Summary of Hangzhou Tigermed Consulting Conference Call Industry Overview - The conference call focused on China's clinical Contract Research Organization (CRO) industry, highlighting significant trends and developments from 2019 to 2025 [2][3]. Key Points 1. **CRO Outsourcing**: Approximately 50% of clinical trials conducted in China were outsourced to CROs during the period from 2019 to 2025 [3]. 2. **Market Growth Rates**: The market's compound annual growth rate (CAGR) slowed from 25% during the COVID-19 period (2020-2022) to 4% in the post-COVID period (2023-2024). However, it is projected to accelerate to 13% from 2025 to 2028 according to Frost & Sullivan and the Human Genetic Resources Administration [3]. 3. **CRO Overcapacity**: The number of Chinese CROs decreased from 500 in 2024 to 480 in 2025, while the average number of annual trials conducted per CRO increased from 35.6 to 42.9 [3]. 4. **Clinical Trial Approvals**: In 2025, the number of clinical trial approvals (INDs) and Phase 1 trial starts in China rose by 19% and 13%, reaching 2,703 and 1,168 respectively [4]. 5. **Outlicensing Deals**: China executed 178 novel drug outlicensing deals to the US and Europe from 2024 to 2025, accounting for 14% of the world's total, an increase from 85 deals (9% of the total) from 2022 to 2023 [4]. 6. **Biotech Funding**: Chinese biotech companies raised $5.2 billion from private equity and venture capital in 2025, up from $4.2 billion in 2024. Total upfront payments from outlicensing also increased from $4.4 billion to $7.5 billion [4]. 7. **Global Drug Pipeline Contribution**: China now contributes approximately 30% to the global innovative drug pipeline [5]. 8. **Patient Enrollment Efficiency**: The average time to enroll a patient in China for an oncology trial is 60 days, compared to the global median of 150 days [5]. 9. **New Orders for Tigermed**: New orders for Tigermed increased across various customer types from January to November 2025, with biotech companies and multinational corporations (MNCs) being the largest contributors at 38% and 25% respectively. MNCs are responsible for 25-30% of Phase 3 trials in China [5]. 10. **Trial Pricing Trends**: Prices for Phase 1 and 2 trials reached their lowest point in 2024 and began to rise in 2025, aligning with levels similar to 2023 but remaining significantly below the peak levels seen during COVID-19 in 2022 [6]. Financial Metrics for Hangzhou Tigermed Consulting - **Stock Rating**: Overweight - **Price Target**: RMB 81.00, representing a 35% upside from the current price of RMB 60.03 as of January 20, 2026 [7]. - **Market Capitalization**: RMB 52.383 billion [7]. - **Revenue Projections**: Expected revenue growth from RMB 6.603 billion in 2024 to RMB 8.458 billion by 2027 [7]. - **Earnings Per Share (EPS)**: Projected EPS growth from RMB 0.46 in 2024 to RMB 1.85 in 2027 [7]. - **Return on Equity (ROE)**: Expected to increase from 1.9% in 2024 to 7.2% in 2027 [7]. Risks Identified - **Upside Risks**: Faster growth in clinical R&D outsourcing, accelerated recovery of domestic demand, and new collaboration deals [13]. - **Downside Risks**: Slower-than-expected recovery in clinical CRO demand, rising pricing pressure, geopolitical risks, and potential impairment of goodwill and intangible assets [13]. This summary encapsulates the critical insights from the conference call regarding the clinical CRO industry in China and the financial outlook for Hangzhou Tigermed Consulting.

Summary of China Clinical CRO Expert Call Industry Overview - **Industry**: Clinical Contract Research Organizations (CROs) in China - **Key Company**: Tigermed Core Insights 1. **2026 Outlook**: The expert predicts a better outlook for 2026 for the Chinese CRO industry, with expectations of less fierce price competition and increased overseas pharmaceutical and biotech trials due to cost and speed advantages [1][2][3] 2. **Price Recovery**: Smaller CROs are struggling, leading to industry prices being 30-40% lower than in 2022. Leaders like Tigermed are expected to recover first, with a gradual price increase anticipated in 2026 [2][3] 3. **Client Demand**: Demand from multinational corporations (MNCs) and large domestic pharmaceutical companies remains resilient, with increasing demand from domestic biotech firms. A pickup in client demand was noted starting in July 2025 [3][4] 4. **FDA Concerns**: Despite concerns raised by the US FDA regarding the quality of Phase 3 trial data from China, the expert believes that Chinese data meets global standards, adhering to ICH guidelines [4][5] 5. **Global Attraction**: China is becoming a preferred location for overseas biotech companies to conduct clinical trials, particularly Phase I trials, due to its cost and operational speed advantages compared to the US, Europe, and Australia [5][7] 6. **AI Integration**: The integration of AI in clinical trials is expected to enhance efficiency by improving trial design, accelerating patient matching, and assisting with medical writing and translation [8] Additional Insights 1. **Global Expansion of Chinese CROs**: The expert suggests that Chinese CROs can expand globally through partnerships, acquisitions, and attracting overseas clients for early-phase trials in China [9] 2. **Cost Comparisons**: The expert highlighted significant cost advantages for conducting trials in China, with Phase I trials costing substantially less than in the US and Europe, and even higher disparities for certain conditions like ophthalmic diseases [7] 3. **Valuation of Tigermed**: The target price for Tigermed is set at Rmb67 based on an NPV-based SOTP valuation, with contributions from clinical trial solutions, laboratory services, and investment income [10][12] 4. **Risks**: Potential risks affecting Tigermed's share price include weaker-than-expected client orders, intense market competition, and margin pressures due to overseas expansion and AI investments [11][13] This summary encapsulates the key points discussed during the expert call, providing insights into the current state and future outlook of the Chinese CRO industry, particularly focusing on Tigermed.

