Core Viewpoint - The report from Kaiyuan Securities highlights Health元's stable performance in H1 2025, with a slight increase in net profit and strong growth in various business segments [1] Financial Performance - Health元's net profit attributable to shareholders for H1 2025 reached 785 million yuan, reflecting a year-on-year increase of 1.10% [1] - The company's gross margin for H1 2025 was 62.21%, down by 1.10 percentage points, while the net profit margin improved to 22.33%, up by 1.73 percentage points [1] - In Q2 2025, the net profit attributable to shareholders was 349 million yuan, showing a year-on-year increase of 3.72% but a quarter-on-quarter decline of 19.88% [1] Business Segments - The collaboration across various business segments has been effective, with Lijun Group continuing to provide stable performance [1] - The impact of Lijun monoclonal antibody on the company's net profit has reduced losses by 62 million yuan compared to H1 2024 [1] - Sales of the drug 妥布霉素 in H1 2025 increased by 112% year-on-year, indicating strong growth [1] - The health products segment grew by 35% year-on-year, while the raw materials segment remained stable, with key product 7-ACA maintaining favorable pricing [1] - The price of meropenem raw materials has gradually stabilized after a decline [1] Future Outlook - The company is expected to maintain its innovative advantages in the respiratory sector, with projected net profits for 2025-2027 at 1.463 billion, 1.568 billion, and 1.715 billion yuan respectively [1] - Earnings per share (EPS) are forecasted to be 0.80, 0.86, and 0.94 yuan per share for the same period [1] - The current stock price corresponds to price-to-earnings (PE) ratios of 16.1, 15.0, and 13.7 times for 2025-2027 [1] - The rating for the stock is maintained as "Buy" [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a stable profit growth with an accelerated layout in innovative drugs, maintaining a "Buy" rating. In H1 2025, the company achieved revenue of 7.898 billion yuan (down 4.08% year-on-year) and a net profit attributable to shareholders of 785 million yuan (up 1.10%) [5][6] - The company has a strong focus on respiratory diseases, with over 10 innovative drugs in the pipeline, and is making significant progress in clinical trials for various treatments [6] Financial Summary - In H1 2025, the company's gross margin was 62.21% (down 1.10 percentage points), and the net profit margin was 22.33% (up 1.73 percentage points) [5] - The company expects net profits attributable to shareholders to be 1.463 billion yuan, 1.568 billion yuan, and 1.715 billion yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 0.80 yuan, 0.86 yuan, and 0.94 yuan per share [5][8] - The current stock price corresponds to a PE ratio of 16.1, 15.0, and 13.7 for the years 2025, 2026, and 2027 respectively [5] Research and Development - The company has made multiple breakthroughs in research and development, particularly in the respiratory field, with innovative drugs targeting COPD and influenza [6] - The company is advancing its clinical trials for various drugs, including a non-opioid pain relief medication, which aims to provide safer alternatives for pain management [6]

Group 1 - The article discusses the new policy issued by the National Healthcare Security Administration and the National Health Commission on July 1, 2025, aimed at supporting the high-quality development of innovative drugs in China, which is expected to transform China from a "generic drug powerhouse" to an "innovative drug stronghold" [4] - The policy includes a comprehensive support system covering research and development, market access, payment, and clinical application, which is anticipated to benefit leading innovative drug companies, specialized biotech firms, and the CXO industry chain [4] Group 2 - Akole's COC project has passed safety facility acceptance review and has officially entered the stable production phase, with successful product output, indicating resolution of previous batch stability issues [5] - Xingsen Technology reported a revenue of 5.817 billion yuan for 2024, a year-on-year increase of 8.53%, but faced a net loss of 198 million yuan [6] - Kuaishou's general merchandise sales maintained high growth during the 618 shopping festival, with the launch of a new recommendation system, OneRec, expected to accelerate advertising growth in the second half of 2025 [7] - Bosideng achieved a revenue of 25.9 billion yuan for the fiscal year ending March 2025, a year-on-year increase of 11.6%, with a net profit of 3.51 billion yuan, reflecting a solid performance despite weak demand [7] - New Dairy's strategy focuses on leveraging raw milk cost advantages and improving product structure to enhance profitability, with expectations of continued raw milk benefits and increased revenue from low-temperature products [8] - Health元's respiratory product sales declined to 1.097 billion yuan in 2024, a decrease of 36.98%, but is expected to recover in 2025 as negative factors dissipate and key products gradually ramp up [9]

