Core Viewpoint - The company reported strong performance in 1H25, with revenue and net profit exceeding expectations due to recovery in core CDMO demand and stabilization of raw material prices [1][4]. Financial Performance - In 1H25, the company achieved revenue of 2.871 billion yuan, a year-on-year increase of 3.9%, and a net profit attributable to shareholders of 526 million yuan, up 10.7% year-on-year [1]. - For Q2 alone, revenue was 1.381 billion yuan, reflecting a year-on-year increase of 7.2% but a quarter-on-quarter decrease of 7.4; net profit for the quarter was 276 million yuan, up 15.7% year-on-year and 10.2% quarter-on-quarter [1]. Business Segments - The core CDMO business showed robust growth, generating revenue of 2.29 billion yuan in 1H25, a year-on-year increase of 16.3%, with a gross margin of 41.0% [2]. - The company has a healthy project pipeline, with 38 projects already on the market and 1,086 projects in various clinical phases [2]. - The raw material business generated revenue of 523 million yuan in 1H25, a year-on-year decline of 28.48%, but with a gross margin of 23.26%, which is an increase of 2.07 percentage points [3]. Strategic Developments - The company is actively building capabilities in peptide, conjugate, and small nucleic acid drug technologies, having onboarded over 20 new clients and completed more than 10 projects in 1H25 [2]. - The integration strategy of "raw materials + formulations" is ongoing, with 22 formulation projects, 8 of which have been approved and 9 submitted for approval as of 1H25 [3]. Profit Forecast and Valuation - Due to the recovery in CDMO demand and stabilization of raw material prices, the company has raised its net profit forecasts for 2025 and 2026 by 14.5% and 8.7% to 950 million yuan and 1.084 billion yuan, respectively [4]. - The target price has been increased by 43.6% to 22.40 yuan, corresponding to 21.0 times the 2025 P/E ratio and 18.4 times the 2026 P/E ratio, indicating a potential upside of 20.0% from the current stock price [4].