Group 1: Market Overview - Global risk appetite has significantly declined, leading to a synchronized drop in equity and commodity markets, with major stock indices experiencing widespread pullbacks, particularly in the technology sector [2][39] - The MSCI Global Index fell by 2.5%, with developed markets showing a pattern where frontier markets declined less than developed and emerging markets [4][40] - The VIX index and MOVE 5-day moving average have risen sharply, indicating increased market volatility [2][39] Group 2: Fixed Income - The credit bond market has seen a cooling in trading sentiment, with institutions adopting a more conservative approach, favoring short-term bonds over long-duration ones [2][10] - The yield curve for Chinese bonds has shifted upward, indicating a "bear steepening" trend, while U.S. bonds have shown a "bull steepening" trend with a downward shift in yields [5][41] Group 3: Commodity and Currency - Commodity indices such as South China and CRB have declined by 1.8% and 2.2% respectively, with only three out of thirteen major commodity futures recording price increases [6][42] - The U.S. dollar index has risen by 0.9%, surpassing 100, while the Japanese yen has depreciated by 1.2%, approaching the 160 mark against the dollar [6][42] Group 4: Steel Industry - The apparent demand for steel from the five major steel mills increased by 3.9% week-on-week, while production decreased by 1.9% [18][21] - The profitability of steel companies has declined, with the average gross profit per ton of rebar dropping by 20 yuan to 61 yuan [19][20] - The steel industry is expected to stabilize in demand, with supply contraction anticipated due to ongoing policies aimed at reducing production [21][22] Group 5: Construction Industry - The activation of the Tanzania-Zambia Railway project has been announced, which is expected to significantly enhance freight capacity and reduce transportation time [23][24] - The Chinese government is focusing on urban renewal initiatives to stimulate investment and consumption, which may positively impact the construction sector [24] Group 6: Pharmaceutical Industry - The company under review, Fangsheng Pharmaceutical, has a focus on innovative traditional Chinese medicine, with a projected EPS growth from 0.69 to 0.97 yuan from 2025 to 2027 [30][31] - The company has faced revenue declines due to policy impacts, with a 6.75% year-on-year decrease in industrial revenue for the first three quarters of 2025 [31][33] - Despite short-term challenges, the company has seen growth in cardiovascular products, indicating potential for recovery [31][33]

股票研究 /[Table_Date] 2025.11.24 聚焦中药创新，系列产品加速推广 方盛制药(603998) 方盛制药首次覆盖 | [姓名table_Authors] | 电话 | 邮箱 | 登记编号 | | --- | --- | --- | --- | | 张澄(分析师) | 010-58067988 | zhangcheng5@gtht.com | S0880525040130 | | 彭娉(分析师) | 021-23185619 | pengping@gtht.com | S0880525040080 | | 郑琴(分析师) | 021-23219808 | zhengqin@gtht.com | S0880525040108 | | 余文心(分析师) | 021-38676666 | yuwenxin@gtht.com | S0880525040111 | 本报告导读： 公司业务以中药创新药为核心，重点打造心脑血管、骨骼肌肉与儿童用药等多品类 产品系列矩阵，近年来医疗等非核心主业逐步剥离，重点产品集采后快速入院放量。 投资要点： | [Table_Finance] 财务摘要(百万元) | 2 ...

