Core Insights - The Chinese biopharmaceutical industry is experiencing a surge in performance, with 69.23% of 39 innovative drug companies reporting positive net profit growth in their semi-annual reports [1] - Six companies reported over 100% year-on-year growth in net profit, indicating strong development momentum in the sector [1] Company Performance - **Kexing Pharmaceutical** achieved the highest net profit growth at 576.45%, totaling 0.80 billion yuan, focusing on antiviral, oncology, and immunology treatments [1] - **Sanno Bio** reported a 308.29% increase in net profit, reaching 0.89 billion yuan, driven by significant growth in raw material drug sales [2][3] - **Jinkai Biotechnology** saw a 123.61% increase in net profit, providing custom development services for small molecule drugs [3] - **Wuxi AppTec** and **Hengrui Medicine** also ranked among the top three companies by revenue, with 207.99 billion yuan and 157.61 billion yuan respectively [4] Industry Trends - The industry is transitioning from an "investment phase" to a "harvest phase," indicating a recovery in profitability and a moderate expansion stage [4] - Recent policy measures from the National Healthcare Security Administration aim to support high-quality development in innovative drug research and market application [4] - Analysts predict that the innovative drug sector will continue to thrive, driven by efficiency and cost advantages in drug development [5]

Company Overview - Kexing Bio-Pharmaceutical Co., Ltd. is an innovative international biopharmaceutical company focused on the research, development, production, and sales of recombinant protein drugs and micro-ecological preparations, targeting areas such as antiviral, oncology, immunology, hematology, and degenerative diseases [4][9] - The company has established a national marketing network covering approximately 8,000 hospitals and has achieved market access and sales in over 70 countries, including the EU, Brazil, and Egypt [4][8] Financial Performance - For the first half of 2025, the company reported a revenue of approximately 700.46 million yuan, a decrease of 7.82% compared to the same period last year [2][3] - The total profit reached approximately 84.13 million yuan, representing a significant increase of 100.40% year-on-year [2][3] - The net profit attributable to shareholders was approximately 80.34 million yuan, a remarkable increase of 576.45% compared to the previous year [2][3] Key Financial Indicators - Basic earnings per share for the first half of 2025 were 0.41 yuan, up 578.63% from the previous year [3] - The weighted average return on equity was 4.80%, compared to 0.73% in the same period last year [3] - Research and development expenses accounted for 13.70% of revenue, an increase from 11.52% year-on-year [3] Business Model and Operations - The company employs a "sales-driven production and demand-based procurement" model, ensuring production aligns with sales forecasts [7][8] - Kexing Bio has a complete and controllable R&D, procurement, production, and marketing system, allowing for independent operations [7][8] Industry Context - The biopharmaceutical industry in China is undergoing significant transformation, with a shift towards innovation-driven growth supported by government policies and technological advancements [9] - The overall pharmaceutical manufacturing industry has seen a slight decline in revenue, but is expected to stabilize and recover as innovation policies take effect [9]

Core Viewpoint - Kexing Pharmaceutical (688136.SH) plans to sell its wholly-owned subsidiary, Shenzhen Tong'an Pharmaceutical Co., Ltd., for 15 million yuan to reduce management costs and improve asset operation efficiency [1][13]. Group 1: Company Performance - Kexing Pharmaceutical's stock price has doubled since the beginning of the year, with a significant increase of 156.50% from 21.86 yuan per share at the end of 2024 to 56.07 yuan on June 4 [6][10]. - The company reported a revenue of 14.07 billion yuan in 2024, an increase of 11.75% year-on-year, and achieved a net profit of 31 million yuan, marking a turnaround from previous losses [10][11]. - Despite the revenue growth, the company's R&D expenses significantly decreased to 168 million yuan in 2024, down 51.30% from the previous year [11][13]. Group 2: Shareholder Actions - The controlling shareholder, Shenzhen Keyi Pharmaceutical Holdings Co., Ltd., plans to reduce its stake by up to 3%, potentially cashing out over 336 million yuan based on the stock price at the time of the announcement [4][5]. - This is the first time since Kexing Pharmaceutical's IPO that the major shareholder has announced a reduction in holdings, raising market concerns about the intention behind the move [3][5]. Group 3: Market Reactions - Following the announcement of the major shareholder's reduction plan, Kexing Pharmaceutical's stock price fell to 50.95 yuan per share by June 12 [8]. - Market skepticism arose due to the significant stock price increase prior to the reduction announcement, with some investors questioning the motives behind the shareholder's decision [5][6].

