Core Viewpoint - The company reported a significant decline in revenue and net profit for the first half of 2025, primarily due to strategic adjustments and the termination of a partnership with a U.S. skincare brand, while focusing on the commercialization of new products [1][2] Financial Performance - In 1H25, the company achieved revenue of 0.66 million yuan, a year-on-year decrease of 30.6% - The net profit attributable to the parent company was -2.39 million yuan, with adjusted net profit at -2.18 million yuan - The gross margin for 1H25 was 48.4%, down by 4.3 percentage points [1] Strategic Adjustments - The revenue decline was attributed to the company's decision to terminate its agency cooperation with the U.S. skincare brand OMA, reallocating resources to new products CU-40102 and CU-10201, which have received regulatory approval - The company is optimistic about accelerating revenue growth in the second half of the year as these core products move towards commercialization [1][2] Cost Management - The company has optimized its expenses, with sales, management, and R&D costs in 1H25 being 0.92 million, 0.64 million, and 0.79 million yuan respectively, showing year-on-year decreases of 11.4%, 5.0%, and 20.3% - The reduction in sales expenses is attributed to improved investment efficiency in multiple products and strategic marketing preparations for upcoming commercialized products [1] Product Pipeline and Future Outlook - The company has made significant progress in its hair and skin care business, with two key products expected to receive market approval in late 2024 and mid-2025 - The company anticipates that the commercialization of these products will enhance growth potential and contribute positively to financial performance [2] - Projections for net profit from 2025 to 2027 are -2.87 million, -1.00 million, and 1.35 million yuan respectively, maintaining a "buy" rating [2]

Core Viewpoint - The recent adjustment of the Hong Kong Stock Connect list has led to a significant impact on the stock price of Kedi-B (02487), which experienced a notable decline followed by a recovery, supported by strong financial performance and market sentiment towards its new product developments [1][3][6]. Stock Performance - Kedi-B's stock price fell by 20.60% over six trading days after being removed from the Hong Kong Stock Connect [1]. - Following a brief recovery, the stock saw a dramatic drop of 26.88% on April 7 due to market volatility, creating a potential buying opportunity [1]. - The stock hit a low of 3.64 HKD on April 9 but rebounded significantly, reaching a peak of 7.62 HKD by May 20, surpassing pre-removal levels [1][3]. Financial Performance - Kedi-B reported total revenue of approximately 280 million RMB for 2024, a year-on-year increase of about 103% [6][7]. - Gross profit for the same period was around 144 million RMB, reflecting a 102% increase year-on-year, while net loss narrowed by 77.91% to approximately 434 million RMB [6][7]. - The company achieved a gross margin of 51.3%, up from 50.6% in the previous year, driven by improved product lines and cost management [8]. Product Line and Market Strategy - The revenue growth was primarily attributed to increased sales of hair care and skincare products, with hair care revenue exceeding 160 million RMB and skincare revenue surpassing 110 million RMB [8]. - Kedi-B plans to enter a second growth phase in 2025 with three significant prescription drugs, including treatments for acne and hair loss, which are expected to drive future revenue growth [9]. - The company is also involved in the development of a botulinum toxin product, CU-20101, which has received approval in South Korea, showcasing its technical capabilities [10][12]. Market Context - The domestic medical aesthetics market is under pressure, with many companies reporting declines in Q1 2025, yet Kedi-B's stock performance indicates positive market sentiment towards its product developments [11]. - The botulinum toxin market in China is projected to reach 11.4 billion RMB by 2025, with a compound annual growth rate of 23.9% from 2020 to 2025, indicating strong growth potential [12][14]. - Kedi-B's entry into the botulinum toxin market, particularly with innovative product forms, positions it well against established competitors [14].