Investment Rating - The investment rating for Fangsheng Pharmaceutical (603998) is not explicitly stated in the provided documents, but the report indicates a positive outlook based on performance metrics and growth potential [1]. Core Insights - The company reported a total revenue of 1.253 billion yuan for the first three quarters of 2025, a year-on-year decrease of 7.02%, while the net profit attributable to shareholders increased by 17.6% to 268 million yuan [2]. - The growth in net profit is attributed to a decrease in expense ratios, with a notable reduction in sales and management expenses [3]. - The company has successfully commercialized two traditional Chinese medicine (TCM) products, with plans for further commercialization of new products, including a TCM for treating frequent tension-type headaches [3]. Financial Performance Summary - For 2025, the company is projected to achieve revenues of 1.740 billion yuan, a slight decrease of 2.1% year-on-year, with net profit expected to rise by 24.6% to 318 million yuan [5]. - The gross profit margin is forecasted to be 70.5% in 2025, with a net asset return (ROE) of 18.4% [4]. - Earnings per share (EPS) is projected to increase from 0.58 yuan in 2024 to 0.72 yuan in 2025, reflecting a positive growth trajectory [4]. Product and Market Development - The cardiovascular medication segment showed a revenue increase of 10.16% year-on-year in Q3 2025, driven by strong sales of specific products [3]. - The company has expanded its market presence for its pediatric cough syrup, covering over 320 public medical institutions and nearly 2000 in total [3]. - The newly approved TCM product, Yangxue Qufeng Zhitong Granules, is expected to become a significant profit driver if included in the national basic medical insurance directory [3].

Core Viewpoint - The company held a Q3 2025 performance briefing on October 24, 2025, to discuss its operational performance and address investor concerns [1] Group 1: Company Performance and Strategy - The company's respiratory medication revenue has decreased by nearly 60% year-on-year due to industry factors, prompting a strategic focus on expanding market coverage and enhancing brand awareness for key products [2] - The company has successfully expanded its pediatric cough syrup's market presence, covering over 2,000 public medical institutions, with significant progress in adult indications research [2] - The management plans to accelerate the development of innovative traditional Chinese medicine (TCM) products, aiming to establish a product matrix with annual sales of 300-500 million yuan for multiple products [3][4] Group 2: Product Development and Market Position - The company has received approval for its blood-nourishing pain relief granules but has not yet launched them in hospitals; it plans to consider OTC status for easier access [5] - The company is focusing on chronic disease areas such as orthopedics and cardiovascular health, with several innovative TCM projects in the pipeline, including clinical trials for various products [5] - The company aims to leverage historical opportunities in TCM development to enhance market coverage and brand building, fostering new profit growth points [5]

Investment Rating - The investment rating for the pharmaceutical and biotechnology industry is "Positive" (maintained) [1] Core Insights - The report highlights the ongoing adjustments to the National Essential Medicines List (NEML), with a focus on the potential inclusion of various traditional Chinese medicine products, which could significantly enhance growth opportunities for related companies [7][15][27] - The report emphasizes the historical context of the NEML, noting that it has undergone several revisions since its inception in 1982, with the latest version released in 2018 [5][16] - The report suggests that the demand for adjustments to the NEML is increasing, particularly for chronic disease medications and innovative domestic drugs, indicating a potential shift in the market landscape [27] Summary by Sections 1. NEML Adjustment Progress - The NEML is set to be adjusted approximately every three years, but the last update was in 2018, leading to calls for a new revision to include more chronic disease medications and innovative products [27] - The report recommends monitoring companies that may benefit from being included in the updated NEML, particularly in the traditional Chinese medicine sector [28] 2. Historical Context of NEML - The NEML was first published in 1982, with significant revisions occurring in 2009, 2012, and 2018, reflecting the government's commitment to improving public health through essential medicines [5][16] - The 2018 version of the NEML included 685 items, with a notable increase in the number of traditional Chinese medicines, indicating a growing recognition of their importance [20][21] 3. Future Outlook - The report anticipates that the upcoming adjustments to the NEML will likely favor traditional Chinese medicine products, which could lead to increased sales and market penetration for companies in this sector [26][27] - Companies like Fangsheng Pharmaceutical are highlighted for their innovative approaches and potential for rapid growth in the traditional Chinese medicine market [30][31] 4. Market Performance - In the fourth week of September 2025, the pharmaceutical and biotechnology sector experienced a decline of 2.20%, underperforming compared to the CSI 300 index [32] - The report notes that while the overall sector faced challenges, certain sub-sectors, such as other biological products, showed resilience with positive growth [38][39]

