Group 1: Market Overview - Global risk appetite has significantly declined, leading to a synchronized drop in equity and commodity markets, with major stock indices experiencing widespread pullbacks, particularly in the technology sector [2][39] - The MSCI Global Index fell by 2.5%, with developed markets showing a pattern where frontier markets declined less than developed and emerging markets [4][40] - The VIX index and MOVE 5-day moving average have risen sharply, indicating increased market volatility [2][39] Group 2: Fixed Income - The credit bond market has seen a cooling in trading sentiment, with institutions adopting a more conservative approach, favoring short-term bonds over long-duration ones [2][10] - The yield curve for Chinese bonds has shifted upward, indicating a "bear steepening" trend, while U.S. bonds have shown a "bull steepening" trend with a downward shift in yields [5][41] Group 3: Commodity and Currency - Commodity indices such as South China and CRB have declined by 1.8% and 2.2% respectively, with only three out of thirteen major commodity futures recording price increases [6][42] - The U.S. dollar index has risen by 0.9%, surpassing 100, while the Japanese yen has depreciated by 1.2%, approaching the 160 mark against the dollar [6][42] Group 4: Steel Industry - The apparent demand for steel from the five major steel mills increased by 3.9% week-on-week, while production decreased by 1.9% [18][21] - The profitability of steel companies has declined, with the average gross profit per ton of rebar dropping by 20 yuan to 61 yuan [19][20] - The steel industry is expected to stabilize in demand, with supply contraction anticipated due to ongoing policies aimed at reducing production [21][22] Group 5: Construction Industry - The activation of the Tanzania-Zambia Railway project has been announced, which is expected to significantly enhance freight capacity and reduce transportation time [23][24] - The Chinese government is focusing on urban renewal initiatives to stimulate investment and consumption, which may positively impact the construction sector [24] Group 6: Pharmaceutical Industry - The company under review, Fangsheng Pharmaceutical, has a focus on innovative traditional Chinese medicine, with a projected EPS growth from 0.69 to 0.97 yuan from 2025 to 2027 [30][31] - The company has faced revenue declines due to policy impacts, with a 6.75% year-on-year decrease in industrial revenue for the first three quarters of 2025 [31][33] - Despite short-term challenges, the company has seen growth in cardiovascular products, indicating potential for recovery [31][33]

股票研究 /[Table_Date] 2025.11.24 聚焦中药创新，系列产品加速推广 方盛制药(603998) 方盛制药首次覆盖 | [姓名table_Authors] | 电话 | 邮箱 | 登记编号 | | --- | --- | --- | --- | | 张澄(分析师) | 010-58067988 | zhangcheng5@gtht.com | S0880525040130 | | 彭娉(分析师) | 021-23185619 | pengping@gtht.com | S0880525040080 | | 郑琴(分析师) | 021-23219808 | zhengqin@gtht.com | S0880525040108 | | 余文心(分析师) | 021-38676666 | yuwenxin@gtht.com | S0880525040111 | 本报告导读： 公司业务以中药创新药为核心，重点打造心脑血管、骨骼肌肉与儿童用药等多品类 产品系列矩阵，近年来医疗等非核心主业逐步剥离，重点产品集采后快速入院放量。 投资要点： | [Table_Finance] 财务摘要(百万元) | 2 ...

