Core Viewpoint - The article highlights the significant growth and competitive advantages of Jinhe Biological, particularly in the veterinary pharmaceutical sector, driven by rising demand and pricing power in the livestock industry, as well as the burgeoning pet economy in China [1][5]. Group 1: Industry Trends - In the U.S., beef prices have reached historical highs, with ground beef prices increasing by 12% year-on-year in June. In China, the number of beef cattle decreased by 2.33% month-on-month in May, while calf prices surged by 26.37% year-on-year as of July 11 [1]. - The upward trend in calf prices and the decline in beef cattle inventory are expected to support beef prices in the latter half of 2025 and into 2026, indicating a sustained cycle of profitability in the beef industry [3]. Group 2: Company Performance - Jinhe Biological, a leader in the veterinary pharmaceutical market with a 50% global market share in oxytetracycline, has experienced rapid growth in performance this year, with a stock price increase of over 90% by April 10 [1][2]. - The company's net profit attributable to shareholders for the first half of 2025 increased by 51.52% year-on-year, reaching 138 million yuan, driven by increased sales of oxytetracycline and reduced raw material costs [2]. Group 3: Business Strategy and Growth Drivers - The company has established a dual-channel strategy in the pet health sector, with a focus on both imported and domestic brands, and has launched an AI-powered pet care app [4]. - The pet industry in China is projected to grow from 170.8 billion yuan in 2018 to 300.2 billion yuan by 2024, with a compound annual growth rate of 9.86% [4]. - Jinhe Biological's vaccine business is expected to see significant growth, particularly with the brucellosis vaccine, which has a market potential of around 4 billion yuan and could grow to 20 billion yuan due to increased demand and pricing [21]. Group 4: Competitive Advantages - The company benefits from scale advantages that drive cost reductions and efficiency improvements, with plans for a new factory expected to enhance profitability and reduce production costs [12]. - Jinhe Biological has established strong technical barriers and innovation capabilities, collaborating with research institutions to improve product quality and reduce impurities in its products [13][14]. - The company has a diversified business model that includes environmental protection and agricultural product processing, which contribute to stable performance [15]. Group 5: Future Outlook - The company aims to leverage its dual-drivers of pharmaceutical and vaccine segments to transition from a cyclical to a growth-oriented enterprise, indicating long-term investment value [28].

Financial Performance - The company achieved a revenue of 1.39 billion CNY in the first half of the year, representing a year-on-year growth of 30.45% [1] - The net profit attributable to shareholders reached 138 million CNY, with a year-on-year increase of 51.52% [1] - The adjusted net profit was 128 million CNY, reflecting a growth of 50.88% compared to the previous year [1] Segment Performance - The pharmaceutical segment saw significant growth, generating 860 million CNY in revenue, a 72.15% increase, accounting for 61.83% of total revenue [1] - The veterinary pharmaceutical segment reported improved sales and profit levels, with major products like the antibiotic premix showing substantial growth [2] Market Dynamics - The price of raw materials, such as corn, decreased by 11.90% compared to the previous year, contributing to lower production costs [2] - The U.S. pharmaceutical market has shown consistent growth, with increased sales of key products like the water-soluble antibiotic [2] - The domestic market for the antibiotic is expected to grow due to improved profitability in the pig farming sector and expanded sales channels [2] Product Development - The company has received approval for the antibiotic in targeted animals, particularly sheep, which is expected to contribute significantly to sales growth [3] - New products, including vaccines for various diseases, are anticipated to launch within the year, enhancing the product portfolio [2][3] Strategic Initiatives - The company is focusing on expanding its pet business, with 15 products currently available and more in the pipeline [2] - A new pet app, "Ai Pet Easy," is set to launch, incorporating AI features for enhanced user engagement and potential revenue generation [2][3] Challenges and Outlook - The solid waste landfill business experienced a temporary decline in revenue, but recovery is expected in the future [4] - The overall outlook for the pharmaceutical segment remains positive, with expectations of maintaining a relatively high gross margin [3]

