Core Viewpoint - King’s Ray Biotechnology focuses on "technology-driven" and "global layout" as its core development strategy, aiming for long-term revenue growth and clear growth paths for various segments [1] Group 1: Financial Projections - The company maintains a "buy" rating, predicting revenue for its main business segments to be $939 million, $825 million, and $961 million for 2025-2027, with year-on-year growth rates of 58%, -12%, and 16% respectively [1] - The estimated PS valuation for the main business segment is based on a 6x PS multiple for 2026 revenue, leading to a valuation of 35.2 billion RMB [1] - The fair value of the company's stake in Legend Biotech, a US-listed company, is estimated at 17 billion RMB as of November 20, 2025 [1] Group 2: Strategic Goals - The company aims to be the global leader in biopharmaceuticals (antibody drugs, gene & cell therapy) and synthetic biology services and products [2] - The strategic plan includes solidifying cash flow to support life sciences, biopharmaceutical CRDMO, and synthetic biology, driving profit growth [2] - The long-term revenue target is set at $3 billion by 2035, with an operating profit margin exceeding 20% [2] Group 3: Business Development Focus - The company is focused on ensuring steady growth in its core businesses, particularly in gene & plasmid services, aiming to expand downstream applications [2] - The antibody protein business aims to enhance core competitiveness and capture the non-outsourcing market by providing innovative instruments and solutions [2] - The protein antibody drug CDMO aims to leverage the rebound in China's biotech sector, accumulate more projects, and enhance sales capabilities in Europe and the US [2] Group 4: Growth Strategy - The company seeks to consolidate its business capabilities by transforming mature services into one-stop solutions, accelerating productization for downstream clients [3] - There is a focus on high-margin products in enzyme preparations, particularly in starch sugar, alcohol, and home care sectors [3] - The company is looking for explosive industry opportunities through innovative protein/enzyme preparations and collaborative development of licensed products [3]

Core Viewpoint - Zhijiang Biotech (stock code: 688317) has received overwhelming support from shareholders to engage in foreign exchange derivative trading to mitigate currency risk associated with its international business operations [1][2]. Group 1: Shareholder Meeting and Approval - The second extraordinary general meeting of Zhijiang Biotech was attended by 112 shareholders, representing approximately 72.82 million shares, or 37.9% of the total share capital [1]. - The proposal to conduct foreign exchange derivative trading was approved with a high vote of 99.52% [1]. - The company plans to engage in foreign exchange derivatives with a limit of up to $20 million (or equivalent in other currencies) within 12 months of the approval [1]. Group 2: Business Strategy and Rationale - The company aims to hedge against currency fluctuations due to its import and export operations, which often involve foreign currencies like the US dollar [1][2]. - Although current overseas revenue is modest at around 2.3 million yuan, the company is in a critical phase of expanding its international presence, including markets like Japan [2]. - Zhijiang Biotech is also exploring overseas acquisition targets to diversify its business strategy [2]. Group 3: Financial Performance - For the first three quarters of the year, Zhijiang Biotech reported revenue of 90.43 million yuan, a year-on-year decline of 34.27%, with a net loss attributable to shareholders of 29.38 million yuan [3]. - Despite the revenue drop, the company increased its R&D investment, which accounted for 46.51% of revenue, up 18.11 percentage points from the previous year [3]. - The company has effectively managed its inventory levels, which have returned to normal after previous adjustments [4]. Group 4: Innovation and Drug Development - Zhijiang Biotech has signed a strategic cooperation agreement with Sanyou Biotech to enhance drug development automation, aiming to shorten R&D cycles and improve efficiency [5]. - The company is focusing on innovative drug development, particularly in infectious diseases and oncology, with ongoing preclinical studies [6][7]. - The company is leveraging its expertise in materials science and chip technology to develop organoid technology for personalized medicine and drug screening [6]. Group 5: Future Plans and Financial Strategy - The company plans to establish an independent platform for innovative drug development, indicating a strategic shift towards this area [7]. - Zhijiang Biotech is evaluating various projects for investment, with a focus on synergy with its core business [7]. - The company has over 2 billion yuan in cash, which will be strategically utilized for future investments [7].

Financial Performance - The total revenue for ZhiJiang Bio (688317) in the 2025 mid-year report was 59.68 million yuan, a decrease of 36.91% year-on-year [1] - The net profit attributable to the parent company was -9.85 million yuan, representing a decline of 137.88% year-on-year [1] - The gross profit margin was 63.56%, down 14.76% year-on-year, while the net profit margin was -16.51%, a decrease of 160.04% year-on-year [1] - The total of selling, administrative, and financial expenses reached 26.31 million yuan, accounting for 44.09% of total revenue, an increase of 18137.82% year-on-year [1] - Earnings per share were -0.05 yuan, a decline of 135.71% year-on-year [1] Cash Flow and Debt - The company reported cash and cash equivalents of 2.506 billion yuan, a decrease of 9.42% year-on-year [1] - The accounts receivable decreased by 52.29% year-on-year to 39.89 million yuan [1] - Interest-bearing liabilities increased significantly by 12370.61% year-on-year to 2.666 million yuan [1] Business Evaluation - The company's historical median ROIC since its listing is 12.38%, with the worst year being 2024, which recorded a ROIC of -6.43% [2] - The company has experienced two years of losses since its listing, indicating a fragile business model [2] Fund Holdings - The largest fund holding ZhiJiang Bio is Dachen Jingheng Mixed A, with a scale of 397 million yuan and a recent net value of 3.405, which has increased by 97.9% over the past year [4] Research and Development - The company is focusing on vertical integration, extending its product, industry, and value chains, particularly in the development of innovative antibody drugs for cancer and autoimmune diseases [4] - The company has successfully screened several antibody drug molecules, with one entering the invention patent acceptance stage [4]