Summary of Conference Call Notes Industry Overview Steel Industry - The steel sector has experienced two rounds of market fluctuations from November to December last year and from March to April this year, influenced by anti-involution and production cut expectations. However, adjustments occurred at the end of Q2 due to the lack of concrete production cut documents. Future attention is needed on potential production cuts due to declining demand in the northern regions by year-end [1][4] - Environmental investments in the steel industry are significant, with some companies completing ultra-low emission transformations. However, about 20% of companies, mainly small and medium-sized private enterprises, have not met standards, leading to unfair competition. The handling of non-compliant capacity, estimated at around 200 million tons, is a critical future market variable [1][8][10] - Domestic real estate pressures have led to a decline in steel demand, but global emerging market demand is growing, making exports an important direction. It is essential to avoid excessive competition in exports to alleviate domestic demand pressure [1][11] Pharmaceutical Industry - The innovative drug market experienced two phases of growth from late February to late June this year, driven by Hong Kong stock valuation recovery and BD expectations. After July 1, the market quickly returned, with expectations for continued activation of the industry chain, contingent on successful BD implementation [1][13][14] - Key catalysts for the pharmaceutical industry include internationalization through overseas sales growth and product transfer methods. PD-1 and VGF dual antibodies, as well as PD-1 and interleukin combinations, are central themes, with domestic companies actively advancing these areas [1][15][19] - The long-term outlook for the Chinese pharmaceutical industry remains optimistic, driven by high-educated engineers' R&D capabilities, which enhance overseas BD potential [1][18] Key Points and Arguments Steel Industry - The steel sector's profitability remains positive, with high production enthusiasm despite pressures. The likelihood of production cuts may increase as demand in northern regions declines towards year-end [5] - The anti-involution movement is expected to strengthen in the short term, with significant price declines in coking coal and iron ore, which have contributed to steel profitability [6] - Environmental investment costs are substantial, with each ton of steel requiring an investment of 400 to 500 yuan, increasing production costs by 100 to 200 yuan. Non-compliant companies have a cost advantage of 150 to 200 yuan per ton, creating unfair competition [9] Pharmaceutical Industry - Notable companies in the PD-1 iteration include Kangfang and Sanofi, with others like Huahai and Shenzhou Cell also advancing. The interleukin field is progressing rapidly with companies like Aosaikang and Huiyu [16] - Key companies to watch in the innovative drug market include Gree, Innovent, Borui, Hengrui, and Ganli, with promising product data [17] - The current trends in the pharmaceutical industry include sustained long-term growth, the emergence of leading companies, and the realization of internationalization through BD and global commercialization [19] Other Important Insights - The steel industry must focus on the treatment of non-compliant capacity, which could significantly impact market dynamics as the anti-involution movement deepens [10] - The pharmaceutical sector's growth is expected to continue, driven by successful BD implementations and the activation of the entire industry chain [14][19]

Key Points Summary of the Conference Call for Kexing Pharmaceutical Company Overview - Kexing Pharmaceutical reported a robust performance in 2024, achieving total revenue of 1.85 billion yuan, a year-on-year increase of 60% [4][3] - The company turned a profit with a net profit of 35 million yuan, and EBITDA of 204 million yuan, reflecting over 200% growth [4][3] Financial Performance - Total revenue for 2024 reached 1.4 billion yuan, with a 12% year-on-year growth [3] - Q4 revenue was 317 million yuan, up 27% year-on-year [3] - Overseas sales revenue was 220 million yuan, marking a 60% increase [3][4] - Operating cash flow turned positive, reaching 100 million yuan [4][3] Domestic Market Performance - Domestic sales revenue was 1.18 billion yuan, showing stable growth despite the impact of centralized procurement [5][4] - The company maintained a solid domestic market presence, indicating a stable foundation [5][4] Overseas Market Performance - Kexing's overseas sales grew by 60% in 2024, primarily driven by the sales of interleukin in the EU [6][4] - The company has introduced 16 new products and established branches in multiple regions to enhance marketing capabilities [6][4] Research and Development - R&D expenses remained high at approximately 1 billion yuan, with significant investment in Phase III clinical trials [7][4] - The company is focusing on innovative products based on antibody and protein technology platforms, including the GB05 project for RSV treatment, which has entered Phase III trials [7][4] Future Development Strategy - Kexing aims to focus on protein antibodies and delivery technology innovations over the next five years, planning to establish subsidiaries for collagen, trillion replacements, and anti-tumor products [10][4] - The company targets achieving 6 NDAs and 15 INDs within five years, aspiring to become a high-quality drug export platform covering over 70 countries [10][4] Equity Incentive Plan - Kexing launched a second equity incentive plan in 2024, targeting a sales growth of 200%-400% for 2025, with a minimum sales goal of 60 million USD [9][4] Commercialization and Product Pipeline - The company has formed a trend of "introducing, launching, and scaling" its products, with expectations of reaching a minimum overseas sales peak of 1.5 billion yuan by 2026 or 2027 [12][4] - Kexing is focusing on antibody and protein drug development in oncology and autoimmune fields, emphasizing the Kexing body platform [17][4] Regulatory and Market Expansion - Kexing has established a German subsidiary to enhance its presence in the EU market, with plans to introduce 10 to 20 products focusing on oncology, autoimmune, and metabolic diseases [31][4] - The company is actively researching market demands and competition in Europe to quickly collaborate with domestic partners for product launches [31][4] Conclusion - Kexing Pharmaceutical is committed to innovation and internationalization, with clear strategic goals for the coming years, aiming to enhance its quality and market position [33][4]