Core Viewpoint - Haixi New Drug officially listed on the Hong Kong Stock Exchange on October 20, opening at HKD 102 per share, a rise of 18.06% from the issue price of HKD 86.4. The company's performance heavily relies on the national volume-based procurement (VBP) plan, with over 90% of revenue from this channel from 2022 to 2024, raising concerns about sustainability and profitability due to price pressures [2][6][8]. Revenue and Profitability - Revenue from Haixi New Drug is projected to be approximately RMB 212.5 million, RMB 316.6 million, and RMB 466.7 million for the years 2022, 2023, and 2024 respectively, with profits of about RMB 69.8 million, RMB 117.5 million, and RMB 136.1 million during the same period [4][6]. - The company faces significant price declines due to the VBP model, with the average price of its product Haihuaitong® dropping from RMB 3.56 to RMB 2.19, a decrease of 38.48%, and Anbili®'s price falling from RMB 1.16 to RMB 0.46 [6]. Dependency on Procurement - Haixi New Drug's revenue is highly dependent on a few products, with over 90% of revenue from procurement channels in 2022, 2023, and 2024. The two main products, Anbili® and Haihuaitong®, contributed 81.3%, 79.9%, and 72.2% of revenue respectively during these years [5][6]. - The procurement qualifications for Haihuaitong® and Anbili® will expire in 2025 and 2026 respectively, raising concerns about potential revenue disruptions if renewals are unsuccessful [6]. Innovation Pipeline - The company is attempting to pivot towards innovation with four drugs in the research pipeline targeting oncology, ophthalmology, and respiratory diseases. One notable drug, C019199, is in I/II clinical trials and aims to start a Phase III trial in late 2025 [7]. - However, the competition in the oncology space is intense, with several similar drugs already in development, posing risks to the success of Haixi's pipeline [7]. R&D Investment - R&D expenditures are expected to increase from RMB 34.82 million in 2022 to RMB 67.53 million in 2024, but this is still considered insufficient compared to the high costs associated with developing innovative drugs [7]. - The company needs to enhance its R&D efficiency and speed to compete effectively in the market [8].

Core Viewpoint - Haixi New Drug officially listed on the Hong Kong Stock Exchange on October 20, opening at HKD 102 per share, a rise of 18.06% from the issue price of HKD 86.4. The company's performance heavily relies on the national volume-based procurement (VBP) plan, with over 90% of revenue from this channel from 2022 to 2024, raising concerns about sustainability and profitability due to price pressures [1][5][6]. Group 1: Financial Performance - Revenue from 2022 to 2024 is projected to be approximately CNY 212.465 million, CNY 316.633 million, and CNY 466.683 million, respectively, with profits of about CNY 68.981 million, CNY 117.454 million, and CNY 136.079 million [4][5]. - The company’s net profit margin is expected to decline by 7.9 percentage points in 2024 compared to 2023, resulting in a net profit margin of 29.2% [5][6]. Group 2: Dependency on Procurement - Haixi New Drug's revenue is highly dependent on a few products, with over 90% of revenue from procurement channels in 2022, 2023, and 2024. The combined revenue contribution from Anbili® and Haihuitong® is 81.3%, 79.9%, and 72.2% for the respective years [5][6]. - The prices of key products have significantly decreased due to procurement, with Haihuitong® dropping from an average price of CNY 3.56 to CNY 2.19, a decline of 38.48% [5][6]. Group 3: Innovation Pipeline - The company is attempting to develop a "second growth curve" through its pipeline of innovative drugs, currently having four drugs in development targeting oncology, ophthalmology, and respiratory diseases [7][8]. - The innovative drug C019199 is in I/II clinical stages, with plans for a Phase III trial in late 2025, but faces intense competition from similar drugs globally [8]. - R&D expenditures are projected to increase from CNY 34.82 million in 2022 to CNY 67.525 million in 2024, but this may still be insufficient to support the high costs associated with innovative drug development [8][9]. Group 4: Market Perception and Challenges - The first-day performance of Haixi New Drug reflects short-term market recognition of its generics business and innovative drug potential, but long-term challenges include reducing reliance on procurement channels and accelerating the R&D process [9].

