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.