Core Viewpoint - Kelong Pharmaceutical is a leading enterprise in the domestic large infusion industry, with strong R&D capabilities and a full industry chain advantage [1] Group 1: Business Performance - As of Q3 2025, Kelong Pharmaceutical reported revenue of 13.277 billion, ranking 5th in the industry, exceeding the industry average by 2.8 billion and the median by 0.838 billion, but lower than the top two competitors [2] - The net profit for the same period was 1.245 billion, ranking 9th in the industry, above the industry average of 299 million and the median of 78.29 million, but below the top two competitors [2] Group 2: Financial Ratios - Kelong Pharmaceutical's debt-to-asset ratio was 28.63% in Q3 2025, down from 31.68% year-on-year and below the industry average of 35.26%, indicating good solvency [3] - The gross profit margin for the same period was 47.89%, down from 52.51% year-on-year and below the industry average of 57.17%, suggesting a need for improvement in profitability [3] Group 3: Executive Compensation - Chairman Liu Gexin's salary decreased from 6.9 million in 2023 to 5.6 million in 2024, a reduction of 1.3 million [4] - General Manager Liu Sicong's salary remained stable at 4.8 million in 2024 [4] Group 4: Shareholder Information - As of September 30, 2025, the number of A-share shareholders increased by 8.35% to 37,100, while the average number of shares held per shareholder decreased by 7.70% [5] Group 5: Future Outlook - Kelong Pharmaceutical's H1 2025 performance showed a decline, with revenue of 9.083 billion, down 23.2% year-on-year, and net profit of 1.001 billion, down 44.41% [6] - The company expects revenues for 2025-2027 to be 17.886 billion, 20.569 billion, and 22.626 billion, with respective year-on-year changes of -18.0%, +15.0%, and +10.0% [6] - Net profits for the same period are projected to be 2.022 billion, 2.801 billion, and 3.204 billion, with year-on-year changes of -31.1%, +38.5%, and +14.4% [6] Group 6: Innovation and R&D - Kelong Pharmaceutical's innovative drugs are showing rapid sales growth, with the newly approved product contributing to sales [6] - The company has over 30 items in its innovative R&D pipeline, primarily focused on cancer treatment [6][7]

Core Viewpoint - The company reported a significant decline in revenue and net profit for the first half of 2025, with a focus on the challenges faced in its infusion, generic drugs, and raw materials segments, while highlighting growth opportunities from innovative product launches [1][2]. Revenue and Profit Summary - The company’s total revenue for the first half of 2025 was 9.083 billion yuan, a decrease of 23.2% year-on-year, with a net profit attributable to the parent company of 1.001 billion yuan, down 44.41% [1]. - In Q2 alone, revenue was 4.693 billion yuan, reflecting a year-on-year decline of 16.3%, and net profit was 416 million yuan, down 46.2% [1]. Business Segment Performance - **Infusion Segment**: Revenue was 3.750 billion yuan, a decline of 19.65% year-on-year. The company is transitioning to fully closed infusion systems, with the market share of closed infusion products increasing by 0.39 percentage points [2]. - **Non-Infusion Formulations**: Revenue reached 1.955 billion yuan, down 3.18% year-on-year. The sales of plastic water injections decreased by 11.96% due to reduced demand for glucose injections and the failure to win bids in national procurement [2]. - **Intermediate and Raw Materials**: Revenue from antibiotic intermediates and raw materials was 2.282 billion yuan, down 30.29% year-on-year, primarily due to market demand fluctuations [2]. International Business - The company achieved overseas revenue of 1.130 billion yuan, a decline of 39.69% year-on-year, mainly due to a decrease in overseas licensing income [3]. R&D and Innovation - The company is advancing its R&D pipeline with a dual focus on core business and innovative exploration. The innovative product Jiatailai has been launched, and further exploration for its use in treating various solid tumors is ongoing [3]. - Collaborations with Merck are progressing on 14 clinical studies for sac-TMT as a monotherapy or in combination with other drugs for multiple cancer types [3]. Investment Outlook - The company’s infusion and raw material intermediate businesses are expected to reach a bottom, with ongoing progress in the pipeline and accelerated sales of innovative products. Projected net profits for 2025-2027 are 1.675 billion, 2.248 billion, and 2.716 billion yuan, with year-on-year growth rates of -43%, 34%, and 21% respectively [4].

Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% in the next 6-12 months [5][13]. Core Insights - The company reported a revenue of 950 million yuan for the first half of 2025, with a net loss of 145 million yuan [2]. - The commercialization year has begun, with sales starting to ramp up. The company has three products approved for sale: Jiatailai (TROP2 ADC), Ketailai (PD-L1 monoclonal antibody), and Datailai (Cetuximab) [3]. - The company has a strong clinical pipeline, with Jiatailai's core clinical layout entering a harvest period, and several key indications in various stages of clinical trials [4]. Financial Performance - The company is expected to achieve revenues of 2.325 billion yuan, 3.668 billion yuan, and 5.352 billion yuan for the years 2025, 2026, and 2027 respectively, showing significant growth compared to previous forecasts [5]. - The projected net profit for 2027 is 380 million yuan, indicating a turnaround from previous losses [5]. - The revenue growth rates are projected at 20.29%, 57.74%, and 45.91% for the years 2025, 2026, and 2027 respectively [10]. Clinical Development - The company has a robust pipeline with several products in various stages of clinical development, including A166 (HER2 ADC) in NDA stage and A400 (RET inhibitor) in registration clinical stage [4]. - The company is expanding its market reach, with products already covering 30 provinces and over 2000 hospitals [3]. Market Potential - The inclusion of Jiatailai, Ketailai, and Datailai in the basic medical insurance directory is expected to accelerate sales growth [3]. - The market potential for TROP2 ADC in breast and lung cancer is significant, with comprehensive coverage of patients anticipated upon completion of ongoing clinical trials [3].

Core Viewpoint - Kolon Biotech-B (06990) reported a significant decline in revenue for the six months ending June 30, 2025, with a 31.3% year-on-year decrease, leading to a loss attributable to equity shareholders of RMB 145 million [1] Financial Performance - The company achieved revenue of RMB 950 million, down 31.3% year-on-year [1] - Research and development expenses amounted to RMB 612 million, a decrease of 6.3% year-on-year [1] - The loss attributable to equity shareholders was RMB 145 million, with a loss per share of RMB 0.64 [1] Product Development and Commercialization - The company has received marketing approvals for sac-TMT (Jiatailai), Tagolizumab (Ketailai), and Cetuximab N01 (Datailai) and has commenced commercialization [1] - The company anticipates launching Botuzumab (Shutailai) in the Chinese market in the second half of 2025, pending regulatory communication and approval [1] - Total commercial sales for the first half of 2025 reached RMB 309.8 million, with Jiatailai accounting for 97.6% of sales [1] Accounts Receivable Management - All accounts receivable from drug sales were collected within the payment period, indicating efficient and stable cash flow management [1]