Investment Rating - The report initiates coverage with a "Buy" rating for the company [1][10]. Core Insights - The company is positioned to benefit from its integrated raw material and formulation strategy, which is expected to drive growth in the coming years [6][9]. - The company is transitioning towards innovation, focusing on self-developed biological drugs in the fields of oncology and autoimmune diseases, with a robust pipeline of projects [9][65]. - The financial forecast indicates a recovery in revenue and profit margins, with significant growth expected from innovative drug approvals [10][26]. Summary by Sections 1. Integrated Raw Material and Formulation Layout - The company has established itself as a leading pharmaceutical manufacturer in China, with a strong focus on both raw materials and formulations [20][23]. - The company has faced pricing pressures in raw materials and formulations but is expected to see a recovery in performance starting in 2024 [24][25]. 2. Dual-Driven Growth from Raw Materials and Formulations - The raw material business remains stable, with a diverse product lineup and a strong global sales network [41][43]. - The formulation segment has seen rapid growth, particularly after benefiting from national procurement policies, with a compound annual growth rate (CAGR) of 24.4% from 2012 to 2024 [59][61]. 3. Focus on Biological New Drugs - The company is actively developing innovative drugs, with over 20 projects in the pipeline, including 12 that have entered clinical trials [65][66]. - Key projects include HB0034, which is nearing commercialization, and HB0017, which has shown promising results in clinical trials for psoriasis and ankylosing spondylitis [69][71]. 4. Financial Forecast and Valuation Analysis - Revenue projections for 2025-2027 are estimated at 86.32 billion, 94.13 billion, and 102.82 billion respectively, with corresponding profit growth rates expected to recover significantly by 2026 [10][26]. - The target market capitalization is set at 344 billion, indicating a potential upside of 30.04% based on industry average price-to-earnings ratios [10][26].

Group 1 - Tianyu Co., Ltd. (SZ300702) has received preliminary approval for an environmental impact assessment for its subsidiary Binhai Sannong Pharmaceutical Chemical Co., Ltd.'s expansion and technical renovation project, which includes the production of various pharmaceutical products with a total investment of 85.55 million yuan [1] - The "A-share Green Report" project aims to enhance transparency in environmental information of listed companies, utilizing authoritative environmental regulatory data from 31 provinces and 337 cities [1] - The latest A-share Green Weekly Report indicated that four listed companies recently exposed environmental risks [1] Group 2 - Tianyu Co., Ltd.'s main business segments include generic drug raw materials and intermediates (72.18% of revenue), CDMO raw materials and intermediates (16.02%), formulations (11.43%), and others (0.37%) as of the 2025 semi-annual report [3] - The company's market capitalization is approximately 9.472 billion yuan, with reported revenues of 2.527 billion yuan for 2023, 2.631 billion yuan for 2024, and 1.567 billion yuan for the first half of 2025 [4] - The net profit attributable to the parent company is projected to be 273.593 million yuan for 2023, 559.351 million yuan for 2024, and 1.495118 billion yuan for the first half of 2025 [4]