Summary of Expert Call on China's Preclinical CRO Industry Industry Overview - The focus is on China's preclinical Contract Research Organization (CRO) industry, particularly a medium-sized private preclinical CRO firm - Notable recovery in the industry observed in Q425, with stronger trends noted in the second half of November [2][8] Key Insights Order Inflow and Growth Outlook - Order inflow for projects involving Non-Human Primates (NHP) increased approximately 30% quarter-over-quarter (QoQ) in volume terms in Q425, with service fees rising by 10-20% [2][8] - The expert anticipates sustained growth into 2026, primarily driven by improved funding and R&D demand from upstream R&D firms [2][8] NHP Pricing Dynamics - NHP prices rose about 25% QoQ in Q425, with average selling price (ASP) around Rmb130,000 [3][10] - For trials scheduled to start in Q126, prices have reached Rmb150,000 in some instances, indicating tight supply/demand dynamics [3][10] Supply Chain and Import Challenges - The supply of suitable NHPs remains tight, particularly for those aged over three years, with limited imports expected due to complex procedures [3][10] - The likelihood of exporting NHPs is low for the next three years, as they are considered a strategic resource for innovative drug R&D [3][10] Market Concentration and Competitive Landscape - The expert predicts increased concentration among the top 5-10 CRO firms due to their superior specialty and management capabilities [4][15] - Some small CRO firms are seeking qualifications to expand their capacities, but the number remains limited [4][13] Demand Recovery by Project Type - Demand for large molecules, particularly bispecific and trispecific antibodies, has recovered more robustly than for small molecules [9][8] - Innovative therapies such as peptides and CAR-T are also seeing increased demand, with tumors and autoimmunity being major therapeutic areas [9][8] Order Cancellation Trends - Order cancellations have become rare, indicating a more stable market environment [16][8] Financial Metrics - The total cost for a standard order of 64 NHPs is approximately Rmb130,000 multiplied by 64, with additional expenses around Rmb3-4 million [17][8] - Transaction prices typically range from 70-80% of quotations, reflecting a rebound in margins [17][8] Risks and Challenges - Potential risks for the healthcare industry include unexpected price cuts from government programs, intensified competition, and regulatory challenges [18][8] Conclusion - The preclinical CRO industry in China is experiencing a notable recovery, with positive trends expected to continue into 2026, driven by increased funding and demand for innovative therapies. However, challenges related to supply constraints and regulatory risks remain significant.

Company Overview - Medpace Holdings, Inc. is a global, full-service clinical research organization (CRO) that serves biotech, pharmaceutical, and medical device companies, known for its trusted execution and consistent delivery of results [2] - The company generates revenue through various services including clinical trial management, regulatory and medical affairs, laboratory and imaging services, and pharmacovigilance and data management [2] Business Model and Growth - Medpace focuses on mid-sized biotech and pharma clients, allowing it to differentiate through precise execution and a fully integrated, in-house service platform that ensures seamless delivery across all trial stages [3] - The company has a track record of consistent double-digit growth and strong margins, supported by operational efficiency and streamlined processes that minimize delays [3] - Medpace's holistic approach accelerates trial timelines, supports regulatory approvals, and helps bring innovative treatments to patients more quickly [4] Investment Thesis - The combination of high-quality execution, an integrated service offering, and a recurring demand model positions Medpace as a resilient and high-quality growth platform within the CRO industry, making it an attractive investment opportunity [4] - The stock has appreciated approximately 73% since a previous bullish thesis was published, indicating strong market performance and consistent growth [5] Market Position - Medpace is not among the 30 most popular stocks among hedge funds, with 42 hedge fund portfolios holding MEDP at the end of the second quarter, unchanged from the previous quarter [6]