therapy industry and has opened new facilities for its IntegriCell cryopreservation solution [15][19] - Strategic collaborations are being sought to complement growth plans and enhance revenue streams [20] - The introduction of the Cryoport Express Cryogenic CXHV3 shipping system aims to improve patient accessibility to vital cell therapies [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2024 due to macroeconomic conditions but expressed confidence in the company's ability to adapt and grow [9][136] - The outlook for 2025 is optimistic, with expectations for continued growth in clinical trials and commercial revenue [19][42] Other Important Information - The company has implemented cost management initiatives to align operations with current industry dynamics, resulting in improved gross margins [13][14] - The IntegriCell initiative is expected to generate significant revenue in the future, although initial contributions will be modest due to regulatory processes [16][98] Q&A Session Summary Question: Drivers of the 37% increase in commercial revenue - The increase was broad-based, driven by advancements in earlier line approvals and contributions from multiple commercial clients [24] Question: Stability in the MVE side of the business - Order patterns are showing signs of stability, and management is optimistic about continued progress in 2025 [27] Question: Expectations for service versus product growth in 2025 - Services are expected to grow faster than life sciences products, with a focus on bio-storage and bio-services [33] Question: Impact of tariffs on costs - Tariffs on aluminum and stainless steel are considered, but management does not expect a significant impact on margins [36][38] Question: Clinical trial growth expectations for 2025 - Management anticipates continued strong performance in new trial acquisitions, expecting 2025 to be stronger than 2024 [42] Question: Revenue contributions from new therapies approved in 2024 - While specific contributions cannot be detailed, multiple new therapies are expected to contribute meaningfully to revenue [55] Question: Gross margin expansion drivers - The improvement in gross margins is primarily attributed to cost measures implemented in the second half of the year [87] Question: Revenue contributions from IntegriCell - Initial revenue contributions from IntegriCell are expected to be modest in 2025, with more significant contributions anticipated in 2026 [98] Question: Seasonality in commercial cell and gene therapy revenue - There are no specific seasonality concerns, although facility shutdowns may impact operations [110] Question: Overall market evolution for non-cell and gene therapy services - Modest growth is expected in the non-cell and gene therapy market, with continued growth in transportation and reproductive medicine sectors [120][123]