Core Viewpoint - The company reported its mid-year results for 2025, showing a decline in revenue but an increase in net profit, indicating a strong performance in specific segments despite overall challenges [1][2]. Group 1: Financial Performance - In the first half of 2025, the company achieved operating revenue of 834 million yuan, a year-on-year decrease of 8.35% [1]. - The net profit attributable to shareholders reached 169 million yuan, reflecting a year-on-year increase of 23.67% [1]. - The net profit excluding non-recurring items was 141 million yuan, up 27.79% year-on-year [1]. Group 2: Business Segments - The pharmaceutical industrial segment generated 768 million yuan in revenue, down 8.20% year-on-year [1]. - Cardiovascular drugs saw revenue of 276 million yuan, marking a growth of 16.05% year-on-year, with strong sales of key products [1]. - The company successfully expanded its market for traditional Chinese medicine (TCM) innovative drugs, with significant progress in products like pediatric cough granules and bone health tablets [1]. Group 3: Future Outlook - The company has established a product cluster primarily focused on TCM innovative drugs, supplemented by chemical drugs and early-stage innovative drugs [2]. - Revenue growth projections for 2025-2027 are estimated at 3.3%, 11.5%, and 11.7%, respectively, while net profit growth is expected at 20.2%, 20.3%, and 20.0% [2]. - The investment rating is maintained at "Buy-A" with a target price of 13.97 yuan over the next six months [2].

Investment Rating - The investment rating for the company is "Buy-A" with a 6-month target price of 13.97 CNY, compared to the current stock price of 11.37 CNY [4]. Core Insights - The company reported a revenue of 834 million CNY in H1 2025, a year-on-year decrease of 8.35%, while the net profit attributable to shareholders increased by 23.67% to 169 million CNY [1]. - The growth in net profit is attributed to the strong performance of cardiovascular drugs, which saw a revenue increase of 16.05% to 276 million CNY, driven by a 20% increase in sales of specific products [2]. - The company is successfully expanding its market for innovative traditional Chinese medicine (TCM) products, with significant coverage achieved in public medical institutions [3]. Financial Performance - In H1 2025, the company's main pharmaceutical business generated 768 million CNY in revenue, a decrease of 8.20% year-on-year [2]. - The company expects revenue growth rates of 3.3%, 11.5%, and 11.7% for 2025 to 2027, with net profit growth rates of 20.2%, 20.3%, and 20.0% respectively [7]. - The projected earnings per share (EPS) for 2025 is 0.70 CNY, with a price-to-earnings (P/E) ratio of 16.3 [9]. Market Expansion and Innovation - The company has made significant progress in the market expansion of its innovative TCM products, with over 1,800 public medical institutions covered for its children's cough syrup and over 1,500 for its bone health product [3]. - The approval of a new TCM product for treating frequent tension-type headaches is expected to provide a new profit growth point if it is included in the national basic medical insurance directory [3][7].

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company's performance in H1 2025 met expectations, driven by innovative traditional Chinese medicine, which is expected to support long-term growth [5] - The company reported a revenue of 834 million yuan in H1 2025, a year-on-year decline of 8.35%, while the net profit attributable to shareholders was 169 million yuan, a year-on-year increase of 23.67% [8] - The company is focusing on its pharmaceutical industrial sector, with a revenue of 768 million yuan from this segment, down 8.2% year-on-year [8] - Innovative traditional Chinese medicine is becoming a new profit growth point, with three innovative traditional Chinese medicine products approved [8] - The company is increasing its R&D investment, with R&D expenses reaching 68.09 million yuan in H1 2025, a year-on-year increase of 10.98% [8] Financial Summary - Revenue projections for the company are as follows: 1,629 million yuan in 2023, 1,777 million yuan in 2024, 1,749 million yuan in 2025E, 1,890 million yuan in 2026E, and 2,124 million yuan in 2027E [6] - The net profit attributable to shareholders is projected to be 187 million yuan in 2023, 255 million yuan in 2024, 342 million yuan in 2025E, 394 million yuan in 2026E, and 455 million yuan in 2027E [6] - The company’s earnings per share (EPS) is expected to grow from 0.43 yuan in 2023 to 1.04 yuan in 2027 [6] - The projected price-to-earnings (P/E) ratios are 26.72 for 2023, 19.56 for 2024, 14.58 for 2025E, 12.68 for 2026E, and 10.98 for 2027E [6]

