Investment Rating - The report maintains a "Recommended" rating for the company, indicating an expected stock price increase of over 15% relative to the benchmark index [5][6]. Core Views - The company's performance in the first three quarters of 2025 has been under pressure due to a seasonal decline in antibiotic demand, with a significant drop in revenue and net profit compared to the previous year [1][5]. - The price of penicillin intermediates has decreased significantly, impacting profitability, with the gross margin falling to 32.8% in the first three quarters of 2025 [2][5]. - Despite the current challenges, the company is expected to stabilize and recover as it moves past the low demand phase, particularly with the anticipated seasonal demand increase in Q4 [3][5]. - The synthetic biology segment is progressing well, with the company’s production capacity ramping up and new products entering trial phases, which could provide a second growth curve for the company [4][5]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company reported revenues of 3.44 billion yuan, a year-on-year decrease of 22.9%, and a net profit of 610 million yuan, down 43.2% [1]. - In Q3 2025 alone, revenues were 1.09 billion yuan, reflecting a 13.8% year-on-year decline but a 3.4% increase from the previous quarter [1]. Market Dynamics - The price of the key product, 6-APA, has dropped from a peak of 320 yuan/kg in December 2024 to 190 yuan/kg in September 2025, a decline of 40.6% [2]. - The overall market demand for antibiotics has weakened, influenced by lower flu-related bacterial infections, which has reduced the market usage of antibiotics [3]. Future Outlook - The company is expected to see a recovery in antibiotic prices as they are currently at historical lows, particularly with the upcoming winter demand season [3]. - The synthetic biology business is projected to grow as production capacity increases, with initial trials for methanol protein products showing positive progress [4][5]. Profit Forecast - The profit forecasts for 2025 to 2027 have been adjusted downward, with expected net profits of 820 million yuan, 930 million yuan, and 1.03 billion yuan respectively, reflecting a significant decline in 2025 but a recovery in subsequent years [5][6].

Investment Rating - The report maintains a "Recommended" rating for the company [6][8]. Core Views - The company achieved a revenue of 5.76 billion yuan in 2024, representing a year-on-year growth of 19.4%, and a net profit attributable to shareholders of 1.4 billion yuan, up 48.9% year-on-year [3]. - In Q1 2025, the company reported a revenue of 1.3 billion yuan, a decline of 14.9% year-on-year, and a net profit of 290 million yuan, down 18.3% year-on-year [3][5]. - The strong performance in 2024 was driven by robust growth in the main business, particularly in pharmaceutical intermediates, with a revenue of 5.4 billion yuan, up 19.5% year-on-year [4]. - The company is expected to see improvements in performance throughout 2025, with a focus on maintaining price stability in key products and leveraging AI technology for cost reduction [5][6]. Summary by Sections Financial Performance - In 2024, the company achieved a total revenue of 5.76 billion yuan, with a net profit of 1.4 billion yuan, and a gross margin of 36.39% [7][11]. - The forecast for 2025 indicates a slight revenue increase to 5.88 billion yuan, with net profit expected to remain stable at 1.41 billion yuan [7][11]. Business Segments - The pharmaceutical intermediates segment showed strong growth, with key products like penicillin intermediates and cephalosporin intermediates experiencing significant revenue increases [4]. - The company is expanding its synthetic biology segment, with several products entering production, indicating potential for future growth [6]. Future Outlook - The company is projected to maintain stable profit levels from 2025 to 2027, with net profits of 1.41 billion yuan in 2025 and gradually increasing to 1.46 billion yuan by 2027 [6][7]. - The anticipated PE ratios for the forecasted years are 19 for 2025 and 18 for 2026 and 2027, reflecting a stable valuation outlook [7][11].