Core Viewpoint - The company is expected to return to a growth trajectory in 2025, driven by the recovery in demand from pharmaceutical clients and the domestic supply chain for insulin and GLP-1, maintaining a "Buy" rating [1][4]. Financial Performance - In 1H25, the company reported revenue, net profit attributable to shareholders, and net profit excluding non-recurring items of 309 million, 44 million, and 35 million yuan respectively, representing year-on-year increases of 9%, 18%, and 42% [1]. - For 2Q25, the figures were 163 million, 25 million, and 21 million yuan, showing year-on-year changes of +4%, -4%, and 0% [1]. Product Development and Market Expansion - The pharmaceutical rubber stopper segment showed orderly recovery with a projected double-digit revenue growth for the full year, achieving 310 million yuan in 1H25, a 9% year-on-year increase, with a gross margin of 39.4% [1]. - The company has a robust pipeline with 1,674 and 1,528 authorized projects for film-coated and conventional stoppers respectively, indicating an 8% and 6% increase from the end of 2024 [1]. - The company is entering the domestic supply chain for insulin through cartridge components, with expected revenue contributions starting in 2025, including a significant order of 200 million piston components from Ganli Pharmaceutical [2]. Capacity Expansion Initiatives - The company is developing the "Qihang Workshop" to expand its product offerings, including insulin components and pre-filled components, with planned capacities of 1.5 billion piston caps and 10 million COC/COP components [3]. - The company is also relocating and expanding its Chongqing factory to accelerate the aluminum cap project and enhance production capacity in the western market [3]. Valuation and Target Price - The company has increased its capital expenditure assumptions, projecting net profits attributable to shareholders of 110 million, 130 million, and 160 million yuan for 2025-2027 [4]. - A price-to-earnings ratio of 60x is assigned for 2025, with a target price of 39.46 yuan, reflecting a premium due to ongoing order fulfillment and new market entries [4].

Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 39.46 [1][5]. Core Views - The company has shown steady growth in its main business, with a revenue increase of 9% year-on-year in the first half of 2025, and a significant profit increase of 18% for net profit attributable to the parent company [1][2]. - The recovery in demand from pharmaceutical clients is expected to help the company return to a growth trajectory in 2025, with the domestic supply chain for insulin and GLP-1 expected to provide revenue and profit elasticity [1][3]. - The company is expanding its production capacity and product offerings, including the development of insulin components and pre-filled components, which are anticipated to contribute to revenue growth [4][5]. Summary by Sections Financial Performance - In the first half of 2025, the company reported revenues of RMB 3.09 billion, net profit attributable to the parent company of RMB 0.44 billion, and a non-recurring net profit of RMB 0.35 billion, reflecting year-on-year increases of 9%, 18%, and 42% respectively [1][2]. - The gross margin for the pharmaceutical rubber stopper segment was 39.4%, remaining stable year-on-year, with conventional and coated stoppers showing revenue growth of 8% and 9% respectively [2]. Product Development and Market Expansion - The company is expected to gradually increase revenue contributions from cartridge components starting in 2025, with significant orders already secured [3]. - The establishment of the "Qihang Workshop" aims to develop insulin components and expand production capacity, particularly in the western market [4]. Future Projections - The company anticipates a revenue growth of 15-20% for pharmaceutical rubber stoppers in 2025, driven by the recovery in demand and the introduction of high-end orders [2]. - The projected net profit for 2025 is estimated at RMB 108.05 million, with a compound annual growth rate (CAGR) of 64% from 2025 to 2027 [11][13].