Core Viewpoint - Liaoning Chengda Biological Co., Ltd. has announced the termination of its "Hib vaccine" development, marking the sixth vaccine project termination this month, amidst increasing competition in the domestic vaccine market and challenges including declining core product revenues, a shrinking R&D pipeline, and three consecutive years of declining performance [1][7]. Strategic Shift - Chengda Biological has terminated six projects in January, shifting its R&D focus towards combination vaccines. The company raised net funds of 4.341 billion yuan during its 2021 IPO, planning to cover 20 sub-projects under "human vaccine R&D." However, as of October 31, 2025, only 482 million yuan has been invested, with recent terminations attributed to intense market competition, insufficient product differentiation, and unclear commercialization prospects for some projects [2][8]. - The company is reallocating resources towards high-value projects such as the "high-dose influenza virus split vaccine" and "high-priced pneumococcal polysaccharide conjugate vaccine," indicating a strategic shift from broad coverage to focused breakthroughs on products with higher market potential [2][8]. Core Product Pressure - Chengda Biological has heavily relied on its human rabies vaccine, which accounted for over 93% of total revenue from 2020 to 2023. However, its market share has plummeted from 73.08% in 2019 to 36.29% in 2024, while the product price has dropped significantly from 215.6 yuan per dose in 2020 to approximately 61.18 yuan in 2024 [3][9]. - The presence of 23 marketed human rabies vaccines and 19 in clinical stages has intensified competition, leading to widespread price-cutting strategies among companies. The risk of a single product structure, previously highlighted in the company's prospectus, is now materializing [3][9]. Financial Performance Decline - Chengda Biological's financial performance has deteriorated since 2022, with revenue dropping from 1.815 billion yuan in 2022 to 1.675 billion yuan in 2024, and net profit shrinking from 714 million yuan to 343 million yuan during the same period [4][10]. - In the first three quarters of 2025, the company reported a 15.88% year-on-year revenue decline and a significant 50.01% drop in net profit, attributing these changes to intensified competition in the domestic vaccine market [4][10]. Conclusion - Chengda Biological is currently facing pressures from stagnant growth of its flagship product, a strategic contraction in its R&D pipeline, and ongoing performance declines. The company's attempts to pivot towards combination vaccines and high-priced products in response to market challenges are fraught with uncertainty, making the success of new product development a key focus for investors [5][11].

Group 1 - The core viewpoint of the news is that Chengda Biological experienced a decline in stock price and trading volume, with significant financing activities indicating high investor interest despite recent financial challenges [1][2]. Group 2 - On December 23, Chengda Biological's stock fell by 0.84%, with a trading volume of 32.51 million yuan. The financing buy-in amount was 4.22 million yuan, while the financing repayment was 2.56 million yuan, resulting in a net financing buy of 1.67 million yuan [1]. - As of December 23, the total balance of margin trading for Chengda Biological was 272 million yuan, with the financing balance accounting for 2.51% of the circulating market value, indicating a high level compared to the past year [1]. - In terms of securities lending, on December 23, 5,971 shares were repaid, and 1,200 shares were sold short, with a selling amount of 31,100 yuan. The remaining short-selling volume was 43,300 shares, with a balance of 1.12 million yuan, also at a high level compared to the past year [1]. Group 3 - As of September 30, the number of shareholders for Chengda Biological was 24,300, a decrease of 4.17% from the previous period, while the average circulating shares per person increased by 4.36% to 17,147 shares [2]. - For the period from January to September 2025, Chengda Biological reported operating revenue of 1.096 billion yuan, a year-on-year decrease of 15.88%, and a net profit attributable to shareholders of 165 million yuan, down 50.01% year-on-year [2]. - Since its A-share listing, Chengda Biological has distributed a total of 1.492 billion yuan in dividends, with 1.075 billion yuan distributed over the past three years [2]. Group 4 - As of September 30, among the top ten circulating shareholders, Hong Kong Central Clearing Limited was the fourth largest with 1.9124 million shares, an increase of 9,100 shares from the previous period. Meanwhile, Southern CSI 1000 ETF held 1.9011 million shares, a decrease of 7,600 shares [2].