Summary of Tigermed (3347.HK) Conference Call Company Overview - **Company**: Tigermed (3347.HK) - **Market Cap**: HK$36.9 billion / $4.7 billion - **Enterprise Value**: HK$40.4 billion / $5.2 billion - **Current Price**: HK$42.70 - **12-Month Price Target**: HK$62.10 (45.4% upside) for H shares; Rmb77.10 (41.9% upside) for A shares [1][6][19] Core Industry Insights - **Industry**: Clinical Contract Research Organization (CRO) in China - **Market Recovery**: Expected inflection point in late 2025 into 2026, driven by increased funding and demand for CRO services [2][20] - **Funding Growth**: Upfront payments from licensing deals reached US$4.6 billion YTD 2025, up 84% year-over-year; total funding via IPOs/FOs at US$13.0 billion, up 517% year-over-year [2][29][30] - **CRO Market Growth**: Anticipated 13% CAGR for the domestic market from 2025 to 2027, with a rising outsourcing rate expected to reach 44% in 2025 [2][22] Financial Performance and Projections - **Earnings Growth**: Tigermed expected to deliver a core earnings CAGR of 37% from 2025 to 2028, with mid-teen revenue growth anticipated [3][46] - **Revenue Estimates**: Projected revenues of Rmb6,747.3 million in 2025, Rmb7,732.5 million in 2026, and Rmb8,907.1 million in 2027 [6][17] - **EPS Growth**: EPS expected to grow from Rmb0.47 in 2024 to Rmb1.84 in 2027, reflecting a significant recovery from previous declines [12][17] Strategic Positioning - **Market Leadership**: Tigermed holds a 13% market share in the Chinese CRO sector, having supported 60% of Class I innovative drugs listed in China [39][45] - **Global Expansion**: The company is enhancing its international presence, particularly in the US, Australia, and Europe, to support both domestic and international clients [43] - **Service Capabilities**: Tigermed's comprehensive R&D service capabilities position it well to capture the anticipated recovery in demand from biotech and pharma clients [43] Risks and Challenges - **Market Risks**: Potential geopolitical and regulatory challenges, slower-than-expected demand recovery, and ongoing pressure from impairment [19] - **Pricing Dynamics**: Pricing stabilized after a significant drop in 2023-2024, but true margin comparability will not be evident until late 2026 [35] Additional Insights - **Order Intake**: New order intake showing signs of recovery, with a mid-teen percentage increase reported in early 2025 [21][46] - **Book-to-Bill Ratio**: Expected to recover to 1.5x in 2025 from 1.1x/1.3x in 2023/2024, indicating a positive outlook for future revenue growth [50][52] - **Consolidation Potential**: The CRO market in China is fragmented, suggesting opportunities for consolidation as firms pursue licensing and business development deals [39][40] This summary encapsulates the key points from the conference call regarding Tigermed's current position, industry dynamics, financial outlook, and strategic initiatives.

Summary of Clinical CRO Survey Industry Overview - The survey focuses on the Clinical Contract Research Organization (CRO) market, particularly assessing trends among large pharmaceutical companies and small to mid-sized biotech (SMID biotech) firms [7][8][11]. Key Takeaways 1. **Budget Outlook**: - Respondents expressed cautious views on near-term clinical trial budgets, with 73% indicating that budget cuts are "somewhat likely" or "very likely" in the next 6-12 months [9][10]. - For 2025, 37% expect clinical trial spending to grow by +1-5%, while 23% anticipate growth of +6-10% [9][12]. - In 2026, expectations improve, with 37% of respondents anticipating growth of +1-5% and another 37% expecting +6-10% growth [36][38]. 2. **Pipeline Rationalization**: - 67% of large pharma and 60% of SMID biotech respondents have undergone pipeline rationalization in the past 1-2 years, with further rationalization expected due to macroeconomic factors [9][10]. 3. **Cost-Effectiveness of Outsourcing**: - There is a split opinion on the cost-effectiveness of insourcing versus outsourcing clinical trial spending, with 53% of large pharma respondents favoring insourcing [17][18]. 4. **Price Sensitivity**: - Both large pharma and SMID biotech respondents indicated heightened price sensitivity, with 50% of large pharma ranking their sensitivity at 7/10 or 8/10, and 47% of SMID biotech respondents ranking it at 9/10 or 10/10 [9][17]. 5. **CRO Spending Dynamics**: - The majority of large pharma respondents indicated that IQV receives the largest percentage of their CRO budget, while SMID biotech firms primarily allocate their budget to PPD [18][19]. 6. **Long-Term Growth Expectations**: - Over the long term, 53% of total respondents expect clinical trial budgets to grow by +1-5%, while 30% anticipate growth of +6-10% [47][54]. Additional Insights - **Market Uncertainty**: Respondents cited market uncertainty and the need for cost savings as primary reasons for expected budget cuts [10][12]. - **FDA and Regulatory Concerns**: There is cautious sentiment regarding the impact of FDA turnover and pharma tariffs on R&D budgets [9][10]. - **Engagement with New Solutions**: PPD's new Accelerator Drug Development solution is still in early stages of customer engagement, with interest noted among respondents [18][19]. Conclusion The Clinical CRO market is currently facing a cautious outlook with anticipated budget cuts in the near term, but there is a more optimistic sentiment for growth in 2026. The dynamics of outsourcing versus insourcing, along with price sensitivity, will play crucial roles in shaping the spending behaviors of large pharma and SMID biotech firms moving forward.