Group 1 - The 2025 American Society of Clinical Oncology (ASCO) annual meeting showcased over 70 original research results from China, highlighting the increasing recognition of Chinese innovative drugs in the capital market [1] - Chinese innovative drug companies are entering a profitable phase, with significant business development (BD) transactions contributing to substantial profit returns, leading to a systematic increase in valuations for innovative drugs [1][2] - The number of original innovative drugs developed by Chinese companies has surged from 124 in 2015 to 704 in 2024, positioning China as a global leader in original drug research and development [1] Group 2 - From 2015 to 2024, the number and value of outbound licensing transactions by Chinese pharmaceutical companies have consistently increased, reaching a peak of $51.9 billion in total transaction value in 2024 [2] - Notable transactions include the $6.05 billion deal between 3SBio and Pfizer for the PD-1/VEGF dual antibody drug, setting a record for Chinese innovative drugs entering international markets [2] - The leading position of Chinese companies in new technologies such as bispecific antibodies and antibody-drug conjugates is expected to drive further significant BD transactions in the coming years [2] Group 3 - The recognition of domestic innovative drugs and the influx of large BD deals have heightened investor interest in companies operating in the innovative drug sector [3] - Companies like Hunan Warner Pharmaceutical and Hunan Fosheng Pharmaceutical are actively advancing their innovative drug projects, with several candidates in various stages of clinical trials [3] - Multiple listed companies have reported progress in the innovative drug field, with a significant number of products entering clinical stages, including 24 key products from Changchun High-tech and ongoing trials for new drugs from Hainan Haiyao [3] Group 4 - The innovative drug industry is currently experiencing a dual wave of technological breakthroughs and global expansion, with leading companies expected to drive industry transformation [4] - The development of innovative drugs requires substantial technical accumulation and financial backing, emphasizing the need for professional research and careful selection of quality innovative drug companies for investment [4]

Core Viewpoint - The company, Fangsheng Pharmaceutical, is experiencing growth in revenue and profit, particularly in its innovative drug segment, with a focus on maintaining a stable dividend policy and enhancing market presence in traditional Chinese medicine [1][2][4]. Weekly Highlights - As of May 23, 2025, Fangsheng Pharmaceutical's stock closed at 9.91 yuan, up 1.54% from the previous week, with a total market capitalization of 4.351 billion yuan [1]. - The company reported a projected revenue of 1.777 billion yuan for 2024, representing a 9.15% increase, and a net profit of 255 million yuan, reflecting a 36.61% growth [1]. Institutional Research Insights - The innovative drug segment showed significant sales growth, with the pediatric cough syrup increasing sales by 73% to nearly 90 million yuan, and the Xuanqi Jianbone tablets achieving 1.1 billion yuan in sales, a 280% increase [1]. - The company has implemented a multi-category collaborative development model to balance risks and support continuous growth [1]. Dividend Policy - The company has a history of cash dividends, with a total of 16 distributions amounting to approximately 623 million yuan. For 2024, it plans to distribute a total of 136 million yuan in dividends, which is 53.34% of the net profit attributable to shareholders [2][6]. Sales Performance - In the first four months of 2025, core product sales continued to show steady growth, although the overall market for respiratory drugs faced a decline due to various external factors [3]. - The company is focusing on cost control and efficiency improvements to enhance profitability despite revenue challenges [3]. Future Expectations - For 2025, the company aims to achieve revenue and net profit growth above the industry average by enhancing brand presence and expanding market share in innovative Chinese medicine [4]. - The strategic plan includes increasing investment in innovative drug development and optimizing resource allocation for research and marketing [4][5]. Company Announcements - Fangsheng Pharmaceutical has successfully recovered 83 million yuan in loans from Baijun Medical, with remaining unpaid principal of approximately 71.91 million yuan [7].