Core Viewpoint - Chengda Biological has terminated six vaccine research and development projects since early December, including five under the "Human Vaccine R&D Project" and one under the "Biotechnology Product R&D Production Base Project" due to market dynamics and technical feasibility assessments [1][2]. Group 1: Project Termination - The company announced the termination of the "b-type influenza Haemophilus influenzae type b conjugate vaccine" development project and five other sub-projects, including the pentavalent rotavirus vaccine, due to a lack of commercial viability and feasibility [1][2]. - The total planned investment for the "Human Vaccine R&D Project" was 837 million yuan, fully funded by raised capital, focusing on multi-valent and innovative vaccines [1]. Group 2: Market Competition - The pentavalent rotavirus vaccine, previously a key focus, faces intense competition with the successful launch of the world's first hexavalent rotavirus vaccine by China National Pharmaceutical Group, leading to a reassessment of its commercial potential [2]. - The domestic rabies vaccine market has become increasingly competitive, with 23 marketed products and 19 in clinical development, impacting Chengda Biological's market share significantly [3]. Group 3: Financial Performance - Chengda Biological's revenue has declined over the past three years, with reported revenues of 1.815 billion yuan, 1.750 billion yuan, and 1.675 billion yuan, reflecting year-on-year decreases of 13.08%, 3.58%, and 4.22% respectively [3]. - For the first three quarters of 2025, the company reported revenues of 1.096 billion yuan, a year-on-year decline of 15.88%, and a net profit of 165 million yuan, down 50.01% [4].

Core Viewpoint - Watson Bio has received a marketing authorization for its 13-valent pneumococcal polysaccharide conjugate vaccine from the Egyptian Drug Authority, marking a significant step in its international expansion efforts [1] Group 1: Company Developments - Watson Bio's vaccine products have been exported to over 24 countries and regions, with a total export volume exceeding 63 million doses [3] - The company has successfully entered new markets including Chile and Jordan for its 13-valent pneumococcal conjugate vaccine, and has also expanded its 23-valent pneumococcal polysaccharide vaccine to Chile, Mexico, and El Salvador [2] - Watson Bio has completed a localization project in Indonesia, beginning to export raw materials to local partners [2] Group 2: Industry Trends - Multiple vaccine companies are accelerating their global strategies, with significant partnerships and contracts being established, such as Beijing Kexing's $700 million deal with Brazil [2] - The overseas sales revenue of several vaccine companies has shown substantial growth, with Chengda Bio achieving a 26.96% increase and Wantai Bio seeing a 77.51% increase in overseas sales [3] - The vaccine industry is transitioning from scale expansion to innovation-driven growth, with supply-demand imbalances and homogenized competition posing short-term challenges, but long-term growth prospects remain positive [3]

Investment Rating - The report gives an "Accumulate" rating for the company, marking the first coverage [4]. Core Insights - The company has abundant cash reserves of 4.01 billion yuan and trading financial assets of 1.06 billion yuan, with a low debt ratio of 4.24%, providing solid support for innovation and development [2][33]. - The company is focusing on its core human vaccine business while extending its vision to innovative drugs and therapies, actively exploring investment and acquisition opportunities in the biopharmaceutical sector [2][33]. - The management is closely monitoring market dynamics and is committed to selecting new projects and businesses with investment value and growth potential to create a second growth curve for the company [2][33]. Financial Forecast and Valuation - The company is expected to achieve operating revenues of 1.348 billion, 1.418 billion, and 1.530 billion yuan from 2025 to 2027, with net profits of 200 million, 223 million, and 254 million yuan respectively, leading to EPS of 0.48, 0.53, and 0.61 yuan [2][41]. - The stock price corresponds to a PE ratio of 55 times for 2025 [2][41]. Company Overview - The company, established in 2002, is a leader in the domestic rabies vaccine market and the only provider of inactivated Japanese encephalitis vaccine in China, maintaining a leading market share since 2008 [13][27]. - The company has faced revenue fluctuations due to intensified competition in the domestic vaccine market, particularly affecting rabies vaccine sales [15][27]. - The company has maintained high R&D investment levels, which have impacted profits but have also led to a robust pipeline of products entering late-stage clinical trials [24][27]. Product Pipeline - The company has a clear product pipeline, with multiple products in late-stage clinical trials, including the human diploid rabies vaccine and various influenza vaccines [30][31]. - The company achieved a 100% pass rate for vaccine product approvals in the first half of 2025, reinforcing its market leadership [27][30]. Strategic Initiatives - The company is actively exploring AI applications in vaccine research and has established a partnership to create an "AI + Vaccine Research Joint Laboratory" [34]. - The management is focused on industry integration and external acquisition opportunities to enhance growth [2][33].