Core Viewpoint - The article discusses the financial performance and strategic developments of a pharmaceutical company, highlighting fluctuations in revenue from inhalation products, rapid growth in health supplements and OTC products, and ongoing innovation in drug development [4][5][6]. Group 1: Inhalation Products - In 2024, the company's sales revenue from respiratory products was 1.097 billion yuan, a year-on-year decrease of 36.98% [4] - The decline in inhalation product revenue is attributed to slow sales growth of Tobramycin primarily from ICU departments, the impact of centralized procurement policies on Salbutamol, and a high base from respiratory disease prevalence in 2023 [4] - It is expected that as negative factors like centralized procurement fade, revenue from inhalation products will grow in 2025, driven by the gradual increase in sales of Tobramycin, Shulide, and TG-1000 [4] Group 2: Health Supplements and OTC Products - In 2024, the health supplement and OTC segment (excluding subsidiaries) achieved revenue of 0.697 billion yuan, representing a year-on-year growth of approximately 53.91% [5] - The growth in this segment is driven by effective use of new media channels such as Xiaohongshu, Douyin, and WeChat, leveraging influencer recommendations and health education to enhance brand visibility and sales [5] - The segment is expected to maintain a strong growth momentum in 2025-2026 [5] Group 3: R&D and Innovation - The company is advancing its strategy of "mechanism innovation + multi-indication coverage" in the innovative drug sector, focusing on areas like "anti-infection + respiratory + analgesia" [6] - The anti-influenza drug TG-1000 has been submitted for production and is expected to be approved for market launch in the second half of 2025, featuring a longer effective treatment period [6] - The company has received registration approvals for complex formulations, including the first domestic generics of Salmeterol/Fluticasone inhalation powder and Fluticasone propionate nebulized suspension [6] - The company is also progressing in clinical research for TSLP monoclonal antibodies and IL-4R monoclonal antibodies, which are in Phase II trials [6] - The diversification into innovative fields, such as the Nav1.8 sodium channel targeting peripheral nerve pain, is expected to enhance the company's value in chronic disease management [6]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected investment return exceeding the market benchmark by more than 15% over the next 6-12 months [6][15]. Core Insights - The company's inhalation formulation revenue has experienced fluctuations, with a reported sales revenue of 1.097 billion yuan in 2024, a year-on-year decline of 36.98%. This decline is attributed to slow sales growth of Tobramycin primarily from ICU departments, the impact of centralized procurement policies on Levosalbutamol, and a high base from the previous year due to respiratory disease outbreaks. However, it is anticipated that revenue will recover in 2025 as negative factors dissipate and products like Tobramycin, Shulide, and TG-1000 gradually gain market traction [2][3]. - The health products and OTC segments have shown rapid growth, achieving a revenue of 0.697 billion yuan in 2024, representing a year-on-year increase of approximately 53.91%. The company has effectively utilized new media channels such as Xiaohongshu, Douyin, and WeChat to enhance brand visibility and drive sales growth. The growth momentum in these segments is expected to continue into 2025-2026 [2][3]. - The company is actively investing in R&D and innovation, pursuing a strategy of "mechanism innovation + multi-indication coverage" in the field of innovative drugs. Key developments include the anticipated approval of the anti-influenza drug TG-1000 in the second half of 2025, the registration of complex formulations like Salmeterol and Fluticasone, and advancements in monoclonal antibodies targeting TSLP and IL-4R, which are currently in Phase II clinical trials [3][4]. Summary by Sections Revenue and Profit Forecast - The company is entering a transitional phase due to centralized procurement and has adjusted its net profit forecasts for 2025 and 2026 to 1.32 billion yuan and 1.51 billion yuan, respectively, down by 17.5% and 14.4% from previous estimates. A new forecast for 2027 projects a net profit of 1.665 billion yuan, with corresponding EPS of 0.72, 0.83, and 0.91 yuan for 2025-2027, and P/E ratios of 15, 13, and 12 times [4][5]. Financial Metrics - The company's revenue is projected to decline from 16.646 billion yuan in 2023 to 15.619 billion yuan in 2024, with a slight recovery to 15.76 billion yuan in 2025. The net profit is expected to decrease from 1.443 billion yuan in 2023 to 1.387 billion yuan in 2024, before further declining to 1.32 billion yuan in 2025 [5][10]. Profitability and Valuation - The report indicates a gross margin of 62.2% for 2023, with a slight increase to 62.8% by 2027. The EBITDA margin is projected to be around 28.8% in 2023, with a slight decline to 28.9% by 2027. The net profit margin is expected to improve from 8.7% in 2023 to 9.4% in 2027 [12][13].

Core Viewpoint - The core strategy of Haizheng Pharmaceutical is to return to the top tier of the domestic market by focusing on human medicine while developing animal medicine and health products as complementary wings [1] Group 1: Business Strategy and Development - Haizheng Pharmaceutical aims to establish a diversified development pattern with a focus on human medicine and two wings: animal medicine and health products [1] - The company has transformed its original raw material plant into a biopharmaceutical industrial park covering over 1,500 acres, encompassing high-end biopharmaceuticals, injectable and oral formulations, and export raw materials [1][3] - The company has been exporting raw materials to over 70 countries and regions since 1992, with more than 400 overseas clients, including major global pharmaceutical companies [3] Group 2: Production and Quality Control - Haizheng Pharmaceutical emphasizes the importance of high-quality raw materials, with production bases in Taizhou, Fuyang, and Nantong, featuring a complete production line with fermentation capacity of 17,000 cubic meters and synthesis capacity of 2,300 cubic meters [6] - The Fuyang base has established an international standard QEHS system and has successfully undertaken CMO orders from international giants like Merck and Codexis [6][12] - The company has passed inspections from various global regulatory bodies, including WHO, FDA, and EMA, demonstrating its commitment to quality [12] Group 3: Innovation and Product Development - The company has accelerated its transition from raw materials to formulation business, with its subsidiary Hanhui Pharmaceutical achieving significant sales growth [8][10] - Haizheng Pharmaceutical has developed its first-class innovative drug, Haibomab, which has enriched its product line [10] - The company has successfully completed technology transfers for several original products, filling gaps in domestic technology transfer for original products [10] Group 4: Animal Health Sector - The animal health sector is a key focus for Haizheng Pharmaceutical, leveraging its expertise in human medicine standards to create high-quality veterinary products [14] - The company has established a comprehensive product matrix covering pets, pigs, and ruminants, with a commitment to rigorous quality standards [15] - Haizheng Animal Health has achieved significant milestones, including the first domestic deworming drug with sales exceeding 100 million and successful market entries in countries like Vietnam [15]