Core Viewpoint - Suzhou Zelgen Biopharmaceutical Co., Ltd. (Zelgen Pharma) has officially submitted its application for listing on the Hong Kong Stock Exchange, aiming to enhance its international brand recognition and support its global business strategy, despite recent actions that raise questions about its commitment to internationalization [1] Financial Performance - Zelgen Pharma has not yet achieved profitability since its IPO on the STAR Market in 2020, but its losses have been decreasing year by year. Revenue for 2022, 2023, and 2024 is reported at 302 million, 386 million, and 533 million yuan respectively, while losses for the same periods are 457 million, 279 million, and 138 million yuan [2] - In the first three quarters of 2025, the company reported revenue of 593 million yuan, a year-on-year increase of 54.49%, with losses amounting to 93.42 million yuan [2] - The company's revenue primarily comes from three approved products, with significant sales expenses that have risen alongside revenue, indicating a focus on market expansion [2] Capital Operations - Zelgen Pharma has engaged in frequent capital operations, raising 2.026 billion yuan during its IPO and an additional 1.2 billion yuan through a private placement in 2023. The company has utilized 1.677 billion yuan of the IPO funds and 406 million yuan of the private placement funds for new drug research projects [3] - The company has also proposed to raise up to 300 million yuan through a simplified procedure for issuing shares to specific investors [3] - A notable portion of the raised funds has been redirected, with 25.38% of IPO funds and 19.88% of private placement funds having their purposes changed [3] Debt Situation - The company's interest-bearing debt has been on the rise, with short-term loans increasing from 391 million yuan in 2022 to 967 million yuan in the first three quarters of 2025, and long-term loans fluctuating during the same period [4] Internationalization Strategy - Despite the importance of internationalization for Zelgen Pharma, the company recently canceled its overseas subsidiary GENSUN, which was seen as a key component of its international strategy. This decision came after the company had previously acquired shares in GENSUN using its own funds [5][6] - GENSUN, established in the U.S. for new drug research, has been unprofitable since its inception, yet the company valued it at approximately 90.28 million USD during acquisitions [6] - The company has reduced its investment in an international clinical trial project, indicating a shift in focus due to competitive pressures in the market [7]

Investment Rating - The report maintains an "Accumulate" rating for the pharmaceutical and biotechnology industry [1]. Core Insights - The stroke treatment market in China is projected to exceed 100 billion yuan, with QHRD106 from Qianhong Pharmaceutical expected to become a major product with potential sales of 4-5 billion yuan [1][19]. - The A-share pharmaceutical index has shown a year-to-date increase of 6.6%, outperforming the CSI 300 index by 9.0% [4][9]. - The report highlights the importance of secondary prevention in acute ischemic stroke (AIS) treatment, emphasizing the need for effective therapies [18][19]. Summary by Sections Industry Trends - The A-share pharmaceutical index has increased by 2.6% this week, with significant gains in various sub-sectors, including chemical drugs (+4.4%) and raw materials (+3.2%) [4][9]. - The H-share biotechnology index has shown a year-to-date increase of 41.4%, outperforming the Hang Seng Technology Index [4][9]. Market Potential - The number of stroke patients in China is approximately 13 million, with an annual increase of about 4.5%-4.8%, indicating a growing market for stroke medications [19][27]. - The report estimates that the sales peak for QHRD106 could reach 4-5 billion yuan by 2027, positioning it as a potential blockbuster drug [1][19]. R&D Progress and Company Dynamics - QHRD106 is currently in clinical phase II, with data expected to be released in the second half of 2025, potentially outperforming existing similar drugs [1][19]. - The report lists several companies to watch, including Qianhong Pharmaceutical, Hengrui Medicine, and BeiGene, focusing on growth potential in the innovative drug sector [10][11]. Investment Strategy - Recommended sub-sector rankings for investment are: innovative drugs > CXO > traditional Chinese medicine > medical devices > pharmacies > pharmaceutical commerce [10]. - Specific stock selection strategies include focusing on growth in innovative drugs and identifying undervalued stocks in traditional Chinese medicine [10].