Core Viewpoint - HaiXi Pharmaceutical has successfully completed its IPO subscription, raising significant interest with an oversubscription of 3113 times the initial public offering amount, indicating strong market demand for its shares [1] Group 1: IPO Details - HaiXi Pharmaceutical's IPO took place from October 9 to 14, with a total of HKD 3.094 billion in margin loans borrowed by brokers [1] - The company plans to issue 11.5 million H-shares, with a public offering price range between HKD 69.88 and HKD 86.4, aiming to raise up to HKD 990 million [1] - The expected listing date is October 17, with Huatai International and China Merchants Jinling International serving as joint sponsors [1] Group 2: Business Overview - HaiXi Pharmaceutical is a commercial-stage pharmaceutical company engaged in research, development, production, and sales, with a pipeline of innovative drugs under development [1] - The company has a portfolio of generic drugs targeting various diseases, including gastrointestinal, cardiovascular, endocrine, neurological, and inflammatory diseases, with 15 generic drugs approved by the National Medical Products Administration [1] - Four of these generic drugs are included in the national volume-based procurement (VBP) program [1] Group 3: Innovative Drug Pipeline - The company's innovative drug pipeline includes a novel oncology drug and an oral medication for wet age-related macular degeneration (wAMD), diabetic macular edema (DME), and retinal vein occlusion (RVO) [2] - The fastest progressing drug in the pipeline is C019199, targeting osteosarcoma, which is set to enter Phase III trials in the second half of this year [2] Group 4: Financial Performance - The company's projected revenues for 2022, 2023, 2024, and the five months ending May 31, 2025, are RMB 212.5 million, RMB 316.6 million, RMB 466.7 million, and RMB 249.2 million, respectively [2] - Corresponding gross profits for the same periods are RMB 172.1 million, RMB 263.6 million, RMB 387.2 million, and RMB 209.3 million [2] Group 5: Use of Proceeds - Approximately 52% of the net proceeds from the fundraising will be allocated to ongoing research and development to advance the drug pipeline [3] - 23% will be used to enhance R&D capabilities and seek collaboration opportunities, while 8% will focus on improving commercialization capabilities and expanding market influence [3] - Additional allocations include 7% for optimizing R&D and production systems, and 10% for working capital and other general corporate purposes [3]

Core Viewpoint - Fujian Haixi New Drug Creation Co., Ltd. has passed the listing hearing on the Hong Kong Stock Exchange, with Huatai International and CMB International as joint sponsors [1] Company Overview - Haixi New Drug is a commercial-stage pharmaceutical company that integrates research and development, production, and sales capabilities, with a pipeline of innovative drugs under development [3] - The company has received approval from the National Medical Products Administration for 14 generic drugs and has established a pipeline of four innovative drugs [3] - The revenue during the track record period comes from 13 approved products, primarily in therapeutic areas that account for over 25% of China's total pharmaceutical sales in 2023 [3] Product Portfolio - The company employs a dual-track model, focusing on both generic drugs and innovative drugs in development [3] - The product portfolio includes approved generic drugs for digestive, cardiovascular, endocrine, neurological, and inflammatory diseases [3] - Four of the approved generic drugs are included in the National Volume-Based Procurement (VBP) program, contributing significantly to revenue [3] Financial Performance - Revenue figures for Haixi New Drug are as follows: approximately RMB 212 million in 2022, RMB 317 million in 2023, RMB 467 million in 2024, and RMB 249 million for the five months ending May 31, 2025 [7][8] - Profit figures for the same periods are approximately RMB 69 million, RMB 117 million, RMB 136 million, and RMB 90 million respectively [7][8] - The company’s major products include Anbili® (RMB 146 million revenue in 2024, 25.7% market share), Haihuaitong® (RMB 187 million revenue in 2024, 59.3% market share), and Ruian Tuo® (RMB 48 million revenue in 2024, 16.7% market share) [3][4]

Core Viewpoint - The trend of pharmaceutical companies seeking to list on the Hong Kong Stock Exchange continues, with HaiXi New Drug being a notable example, having submitted its application again after an initial attempt earlier in the year [1][2]. Company Overview - HaiXi New Drug is a commercial-stage pharmaceutical company with a diversified product portfolio and pipeline, having achieved significant growth compared to many peers still in clinical stages [1][2]. - The company has received approval for 14 generic drugs from the National Medical Products Administration and has four innovative drugs in its pipeline, positioning it as a major player in China's pharmaceutical industry [2][4]. Financial Performance - The company reported revenues of approximately 2.5 billion RMB over five months, with a significant portion of revenue coming from a major client [2][5]. - Revenue figures for the reporting period show a growth trend: 212 million RMB in 2022, 317 million RMB in 2023, and projected 467 million RMB in 2024, with profits also increasing correspondingly [5][6]. - The company heavily relies on a few major clients, with the top five clients contributing 71.7% to 85.1% of total revenue during the reporting periods [7]. Business Model - HaiXi New Drug operates a light-asset model, utilizing the Marketing Authorization Holder (MAH) system, which separates drug marketing and production licenses, allowing for outsourcing of production [5][10]. - The company has established a sales and distribution network with over 18,000 hospitals and medical institutions across China, covering all provinces and municipalities [4]. Market Strategy - The company is focusing on both generic and innovative drugs, with a particular emphasis on developing small-molecule innovative drugs that meet clear clinical needs [4][12]. - HaiXi New Drug's innovative pipeline includes a potential first-in-class oncology drug and other drugs targeting significant market needs, indicating a strategic shift towards innovation [12][14]. Industry Context - The Chinese pharmaceutical market is predominantly composed of generic drugs, with over 90% of the 4,000 pharmaceutical companies being generic drug manufacturers [11]. - The global market for breast cancer drugs is projected to grow significantly, providing a substantial opportunity for HaiXi New Drug's innovative products [12]. Future Outlook - The company is transitioning towards a heavier asset model with the construction of its own manufacturing facility, which may lead to increased operational volatility [14]. - Balancing stable income from generics with the long-term investment required for innovative drug development will be crucial for the company's future valuation [14].