Investment Rating - The investment rating for Fangsheng Pharmaceutical (603998) is not explicitly stated in the provided documents, but the report indicates a positive outlook based on performance metrics and growth potential [1]. Core Insights - The company reported a total revenue of 1.253 billion yuan for the first three quarters of 2025, a year-on-year decrease of 7.02%, while the net profit attributable to shareholders increased by 17.6% to 268 million yuan [2]. - The growth in net profit is attributed to a decrease in expense ratios, with a notable reduction in sales and management expenses [3]. - The company has successfully commercialized two traditional Chinese medicine (TCM) products, with plans for further commercialization of new products, including a TCM for treating frequent tension-type headaches [3]. Financial Performance Summary - For 2025, the company is projected to achieve revenues of 1.740 billion yuan, a slight decrease of 2.1% year-on-year, with net profit expected to rise by 24.6% to 318 million yuan [5]. - The gross profit margin is forecasted to be 70.5% in 2025, with a net asset return (ROE) of 18.4% [4]. - Earnings per share (EPS) is projected to increase from 0.58 yuan in 2024 to 0.72 yuan in 2025, reflecting a positive growth trajectory [4]. Product and Market Development - The cardiovascular medication segment showed a revenue increase of 10.16% year-on-year in Q3 2025, driven by strong sales of specific products [3]. - The company has expanded its market presence for its pediatric cough syrup, covering over 320 public medical institutions and nearly 2000 in total [3]. - The newly approved TCM product, Yangxue Qufeng Zhitong Granules, is expected to become a significant profit driver if included in the national basic medical insurance directory [3].

Core Viewpoint - The company held a Q3 2025 performance briefing on October 24, 2025, to discuss its operational performance and address investor concerns [1] Group 1: Company Performance and Strategy - The company's respiratory medication revenue has decreased by nearly 60% year-on-year due to industry factors, prompting a strategic focus on expanding market coverage and enhancing brand awareness for key products [2] - The company has successfully expanded its pediatric cough syrup's market presence, covering over 2,000 public medical institutions, with significant progress in adult indications research [2] - The management plans to accelerate the development of innovative traditional Chinese medicine (TCM) products, aiming to establish a product matrix with annual sales of 300-500 million yuan for multiple products [3][4] Group 2: Product Development and Market Position - The company has received approval for its blood-nourishing pain relief granules but has not yet launched them in hospitals; it plans to consider OTC status for easier access [5] - The company is focusing on chronic disease areas such as orthopedics and cardiovascular health, with several innovative TCM projects in the pipeline, including clinical trials for various products [5] - The company aims to leverage historical opportunities in TCM development to enhance market coverage and brand building, fostering new profit growth points [5]

Core Viewpoint - The Chinese Medicine ETF (560080) has shown resilience despite a recent market downturn, with significant capital inflow and a leading position in its category [1][7]. Market Performance - The Chinese Medicine ETF (560080) experienced a nearly 1% decline after a significant opening drop, with a total trading volume exceeding 110 million yuan [1]. - The ETF has seen a net inflow of over 170 million yuan in the last 10 days, bringing its total size to nearly 2.4 billion yuan, leading its peers [1]. Component Stocks - Most component stocks of the Chinese Medicine ETF (560080) closed in the red, with notable declines including Jilin Aodong (-1.44%), Yunnan Baiyao (-1.01%), and Dong'e Ejiao (-1.22%) [3][4]. Yearly Index Performance - The Chinese Medicine Index has shown negative returns year-to-date, with a decline of 3.27% this year and an 8.13% drop in 2024, marking a four-year streak of negative annual performance [4]. Valuation Metrics - The TTM price-to-earnings ratio for the Chinese Medicine ETF (560080) stands at 25.11, which is at the 22.28% percentile of the past decade, indicating a more favorable valuation [6]. Leverage and Financing - Financing activities remain robust, with the latest financing balance for the ETF exceeding 84 million yuan, maintaining historical highs [7]. Industry Outlook - According to CITIC Securities, channel adjustments in the Chinese medicine sector are nearing completion, with expectations for demand recovery in the fourth quarter [9]. - The demand for traditional Chinese medicine products is anticipated to stabilize, with a gradual recovery expected as external pressures ease [9]. New Drug Developments - The number of new drug applications in the Chinese medicine sector is on the rise, with 92 new IND applications and 42 NDA applications reported in the first nine months of 2025 [10][12]. - Recent approvals for new drugs from companies like Fangsheng Pharmaceutical and Tianzhihui are expected to contribute positively to their growth [12].

