Core Viewpoint - CICC maintains "outperform" rating for CSPC Pharmaceutical Group (01093), highlighting improvements in the company's prescription drug business and strong growth in respiratory and cardiovascular sectors [1] Performance Summary - For the first three quarters of 2025, the company reported revenue of 19.891 billion yuan, a year-over-year decrease of 12.3%, and a net profit attributable to shareholders of 3.511 billion yuan, down 7.1% year-over-year. Adjusted net profit was 3.079 billion yuan, a decline of 23.0% year-over-year, aligning with CICC's expectations. In Q3 2025, revenue reached 6.618 billion yuan, showing a year-over-year increase of 3.4% and a quarter-over-quarter increase of 5.7%, indicating stabilization in performance. The prescription drug revenue in Q3 2025 was 5.202 billion yuan, with year-over-year growth of 1.6% and quarter-over-quarter growth of 9.6% [2] Business Segment Performance - In Q3 2025, revenue from various therapeutic areas included: - Neurological diseases: 1.914 billion yuan (YoY -4.2%) - Oncology: 594 million yuan (YoY -47.2%) - Anti-infection: 826 million yuan (YoY -8.6%) - Cardiovascular diseases: 474 million yuan (YoY +17.8%) - Respiratory diseases: 320 million yuan (YoY +72.7%) - Digestive system: 248 million yuan (YoY +13.7%) - Other areas: 362 million yuan (YoY +25.6%) - The company’s raw material drug revenue was 1.415 billion yuan, with a year-over-year increase of 10.5% and a quarter-over-quarter decrease of 6.4% [2] R&D Progress - The company is advancing its innovation-driven strategy, with significant progress in its small nucleic acid pipeline. Key projects include PCSK9, expected to enter Phase III by the end of 2025, and other clinical projects targeting chronic diseases such as blood lipid and blood pressure management. The company is also exploring targeted delivery for eye, lung, fat, and muscle diseases. Notable in-development products include anti-HER2 monoclonal antibodies and EGFR ADCs [3] Overseas Business Development - The company is enhancing its business development strategy and has established an international licensing platform. In the first three quarters of 2025, it achieved licensing revenue of 1.540 billion yuan. In Q3 2025, the company licensed SYH2086 (an oral small molecule GLP-1) to Madrigal Pharmaceuticals for global development and commercialization outside of China, which includes an upfront payment of 120 million USD and potential milestone payments of up to 1.955 billion USD, along with double-digit sales royalties. The company has additional innovative products in its pipeline that are expected to lead to further licensing opportunities and milestone revenue recognition [4] Profit Forecast and Valuation - Considering increased R&D investments, CICC has lowered its net profit forecasts for 2025 and 2026 by 12% and 15% to 4.760 billion yuan and 5.353 billion yuan, respectively. The current stock price corresponds to a price-to-earnings ratio of 17.1 times for 2025 and 15.0 times for 2026. The "outperform" rating is maintained, with a target price reduction of 15% to 11.00 HKD, reflecting a price-to-earnings ratio of 24.4 times and 21.4 times for 2025 and 2026, respectively, indicating a potential upside of 42.5% [5]

Core Viewpoint - Company maintains "outperforming the industry" rating for CSPC Pharmaceutical Group (01093), citing improvements in its prescription drug business and strong growth in respiratory and cardiovascular sectors [1] Performance Summary - Company reported 1-3Q25 revenue of 19.891 billion, down 12.3% YoY, and net profit attributable to shareholders of 3.511 billion, down 7.1% YoY, with adjusted net profit of 3.079 billion, down 23.0% YoY, aligning with expectations [1] - 3Q25 revenue reached 6.618 billion, showing a 3.4% YoY increase and a 5.7% QoQ increase, indicating stabilization in performance [1] - Prescription drug revenue in 3Q25 was 5.202 billion, with a YoY increase of 1.6% and a QoQ increase of 9.6% [1] - Breakdown of 3Q25 prescription drug revenue: - Neurological diseases: 1.914 billion (YoY -4.2%) - Oncology: 0.594 billion (YoY -47.2%) - Anti-infection: 0.826 billion (YoY -8.6%) - Cardiovascular: 0.474 billion (YoY +17.8%) - Respiratory: 0.320 billion (YoY +72.7%) - Digestive: 0.248 billion (YoY +13.7%) - Other fields: 0.362 billion (YoY +25.6%) [1] - Raw material drug revenue in 3Q25 was 1.415 billion, up 10.5% YoY but down 6.4% QoQ [1] R&D Summary - Company continues to drive innovation with ongoing development of its small nucleic acid pipeline, with PCSK9 expected to enter Phase III by the end of 2025 [2] - Other clinical projects include LPa, AGT, ANGPTL3, and C5, targeting key chronic diseases such as dyslipidemia and hypertension [2] - Company is also exploring targeted delivery for eye, lung, fat, and muscle applications [2] - Key pipeline products include Anlotinib (HER2 bispecific), SYS6010 (EGFR ADC), and SYS6091 (HER2 ADC), all progressing well [2] Overseas Business Development Summary - Company is enhancing its business development strategy and building an international licensing platform [3] - In 1-3Q25, the company achieved licensing revenue of 1.540 billion, with a significant deal involving the licensing of SYH2086 (oral small molecule GLP-1) to Madrigal Pharmaceuticals, including a $120 million upfront payment and potential milestones of up to $1.955 billion [3] - The company has several innovative products in its pipeline, such as EGFR ADC and SiRNA series, which are expected to lead to more licensing agreements and milestone revenue recognition [3] Profit Forecast and Valuation - Due to increased R&D investment, the company has lowered its net profit forecasts for 2025 and 2026 by 12% and 15% to 4.760 billion and 5.353 billion, respectively [4] - Current stock price corresponds to a P/E ratio of 17.1x for 2025 and 15.0x for 2026 [4] - The company maintains its outperforming rating while reducing the target price by 15% to HKD 11.00, reflecting a P/E of 24.4x and 21.4x for 2025 and 2026, respectively, indicating a potential upside of 42.5% [4]