Core Viewpoint - Tianyu Co., Ltd. (300702.SZ) maintains a stable annual R&D investment of approximately 250-280 million yuan, with a shift in focus towards raw materials and CDMO R&D while decreasing investment in generic drug formulations [1] Group 1: R&D Investment - The company plans to keep its overall R&D investment steady at around 250-280 million yuan each year [1] - There is an increasing proportion of R&D investment allocated to raw materials and CDMO, while the investment in generic drug formulations is gradually declining [1] Group 2: Sales Expenses - The sales expenses for the formulation business are growing rapidly due to its fast development [1] - The company is enhancing its marketing management through the establishment of a digital system [1]

Core Insights - The recent research conducted by Jinbairong Investment Management highlights the positive performance of Jiuzhou Pharmaceutical's CDMO business, particularly in the U.S. market, with a significant increase in new orders [1] Company Overview - Jiuzhou Pharmaceutical's overseas revenue accounts for over 80%, primarily from Europe, with limited impact from tariffs on U.S. business [1] - The company has a high capacity utilization rate, with a gross margin of approximately 41% [1] - The company is experiencing rapid growth in the U.S. market, particularly with Biotech projects, and has a stable pricing environment for new orders [1] Business Development - The company is investing in emerging businesses, with new peptide production capacity expected to be operational by the end of October, and plans for commercializing small nucleic acids [1] - The domestic collaboration has been established early, while overseas partnerships with large pharmaceutical companies are more challenging [1] - The raw material prices are stable to rising, contributing to improved gross margins compared to the previous year [1] Capital Expenditure and Market Expansion - Capital expenditure plans include the construction of small molecule multifunctional workshops and peptide commercialization facilities domestically, with considerations for mergers and industry chain integration overseas [1] - The company is seeing positive momentum in the Japanese and Korean markets, with a research platform in Japan already in use [1] - Jiuzhou Pharmaceutical has introduced two new specialty raw material drug varieties and two generic drug formulations, with a total of 22 projects in its formulation pipeline [1]