Core Viewpoint - Haixi New Drug, the first pharmaceutical company in Fujian to obtain a drug production license, is advancing its IPO process on the Hong Kong Stock Exchange, showcasing significant revenue growth but facing various operational risks [1][2]. Financial Performance - Haixi New Drug's revenue surged from 2.12 billion in 2022 to 4.67 billion in 2024, with a net profit increase from 690 million to 1.36 billion during the same period, reflecting a compound annual growth rate (CAGR) of 48.2% for revenue and 40.5% for net profit [4]. - In the first five months of 2025, the company reported revenue of 2.49 billion and a net profit of 902 million [4][20]. Revenue Dependence and Risks - The company heavily relies on 13 approved generic drugs, with 4 included in the national volume-based procurement (VBP) program, leading to a significant dependency on VBP products, which accounted for 72.6% of revenue in 2024 [6]. - The top five customers contributed over 70% of total revenue, with the largest customer accounting for 44.5% [6]. - Key VBP products are approaching contract expiration, with two set to expire by the end of 2025 and others in subsequent years, raising concerns about future revenue stability [6][7]. Cash Flow and Financial Health - Despite impressive revenue growth, the company's cash flow is under pressure, with a cash balance of only 380 million at the end of 2024, covering just 21% of current liabilities [15][21]. - The operating cash flow has shown fluctuations, with a net cash flow of 1.64 billion in 2024, but a decline to 800 million in the first five months of 2025 [11]. Sales and Marketing Expenses - The sales expense ratio increased from 22% in 2022 to 35.5% in 2024, significantly higher than the industry average, which may erode profit margins [12][13]. - The rising sales costs are attributed to increased channel maintenance expenses and the need for additional marketing resources for newly included VBP products [12]. Innovation Pipeline - Haixi New Drug has four innovative drugs in development, but all are in early stages, with the first clinical trials just starting [17][19]. - The company’s R&D expenditure is relatively low, with rates below the industry threshold of 20%, which may hinder future innovation [19][23]. - The company plans to use funds from the IPO to support clinical development and expand its sales network, but faces competition from established products that are already ahead in the market [24]. Production Capacity Concerns - The company’s production facility in Chang Le has a designed capacity of 2 billion tablets per year, but actual sales in 2024 were only 460 million tablets, raising concerns about potential overcapacity [25].

Core Viewpoint - Fujian Haixi New Drug Creation Co., Ltd. is in the commercialization stage and is pursuing an IPO in Hong Kong, showcasing a significant revenue growth of 47.4%, but also revealing some underlying risks that warrant investor attention [1] Business Model: Dual Track Approach - The company has established a market position in the generic drug sector by launching a series of high-tech, high-potential generic drugs that meet regulatory requirements, with 14 generic drugs approved by the National Medical Products Administration [2] - Notable products include Anbili® and Haihuaitong®, which are expected to generate substantial revenue in 2024, contributing 146 million and 187.3 million respectively, with market shares of 25.7% and 59.3% [2] Innovative Drugs: High Potential but Long Road Ahead - The company is developing four innovative drugs targeting various conditions, including cancer and ophthalmology, with potential to be the first in their class globally; however, the high risk and long development cycle of innovative drug research pose uncertainties [3] Financial Performance: Significant Revenue Growth - The company's revenue for 2024 is projected to grow by 47.4%, significantly outpacing the average growth of the Chinese pharmaceutical market, primarily driven by the sales increase from generic drugs included in the VBP program [4] Net Profit: Data Not Disclosed - The prospectus does not specify changes in net profit, which is influenced by various factors such as cost control and R&D investment; the trajectory of net profit is crucial for assessing the company's profitability [5] Gross Margin and Net Margin: Data Awaited - The prospectus lacks specific data on gross and net margins, making it difficult for investors to fully evaluate the company's profitability quality; further disclosures are needed [6] Revenue Composition: Dominated by Generic Drugs - Revenue is primarily derived from generic drug sales, with significant contributions from products included in the national VBP program; innovative drugs are still in the development phase and have not yet contributed to revenue [7] Financial Challenges: R&D Costs and Market Competition - The high costs associated with innovative drug development may exert financial pressure, despite cash flow support from generic drug sales; if R&D fails or is delayed, it could impact the company's financial health [9] - The competitive landscape in the generic drug market is intensifying, which may lead to price pressures affecting revenue and profit [10] Peer Comparison: Advantages and Challenges - Compared to peers, the company has a market share advantage in the generic drug sector due to its products included in the VBP program; however, it may lag behind larger pharmaceutical companies in terms of R&D progress and scale [11] Customer and Supplier Concentration: Information Pending - The prospectus does not disclose information on major customers or supplier concentration, which could impact sales stability and cost control; further disclosures are necessary to assess these risks [12][13] Shareholding and Management: Stability and Experience Needed - Details regarding the controlling shareholders and management team are not provided, which are critical for understanding the company's decision-making and stability; further information is awaited [14][15]