Core Viewpoint - The company, Borui Pharmaceutical, plans to issue H-shares and list on the Hong Kong Stock Exchange to accelerate its international strategy, enhance overseas financing capabilities, and improve its capital strength and competitiveness [1][4]. Financial Performance - In the first half of 2025, the company's revenue was approximately 537.44 million, a decrease of 18.28% year-on-year, while net profit dropped by 83.85% to 17.17 million [2][4]. - The company has faced a continuous decline in net profit, with a decrease of 15.51% in 2023 and 6.57% in 2024 [4][6]. - The core raw material drug business, which contributed over 75% of revenue, saw a revenue decline of 19.30% in the first half of 2025 [6][8]. Business Challenges - The company is undergoing a painful transition from a raw material drug-focused model to a dual-track model that includes innovative drugs, leading to sustained pressure on performance [4][6]. - Key products in the antiviral and antifungal categories have experienced significant revenue declines due to market competition and changing demand [6][8]. - The company's cash flow from operating activities decreased by 24.87%, indicating weakened self-sustaining capabilities [8][9]. R&D and Investment - R&D expenses reached 348 million in the first half of 2025, a 144.07% increase year-on-year, accounting for 64.83% of revenue [9][10]. - The company is heavily investing in innovative drugs, particularly the GLP-1/GIP dual-target drug BGM0504, which has potential but requires significant resources [9][10]. - The company has also faced increased depreciation pressure due to fixed asset growth, which has further eroded profits [10][11]. Strategic Moves - The H-share issuance is seen as a critical move to alleviate short-term debt pressure and lower financial leverage, while also funding upgrades in core raw material drug technology and expanding the innovative drug pipeline [1][4][11]. - The actual controller of the company has fully subscribed to the capital increase at a price of 22.36 per share, with the stock price rising to 59.8 per share by September 30, indicating a significant paper profit [11].

Core Viewpoint - The company, Borui Pharmaceutical, plans to issue H-shares and list on the Hong Kong Stock Exchange to accelerate its international strategy, enhance overseas financing capabilities, and improve its capital strength and competitiveness [1][4]. Financial Performance - In the first half of 2025, the company's revenue was approximately 537.44 million, a decrease of 18.28% year-on-year, while net profit dropped by 83.85% to 17.17 million [3][4]. - The company has faced a continuous decline in revenue and net profit since 2022, with a significant drop in core raw material drug business and ongoing challenges in its innovative drug pipeline [4][5]. Business Challenges - The raw material drug business, which contributes over 75% of revenue, has seen a revenue decline of 19.30% year-on-year, leading to overall performance pressure [6][8]. - Key products, particularly antiviral and antifungal raw materials, have experienced sharp revenue declines due to market competition and changing demand trends [5][6]. R&D and Financial Strain - R&D expenses surged to 348 million in the first half of 2025, representing 64.83% of revenue, indicating a heavy investment in innovation at the cost of cash flow [9][10]. - The company is under significant cash flow pressure, with net cash flow from operating activities down 24.87% and cash reserves reduced by 22.46% year-on-year [8][9]. Strategic Moves - The H-share issuance is seen as a critical step to alleviate short-term debt pressure and support the transition from a raw material-focused business to an innovation-driven model [11][12]. - The funds raised will be directed towards upgrading core raw material business technology and expanding the innovative drug pipeline, aiming for a dual goal of optimizing capital structure and upgrading business structure [11].