Core Viewpoint - Chengda Biological experienced a slight decline of 0.18% in stock price on October 24, with a trading volume of 50.58 million yuan, indicating a high level of market activity and investor interest [1] Financing Summary - On October 24, Chengda Biological had a financing buy-in amount of 7.48 million yuan and a financing repayment of 6.40 million yuan, resulting in a net financing buy of 1.08 million yuan [1] - As of October 24, the total financing and securities lending balance for Chengda Biological was 258 million yuan, with the financing balance at 257 million yuan, accounting for 2.26% of the circulating market value, which is above the 80th percentile of the past year [1] - The company repaid 2,400 shares in securities lending and sold 1,400 shares on October 24, with a selling amount of 38,300 yuan, while the securities lending balance was 1.0685 million yuan, exceeding the 90th percentile of the past year [1] Business Performance Summary - As of June 30, Chengda Biological had 25,300 shareholders, a decrease of 0.42% from the previous period, with an average of 16,431 circulating shares per person, an increase of 121.52% [2] - For the first half of 2025, the company reported an operating income of 707 million yuan, a year-on-year decrease of 19.75%, and a net profit attributable to the parent company of 122 million yuan, down 44.47% year-on-year [2] - Since its A-share listing, Chengda Biological has distributed a total of 1.492 billion yuan in dividends, with 1.075 billion yuan distributed over the past three years [2] Shareholding Structure Summary - As of June 30, 2025, the top ten circulating shareholders included Southern CSI 1000 ETF, which held 1.9087 million shares, an increase of 357,200 shares from the previous period [2] - Hong Kong Central Clearing Limited was the fifth largest circulating shareholder with 1.9033 million shares, a decrease of 509,000 shares [2] - Other notable changes included a decrease in holdings for Bosera SSE STAR 100 ETF and an increase for CSI 1000 ETF, indicating shifts in institutional investment [2]

Core Viewpoint - Chengda Biological (688739.SH) has signed a strategic cooperation agreement with the Institute of Microbiology, Chinese Academy of Sciences, focusing on emerging infectious diseases and vector-borne disease prevention [1][4]. Group 1: Strategic Cooperation - The strategic cooperation aims to accelerate the research and development of vaccines and biopharmaceuticals for emerging infectious diseases, enriching the company's innovation pipeline [4]. - The collaboration will enhance the core competitiveness in the field of infectious disease prevention, aligning with the company's long-term strategy of focusing on vaccines and expanding into biopharmaceuticals [4]. Group 2: Company Overview - Chengda Biological primarily engages in the research, production, and sales of human vaccines, with leading products including human rabies vaccine and inactivated Japanese encephalitis vaccine [4]. - The company has maintained a leading market share in the human rabies vaccine since 2008, and its inactivated Japanese encephalitis vaccine is currently the only one available in the domestic market [4]. Group 3: Recent Achievements - In the first half of 2025, the company achieved a 100% approval rate for vaccine product batch releases, with 189 batches of human rabies vaccine approved, totaling 4.17 million doses, a year-on-year increase of 82% [4]. - The inactivated Japanese encephalitis vaccine received 15 batches of approvals, ensuring stable supply for sales [4]. Group 4: International Expansion - Chengda Biological is actively pursuing an international market strategy, enhancing cooperation with distributors in Egypt, Thailand, and Bangladesh, and successfully gaining market access in Indonesia [5]. - In the first half of 2025, the company reported overseas revenue of 123 million yuan, a year-on-year increase of 26.96% [5]. Group 5: Technological Innovation - In July, the company signed a cooperation agreement with Zhongke Zidong Taichu Technology Co., Ltd. to establish an "AI + Vaccine R&D Joint Laboratory," aiming to leverage AI technology for upgrading research paradigms [5]. - The company plans to continue focusing on human vaccines while exploring innovative drugs and therapies, actively seeking investment opportunities in new projects and businesses to create a second growth curve [5].

Core Viewpoint - The strategic cooperation agreement between Chengda Biological and the Institute of Microbiology focuses on addressing emerging infectious diseases, particularly vector-borne diseases, through joint research and project applications for national and provincial funding [1][2][4]. Company Overview - Chengda Biological is a biopharmaceutical company specializing in the research, production, and sales of human vaccines, with a leading market position in rabies and Japanese encephalitis vaccines in China [1]. - The company has established production bases in Shenyang and Benxi, and has a dedicated R&D team of over 200 personnel, with independent research capabilities and a comprehensive management system [1]. Research Collaboration - The collaboration aims to leverage the strengths of both parties, combining the Institute's research capabilities with Chengda's development and production resources to enhance vaccine and biopharmaceutical research [2][4]. - The focus will be on joint applications for national and provincial research projects to secure government support and resources, fostering innovation and high-quality industrial development [2][3]. Strategic Goals - The partnership is expected to accelerate the development of vaccines and biopharmaceuticals for emerging infectious diseases, enriching Chengda's innovation pipeline and strengthening its core competitiveness in the field of infectious disease prevention [4]. - The agreement is characterized as an intention-based collaboration, with no immediate impact on the company's financial performance for 2025, as the effects will depend on the progress of specific projects [4].