Core Viewpoint - The biopharmaceutical industry is a key sector in the new global technological revolution and competition, with Huangpu District in Guangzhou transforming from a "follower" to a "leader" in this field, showcasing China's robust capabilities in biopharmaceutical innovation [1][4]. Industry Overview - The biopharmaceutical industry in Huangpu has grown to a scale exceeding 240 billion yuan, with over 4,800 enterprises, and the traditional Chinese medicine (TCM) sector is projected to reach an industrial output value of 5.2 billion yuan by 2024 [3][4]. - Huangpu has a total of 1,243 TCM product approvals, accounting for 37% of the city and 11% of the province, indicating a strong foundation for innovation [4]. Development Initiatives - Huangpu has launched the "1369 Project" to promote the integration of TCM with modern medical practices and industry, aiming to create a model for TCM innovation and development [5][12]. - The district is focusing on the dual development of TCM and intelligent medical equipment, with significant government support for projects that enhance TCM's industrialization and modernization [5][10]. Talent and Education - Huangpu is implementing a "Pu Ju Ming TCM" initiative to attract renowned TCM practitioners and establish a mentorship system to cultivate a new generation of TCM professionals [12][13]. - The district is also fostering interdisciplinary talent that combines traditional medical knowledge with modern technological skills, essential for advancing TCM practices [13][14]. Technological Integration - The integration of artificial intelligence (AI) in TCM is being explored, with the development of intelligent diagnostic tools and treatment systems, which are expected to revolutionize the industry [10][11]. - Huangpu has established a collaborative framework for TCM research and development, focusing on the commercialization of traditional formulations and enhancing the efficiency of new drug development [6][9]. Market Trends - There is a growing demand for TCM services, with 40% of patients in Huangpu opting for TCM treatments, reflecting a robust and efficient service system [12][14]. - The district is actively working to improve the conversion efficiency of hospital-based formulations into marketable TCM products, leveraging local enterprises for innovation [9][14].

Investment Rating - The investment rating for the company is "Buy-A" with a 6-month target price of 13.97 CNY, compared to the current stock price of 11.37 CNY [4]. Core Insights - The company reported a revenue of 834 million CNY in H1 2025, a year-on-year decrease of 8.35%, while the net profit attributable to shareholders increased by 23.67% to 169 million CNY [1]. - The growth in net profit is attributed to the strong performance of cardiovascular drugs, which saw a revenue increase of 16.05% to 276 million CNY, driven by a 20% increase in sales of specific products [2]. - The company is successfully expanding its market for innovative traditional Chinese medicine (TCM) products, with significant coverage achieved in public medical institutions [3]. Financial Performance - In H1 2025, the company's main pharmaceutical business generated 768 million CNY in revenue, a decrease of 8.20% year-on-year [2]. - The company expects revenue growth rates of 3.3%, 11.5%, and 11.7% for 2025 to 2027, with net profit growth rates of 20.2%, 20.3%, and 20.0% respectively [7]. - The projected earnings per share (EPS) for 2025 is 0.70 CNY, with a price-to-earnings (P/E) ratio of 16.3 [9]. Market Expansion and Innovation - The company has made significant progress in the market expansion of its innovative TCM products, with over 1,800 public medical institutions covered for its children's cough syrup and over 1,500 for its bone health product [3]. - The approval of a new TCM product for treating frequent tension-type headaches is expected to provide a new profit growth point if it is included in the national basic medical insurance directory [3][7].

