22 August 2025 | 9:07PM HKT In line with earlier profit alert, Pharmaron reported 2Q25 revenue of Rmb3.34bn, reflecting a robust +13.9% y/y increase, primarily supported by sustained momentum in CMC services (+17.4% y/y), and a sequential improvement of +7.9% q/q, driven by the solid growth in laboratory services (+9.6% q/q), particularly bioscience services. Adjusted net profit reached Rmb 406mn, +15.6% y/y and +16.3% q/q, with adjusted net margin improving to 12.2% from 11.3% in 1Q25, supported by margin ...

Core Insights - Sai Life Sciences Limited has received validation from the Science Based Targets initiative (SBTi) for its near-term greenhouse gas (GHG) emissions reduction targets, emphasizing its commitment to sustainability in the pharmaceutical value chain [1][2]. Sustainability Commitments - The company aims to reduce absolute scope 1 and 2 GHG emissions by 58.8% by FY2035 from a FY2024 base year [2]. - Additionally, it plans to cut scope 3 GHG emissions by 63.8% per INR value added within the same timeframe, covering various categories such as purchased goods and services, capital goods, and employee commuting [2]. Recent Achievements - Sai Life Sciences has made significant investments in its sustainability agenda, achieving 96% reliance on renewable energy in FY25 at its Bidar facility, which resulted in a reduction of 16,038 metric tons of CO₂ emissions [7]. - Currently, 54% of the company's total energy consumption comes from renewable sources, with a target of reaching 70% by FY27 and 80% by 2030 [7]. Strategic Partnerships - The company is collaborating with DHL GoGreen to reduce logistics-related emissions by 90% [7]. - It has also become the first India-headquartered company to join the Pharmaceutical Supply Chain Initiative (PSCI) [7]. Organizational Overview - Sai Life Sciences is a leading integrated contract research, development, and manufacturing organization (CRDMO) that collaborates with over 300 global pharmaceutical and biotech companies [4].

Financial Performance - In Q1 2025, the Company reported revenue of RMB 2,671 million, a decrease of 16.0% compared to RMB 3,099 million in Q1 2024 [10] - Net profit for Q1 2025 was RMB 231 million, down 32.5% from RMB 306 million in Q1 2024 [10] - Non-IFRS net profit slightly decreased by 3.1% to RMB 339 million from RMB 349 million in Q1 2024 [10] - Net operating cash flow was RMB 746 million, a decline of 14.4% from RMB 853 million in Q1 2024 [10] Revenue Composition - Revenue from China entities accounted for 88%, while overseas subsidiaries contributed 12% [12] - Laboratory services generated 60% of total revenue, followed by small molecule CDMO services at 22%, and clinical development services at 14% [12] - Revenue from the top 20 pharmaceutical customers grew by 29.1%, while revenue from other customers increased by 14.0% [12] Growth Rates - New purchase orders (POs) achieved over 10% year-on-year growth in Q1 2025 [10] - Revenue from China entities grew by 15.7%, while overseas subsidiaries saw an 18.3% increase [12] - North America revenue increased by 16.8%, and EU revenue grew by 26.6% [12] Cost and Margin Analysis - Gross margin for laboratory services improved to 45.5% in Q1 2025 from 44.1% in Q1 2024, reflecting a 1.4 percentage point increase [14] - Gross margin for small molecule CDMO services rose to 30.4%, up 2.5 percentage points from 27.9% in Q1 2024 [15] - Clinical development services in China achieved a gross margin of 11.8%, an increase of 2.5 percentage points from 9.3% in Q1 2024 [16] Future Outlook - The Company maintains a revenue growth guidance of 10-15% for 2025 [27] - Despite macroeconomic uncertainties, the Company believes in sustained industry development driven by healthcare demands and technological innovations [27]