Core Viewpoint - The company Auscan Biotech is preparing for an IPO on the Hong Kong Stock Exchange, aiming to strengthen its position in the biopharmaceutical industry and enhance its platform value as a profitable "hidden champion" in the sector [1]. Group 1: Company Background and Market Position - Auscan Biotech was founded in 2011 and is recognized as China's first serum-free cell culture medium company, contributing to the reduction of reliance on imported biopharmaceutical raw materials [1][2]. - The company has developed a full industry chain platform covering cell culture media and CRDMO (Contract Research and Development Manufacturing Organization) services, witnessing a significant shift from dependence on imports to self-sufficiency in key biopharmaceutical materials [1][3]. - Auscan has established itself as the market leader in commercial biopharmaceutical culture media in China, with its sales of dry powder culture media surpassing the total sales of all domestic competitors since 2017 [3][4]. Group 2: Product Development and Innovation - The company has invested three years to establish a "chemically defined + animal-free" culture medium system, achieving full domestic production of raw materials by 2017 [3]. - Auscan's strategy includes not only supplying culture media but also developing proprietary formulations and large-scale production capabilities, which is crucial for the biopharmaceutical industry [4][5]. - The company has built the world's largest single-line dry powder culture medium production line, exceeding the scale of overseas competitors [3]. Group 3: Business Expansion and Future Outlook - Auscan is expanding its services to cover the entire lifecycle of biopharmaceuticals, from early research to commercial production, through its CRDMO platform [5][6]. - The company has established a commercial production base for ADC (Antibody-Drug Conjugates) in Shanghai, which has already generated revenue in the millions since its launch in August 2023 [5][6]. - Auscan is actively pursuing next-generation biopharmaceutical technologies, particularly in the ADC and AXC (Antibody-Oligonucleotide Conjugates) sectors, indicating a strong growth potential in the coming years [9][10].

Group 1: Financial Performance - The company's CRO service revenue for 2022 was 109.6 million with a gross margin of 66.96% [4] - In 2023, CRO service revenue increased to 154.1 million with a gross margin of 69.62% [4] - However, in 2024, CRO service revenue rose to 168.5 million but the gross margin dropped to 47.58%, indicating a decline of over 20 percentage points [4] Group 2: Market Challenges and Strategies - The company faced a negative growth in CRO service revenue in the second half of 2024 due to market competition and price adjustments [2] - To mitigate the impact of increased tariffs between the US and China, the company has enhanced local warehousing and inventory measures while leveraging its US and Canadian production capabilities [3] - The company aims to improve service competitiveness and expand overseas CRO business to achieve growth in 2025 [2] Group 3: Business Development and Future Outlook - The company expects its conventional business revenue to continue growing in 2025, despite uncertainties in unconventional business revenue due to external factors [3] - The dry powder culture medium business is anticipated to generate revenue starting in 2025 after initial customer trials in 2024 [5] - The company plans to enhance the utilization of the Skyland Industrial Square, acquired for over 900 million, to support the biopharmaceutical industry chain in the capital [5] Group 4: Product Development and Innovation - The company is actively developing biological reagents related to organoid research, including matrix gels, although there are currently no plans for traditional matrix gel products due to animal use requirements [7] - New products such as salt-tolerant nucleic acid enzymes and linking enzymes have been launched by the Suzhou subsidiary, which is still in the process of market expansion [6]