Group 1: Project and Investment Updates - The company has not arranged for the construction of the erythritol project and has no related information to provide at this time [1] - The company has completed fundraising but has no specific plans for the erythritol project, nor a timeline for construction [1] - The company is focusing on existing projects and has no further restructuring plans [2] Group 2: Market and Trade Impact - The trade war has not affected the company's export products, and export volumes remain stable [1] - The company has implemented price increases in the U.S. market to cover tariff costs [1] - The company maintains a stable market share globally, despite fluctuations in international trade [1] Group 3: Product Performance and Sales - The company's chemical drug product, Jinmeisu, has maintained a high reputation and stable supply-demand relationship in the market [2] - The main vaccine product, Blue Ear Inactivated Vaccine, continues to hold the number one market share [2] - The company’s new production capacity for chemical drugs is currently at 100% utilization [2] Group 4: Future Development Strategies - The company aims to enhance product quality, innovation capabilities, and market share to ensure steady profit growth [2] - The company is actively pursuing strategic development goals and aims to achieve a market value of 20 billion [3] - The company is exploring new avenues in the animal health sector while focusing on existing product development [2] Group 5: Financial and Operational Insights - The company’s logistics costs for the first half of 2025 are still being compiled, with details to be disclosed in the upcoming half-year report [5] - The company has invested 158 million in a wastewater treatment project to enhance its capabilities and profitability [4] - The company is closely monitoring the impact of corn price fluctuations on product costs and adjusting procurement strategies accordingly [4]

Core Viewpoint - The company faced significant challenges in 2024 due to a deep adjustment in the breeding industry, leading to a decline in both revenue and profit, prompting a strategic shift to maintain market share [1][2]. Group 1: Financial Performance - In 2024, the company achieved revenue of 1.255 billion yuan, a year-on-year decrease of 21.45%, and a net profit attributable to shareholders of 109 million yuan, down 61.57% [1]. - In Q1 2025, the company reported revenue of 352 million yuan, a year-on-year increase of 1.06%, while net profit attributable to shareholders was 76 million yuan, a decrease of 27.57% [1]. Group 2: Industry Dynamics - The breeding industry is experiencing a downturn, with strong cost-cutting demands from downstream customers, leading to intensified competition in the animal health sector and a decline in product prices [1][2]. - The company’s core product, the foot-and-mouth disease vaccine, maintains a stable market share but faces pricing pressures [2]. Group 3: Product Performance - The swine vaccine segment is under pressure due to intense competition, although the company saw a significant year-on-year sales increase of 52.17% for the pig circovirus vaccine, despite facing price challenges [2]. - The ruminant vaccine segment showed resilience even in a sluggish breeding market, while the company has a competitive advantage in brucellosis prevention with a diverse product range [2]. Group 4: Research and Development - The company invested 179 million yuan in R&D in 2024, accounting for 14.25% of its revenue, achieving significant breakthroughs in non-epidemic vaccine development [3]. - The company received four new veterinary drug registration certificates and production approvals in 2024, bolstering its product pipeline for long-term growth [3]. Group 5: Earnings Forecast - The expected EPS for 2025-2027 is projected to be 0.23 yuan, 0.28 yuan, and 0.33 yuan, with corresponding dynamic PE ratios of 30, 25, and 21 times, respectively, maintaining a "hold" rating [3].

Core Viewpoint - The company operates in the veterinary pharmaceutical industry, focusing on the production and sales of veterinary biological products, particularly vaccines, which are essential for animal health and food safety in China [2][3]. Company Overview - The company is engaged in the research, development, production, and sales of veterinary biological products, with a product range that includes over a hundred types of vaccines for pigs, poultry, ruminants, and pets [6]. - The veterinary pharmaceutical industry in China has seen continuous growth, with the market size increasing from 41.213 billion yuan in 2013 to 69.651 billion yuan in 2023, and the veterinary biological products market growing from 9.4 billion yuan to 16.276 billion yuan during the same period [2]. Industry Dynamics - China's livestock industry is experiencing growth in output value, driven by rising consumer demand for protein quality and safety, which supports the veterinary pharmaceutical industry's expansion [3]. - The government has prioritized food safety and animal epidemic prevention, leading to a series of development plans and regulatory improvements to promote the healthy and high-quality development of the veterinary pharmaceutical industry [3]. - As of the end of 2024, the national pig inventory was 427.43 million heads, a decrease of 1.6% year-on-year, while the average price for pig sales increased by 10.9% to approximately 17.08 yuan per kilogram [3]. Business Model - The company employs a production model based on order demand, ensuring that production aligns with market needs and inventory levels [9]. - The sales strategy includes direct sales to large-scale farms, collaboration with selected distributors, and participation in government procurement for mandatory vaccination programs [10][11]. Performance Drivers - The company has maintained a stable market share in key vaccine products, with significant sales growth in the pig circovirus vaccine due to its superior product quality [12]. - The company focuses on customer-centric solutions, leveraging high R&D investment to enhance product competitiveness and drive innovation [12].