Meeting Overview - The second meeting of the second supervisory board of the company was held on June 9, 2025, with all three supervisors present [2][3]. Resolution Summary - The supervisory board approved the proposal to transfer 100% equity of its wholly-owned subsidiary, Shenzhen Tong'an Pharmaceutical Co., Ltd., to Guangxi Drug Research Institute Co., Ltd. for a price of 15 million yuan [4][10]. - The board concluded that the transaction would enhance asset operation efficiency and is in line with the company's actual situation, with no harm to shareholders' interests [4][10]. Transaction Details - The transaction does not constitute a related party transaction or a major asset restructuring as defined by regulations, and there are no significant legal obstacles to its implementation [8][10]. - The transfer price of 15 million yuan was agreed upon based on voluntary and fair negotiations [14]. Subsidiary Overview - Shenzhen Tong'an Pharmaceutical has not conducted actual business in recent years and primarily holds approval numbers for 20 pharmaceutical products [13]. - The subsidiary's ownership is clear, with no encumbrances or legal issues affecting the transfer [13]. Financial Impact - The sale of the subsidiary is expected to increase the company's profit and cash flow in 2025, aligning with the company's strategic focus on the biopharmaceutical sector [21].

Core Viewpoint - The approval of the two biosimilar drugs, Deshu Single Antibody Injection, by the Macau Drug Regulatory Authority marks a significant milestone for the company, as it is the first major oncology drug from its collaborative products to gain market entry in the Hong Kong and Macau regions [1][2]. Group 1: Product Details - The two approved products are Deshu Single Antibody Injection in 60mg (brand name: Boyoubai) and 120mg (brand name: Boluoga), which are biosimilars of Prolia and Xgeva, respectively [1][2]. - Boyoubai is indicated for osteoporosis in postmenopausal women at high risk of fractures, while Boluoga is used for treating giant cell tumors of bone that cannot be surgically removed or where surgery may lead to severe functional impairment [2]. Group 2: Market Potential - The Chinese market for Deshu Single Antibody is projected to reach 3.741 billion yuan by 2025 and may exceed 10 billion yuan by 2030, driven by an aging population and increasing treatment rates [3]. - In Macau, the population aged 65 and above accounted for 13.66% in 2023, indicating a significant demand for treatments related to osteoporosis and cancer [3]. Group 3: International Strategy - The company has adopted a "global selection, global coverage" strategy, focusing on high-growth emerging markets and the EU, leveraging cost-effective high-end biosimilars [4]. - The establishment of local teams in various countries aims to enhance market responsiveness and competitiveness, facilitating the introduction of products into the European and American markets [4]. - The approval of Deshu Single Antibody in Macau, along with the existing product "Kuyang Capsule" in Hong Kong, enhances the company's market presence in the Guangdong-Hong Kong-Macau Greater Bay Area [4].

Investment Rating - The report maintains a "Buy" rating for the company, expecting the stock price to outperform the industry index by more than 15% in the next six months [4][17]. Core Insights - The company is experiencing rapid growth in overseas revenue, with a projected 61.96% year-on-year increase in overseas sales to approximately 224.37 million yuan in 2024, primarily driven by the sales growth of albumin paclitaxel in the EU [2]. - The company is actively pursuing an "internationalization" strategy, enhancing its overseas marketing structure and focusing on key disease areas, which has established it as a model for the domestic pharmaceutical industry's expansion abroad [2]. - The company has a strong pipeline of innovative drugs, particularly in oncology, immunology, and degenerative diseases, with several projects showing promising preclinical results and progressing towards clinical trials [3]. Financial Summary - The company is projected to achieve a revenue of 1.407 billion yuan in 2024, representing a year-on-year growth of 11.7%, and is expected to turn a profit with a net profit of 31 million yuan [1]. - The company's revenue is expected to grow significantly over the next few years, reaching 2.701 billion yuan by 2027, with a compound annual growth rate (CAGR) of 19.5% from 2024 to 2027 [1]. - The return on equity (ROE) is expected to improve from -12.0% in 2023 to 14.1% by 2027, indicating a recovery in profitability [1]. Market Position - The company has established a strong presence in over 40 emerging market countries, covering regions such as Central and South America, Southeast Asia, and the Middle East and North Africa [2]. - The company maintains leading market shares in several domestic products, including "Sai Ruojin" in the short-acting interferon market and "Lai Ting" in the infliximab market [8].