Core Viewpoint - The company reported a stable revenue performance in 1H25, with a total revenue of HKD 6.1 billion (+1% YoY), while the net profit attributable to shareholders decreased by 25% YoY to HKD 1.17 billion, primarily due to the impact of centralized procurement [1] Group 1: Financial Performance - 1H25 revenue reached HKD 6.1 billion (+1% YoY), with revenue in RMB terms increasing by 13% YoY after excluding centralized procurement effects [1] - Net profit attributable to shareholders was HKD 1.17 billion (-25% YoY), while operating profit, excluding fair value changes from Telix, was HKD 1.02 billion (-5.9% YoY) [1] - The revenue from innovative and barrier products increased to 51% of total revenue in 1H25, up from 36.1% in 1H24 [1] Group 2: Sector Performance - The pharmaceutical technology segment achieved revenue of HKD 3.84 billion (+2.9% YoY), with respiratory and critical care revenue increasing by 9.9% YoY [2] - The ENT segment saw a revenue increase of 22.6% YoY, while the emergency segment's revenue decreased by 21.8% YoY [2] - The nuclear medicine segment reported revenue of HKD 422 million (+105.5% YoY), driven by rapid growth in Y90 microspheres [2] Group 3: Product Pipeline and Future Outlook - The company expects stable revenue in the pharmaceutical technology segment for 2025, with growth driven by new product integration and value extraction from existing products [1][2] - The Y90 microsphere therapy is anticipated to see increased penetration due to hospital access, new indications, and inclusion in commercial insurance [2] - The company aims to advance the STC3141 clinical trial in China and engage with the FDA for overseas development, highlighting the potential attractiveness of the drug for foreign pharmaceutical companies [3] Group 4: Profit Forecast and Valuation - The company forecasts net profits of HKD 2.1 billion, HKD 2.4 billion, and HKD 2.6 billion for 2025, 2026, and 2027 respectively, with adjustments made based on the nuclear medicine segment's R&D expenditure [3] - A target price of HKD 12.00 is set for 2025, based on a 20x PE ratio, aligning with comparable companies in the Hong Kong market [3]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 12.00 [1][5]. Core Views - The company reported a revenue of HKD 6.1 billion in 1H25, reflecting a 1% year-over-year increase, and a 25% decrease in net profit to HKD 1.17 billion [1]. - The revenue from innovative and barrier products increased to 51% in 1H25, up from 36.1% in 1H24, indicating a positive trend in product performance [1]. - The nuclear medicine segment showed significant growth, with revenue reaching HKD 422 million, a 105.5% year-over-year increase, driven by the rapid uptake of Y90 microspheres [3]. - The company expects stable operational profit in 2H25 due to a low base effect and continued growth in the pharmaceutical technology and nuclear medicine sectors [1][2]. Summary by Sections Pharmaceutical Technology - The pharmaceutical technology segment achieved revenue of HKD 3.84 billion in 1H25, a 2.9% year-over-year increase, with respiratory and critical care products growing by 9.9% [2]. - The company anticipates stabilization in revenue for 2025, driven by unique product advantages and the gradual clearing of procurement impacts [2]. Nuclear Medicine - The nuclear medicine segment's revenue surged to HKD 422 million in 1H25, primarily due to the rapid market penetration of Y90 microspheres [3]. - The company has a robust pipeline with 27 nuclear medicine projects, focusing on integrated tumor diagnosis and treatment [3]. R&D Pipeline - The STC3141 project is expected to progress to Phase III trials within the year, with promising data from Phase II trials [4]. - The company is also looking to enhance its product portfolio through potential business development opportunities [4]. Profit Forecast and Valuation - The company forecasts net profits of HKD 2.1 billion, HKD 2.4 billion, and HKD 2.6 billion for 2025, 2026, and 2027 respectively [5]. - The target price of HKD 12.00 is based on a 20x PE ratio for 2025, aligning with comparable companies in the Hong Kong market [5].

Investment Rating - The report initiates coverage on the company with a "Buy" rating and sets a target price of HKD 10.15, based on a 17x PE for 2025 [1][8][6]. Core Viewpoints - The company is positioned as a significant player in China's nuclear medicine industry, with a diversified portfolio across pharmaceutical technology, biotechnology, nuclear medicine, and cardiovascular precision intervention [1][5]. - The traditional business segments are expected to maintain steady growth, providing a solid foundation for future development [1][5]. - The nuclear medicine segment is anticipated to experience rapid revenue growth from 2025 to 2027, driven by the commercialization of Y90 microspheres and a robust pipeline of differentiated products focused on integrated tumor diagnosis and treatment [2][20]. Summary by Sections Nuclear Medicine - The company has a unique position in the nuclear medicine market with commercialized products and a differentiated pipeline. Revenue from this segment is expected to grow rapidly from 2025 to 2027, with Y90 microspheres projected to peak at over HKD 3 billion in sales [2][20]. - The low penetration rate of Y90 microspheres presents significant growth potential, supported by hospital access, new indications, and potential insurance coverage [2][21]. Pharmaceutical Technology - The pharmaceutical technology segment is projected to achieve a CAGR of approximately 7% from 2025 to 2027, driven by strong demand for exclusive products in respiratory and cardiovascular categories [3][21]. - The segment is expected to remain stable despite short-term fluctuations due to centralized procurement, with new acquisitions and self-research initiatives supporting growth [3][21]. Biotechnology - The biotechnology segment is expected to maintain steady revenue growth, benefiting from a leading market share in taurine and cysteine, with a nearly 50% global market share in taurine as of 2023 [4][21]. - The segment's performance is supported by stable market demand and the company's strong position in the amino acid market [4][21]. Financial Projections - The company forecasts a net profit of HKD 2.12 billion, HKD 2.33 billion, and HKD 2.68 billion for 2025, 2026, and 2027 respectively, reflecting year-on-year changes of -14%, +10%, and +15% [6][7]. - Revenue is expected to reach HKD 12.65 billion in 2025, with a growth rate of 8.63% year-on-year [7][6].