Core Viewpoint - Chengda Biotech is focusing on the development, production, and sales of human vaccines, with a strong market presence in rabies and encephalitis vaccines, while also expanding its international business and exploring innovative technologies [1][2][3] Group 1: Company Overview - Chengda Biotech specializes in human vaccine research and production, with significant products including rabies and inactivated encephalitis vaccines [1] - The company has established production bases in Shenyang and Benxi, and has a dedicated R&D team of over 200 personnel [1] - Chengda Biotech's rabies vaccine has maintained a leading position in the domestic market since 2008, and it is the only provider of inactivated encephalitis vaccine in China [1] Group 2: Financial Performance - In the first half of 2025, the company reported revenue of 707 million yuan, a year-on-year decrease of 19.75% [1] - Total profit for the same period was 146 million yuan, down 46.37%, while net profit attributable to shareholders was 122 million yuan, a decline of 44.47% [1] Group 3: Governance and Strategic Initiatives - In February 2025, the company underwent a significant governance restructuring, changing its controlling shareholder to Shaoguan Gaoteng, which has no actual controller [2] - This governance change aims to enhance decision-making efficiency and market operations, while also exploring mergers and acquisitions for growth [2] Group 4: International Expansion - Chengda Biotech's international business has shown strong performance, with rabies vaccine sales increasing and market access expanded to over 30 countries, including new entry into Indonesia [2] - The company is actively pursuing market opportunities in countries along the Belt and Road Initiative, such as Brazil [2] Group 5: R&D and Innovation - The company has made significant progress in R&D, with several products at critical stages, including the human diploid rabies vaccine and various flu vaccines [3] - Chengda Biotech has established an "AI + Vaccine R&D Joint Laboratory" in collaboration with Zhongke Zhidong Taichu to explore deep applications of AI technology [3] - The marketing strategy for the inactivated encephalitis vaccine has shown effectiveness, with increased coverage and penetration in vaccination endpoints [3]

Core Insights - In 2024, China reported 170 cases of rabies, a decline of over 95% from the historical peak, indicating significant progress in disease prevention [4] - Despite the decrease in rabies cases, the number of rabies vaccinations administered has increased sharply, highlighting a disparity between disease incidence and vaccination practices [5][6] - The high fatality rate of rabies, nearly 100%, and the lack of effective treatment drive the public's awareness and demand for vaccinations [6][9] Vaccination Statistics - China consumes over 80% of the global human rabies vaccine supply, with more than 50 million doses issued annually and over 10 million people vaccinated each year [2] - The market for rabies vaccines in China grew from 3 billion yuan in 2016 to 5.3 billion yuan in 2021, with projections to reach 10.1 billion yuan by 2026 [2] Vaccination Challenges - The vaccination process is complex, requiring 4 to 5 doses within a month, leading to high costs that can exceed 1,000 yuan for a complete course [13][15] - A study covering 2 million patients revealed that only 87% sought treatment within 24 hours after exposure, and only 72% received proper care, indicating gaps in vaccination adherence [10] Market Dynamics - The rabies vaccine market in China is becoming increasingly competitive, with 23 types of human rabies vaccines available and 19 more in clinical development [18] - Leading company Chengda Biologics has seen its market share decline from over 70% to less than 40% by 2024, as new entrants capture market share [20] Pricing Trends - The price of rabies vaccines has increased significantly, with newer generation vaccines costing over 300 yuan per dose, leading to a total cost of approximately 1,500 yuan for a complete vaccination course [15] - Recently, Hualan Vaccine reduced the price of its freeze-dried rabies vaccine to 127 yuan in Wuhan, marking a 38% decrease [22] Animal Vaccination Insights - The vaccination rates for pets remain low, with only 33.5% of dogs and 35.9% of cats receiving preventive care, indicating a need for improved vaccination strategies [33] - The current focus on human rabies vaccinations may lead to a neglect of animal vaccination, particularly among stray and free-roaming dogs, which are critical in the rabies transmission chain [36]