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company's performance in H1 2025 met expectations, driven by innovative traditional Chinese medicine, which is expected to support long-term growth [5] - The company reported a revenue of 834 million yuan in H1 2025, a year-on-year decline of 8.35%, while the net profit attributable to shareholders was 169 million yuan, a year-on-year increase of 23.67% [8] - The company is focusing on its pharmaceutical industrial sector, with a revenue of 768 million yuan from this segment, down 8.2% year-on-year [8] - Innovative traditional Chinese medicine is becoming a new profit growth point, with three innovative traditional Chinese medicine products approved [8] - The company is increasing its R&D investment, with R&D expenses reaching 68.09 million yuan in H1 2025, a year-on-year increase of 10.98% [8] Financial Summary - Revenue projections for the company are as follows: 1,629 million yuan in 2023, 1,777 million yuan in 2024, 1,749 million yuan in 2025E, 1,890 million yuan in 2026E, and 2,124 million yuan in 2027E [6] - The net profit attributable to shareholders is projected to be 187 million yuan in 2023, 255 million yuan in 2024, 342 million yuan in 2025E, 394 million yuan in 2026E, and 455 million yuan in 2027E [6] - The company’s earnings per share (EPS) is expected to grow from 0.43 yuan in 2023 to 1.04 yuan in 2027 [6] - The projected price-to-earnings (P/E) ratios are 26.72 for 2023, 19.56 for 2024, 14.58 for 2025E, 12.68 for 2026E, and 10.98 for 2027E [6]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company achieved a revenue of 834 million yuan in H1 2025, a year-on-year decrease of 8.35%, while the net profit attributable to the parent company increased by 23.67% to 169 million yuan [4] - The company maintains a strong focus on innovative traditional Chinese medicine, which is expected to enhance its long-term competitive edge [4] - The forecast for net profit attributable to the parent company for 2025-2027 is 308 million, 378 million, and 457 million yuan respectively, with corresponding EPS of 0.70, 0.86, and 1.04 yuan [4] Financial Performance Summary - In H1 2025, the gross profit margin was 70.30%, a decrease of 2.36 percentage points, while the net profit margin increased by 5.06 percentage points to 19.96% [4] - The sales expense ratio decreased by 8.21 percentage points to 33.58%, while the R&D expense ratio increased by 1.42 percentage points to 8.16% [4] - The company reported a significant increase in revenue from cardiovascular drugs, which reached 276 million yuan, up 16.05% [5] Product Development and Innovation - The company plans to acquire the patent rights for a Class 1 innovative chemical drug, IMM-H024, for 80 million yuan, which is expected to strengthen its innovative drug pipeline [6] - The "Yangxue Qufeng Zhitong Granules" is the company's third innovative traditional Chinese medicine product, which has passed preliminary review for inclusion in the national basic medical insurance directory [6]

Core Insights - The Guangdong province is experiencing a surge in biopharmaceutical innovation, with numerous companies achieving breakthroughs in research and moving towards marketization and industrialization [2][3][4]. Group 1: Innovation Achievements - Guangzhou Lupu Pharmaceutical's BTK inhibitor, Rocbrutinib, has had its new drug application accepted by the National Medical Products Administration (NMPA) and is undergoing priority review, potentially becoming the first domestic BTK inhibitor for treating mantle cell lymphoma [3]. - The innovative drug "Angladiwe" has been approved by the NMPA, marking it as the world's first targeted PB2 subunit flu drug, showcasing China's capability in leading drug development [4]. - In 2024, Guangdong has approved 19 innovative drugs and 14 innovative medical devices, representing a 173% and 156% increase compared to 2023, respectively [4]. Group 2: Policy and Industry Support - The rapid growth of Guangdong's biopharmaceutical industry is attributed to strong industrial foundations and unique competitive advantages, with an annual revenue growth rate exceeding 10% for large-scale biopharmaceutical enterprises [5]. - The Guangdong government is implementing reforms to accelerate the approval process for innovative drugs and medical devices, including a 50% reduction in the registration review time for second-class medical devices [6]. Group 3: Challenges and Recommendations - Despite the robust industry foundation, challenges such as insufficient strength of enterprises, an incomplete industrial support system, and a shortage of high-end talent persist [7]. - Recommendations include enhancing regional collaboration, optimizing tax incentives, and encouraging financial institutions to increase support for the biopharmaceutical sector to attract more social capital [7].