Core Viewpoint - The report from Open Source Securities highlights the rapid growth of Enhua Pharmaceutical's neurology business, with clear performance drivers, and maintains a "Buy" rating [1] Group 1: Business Performance - Enhua Pharmaceutical is deepening its product differentiation advantages, achieving stable growth in mature products such as Levofloxacin, Fentanyl, and Remifentanil [1] - The company is accelerating market development for innovative products including TRV130, Oxycodone injection, Sufentanil, Alfentanil, and the new product AnTaiTan® in collaboration with BD [1] Group 2: Research and Development - Enhua Pharmaceutical is increasing its R&D investment, currently having 17 innovative drug projects under research [1] - The company has completed one Phase III clinical trial (NH600001 emulsion injection) and two Phase II clinical trials (NHL35700 tablets, YH1910-Z02 injection) [1] - Two Phase II clinical trials are ongoing (NH102 tablets, YH1910-Z01 nasal spray), and six Phase I clinical trials are in progress (NH130 tablets, NH104 tablets, Protollin nasal spray, NH160030 tablets, NH140068 tablets, NH280105 capsules) [1] - One project has received a clinical trial notification (Citrate Sufentanil injection for new indications), while the remaining projects are in preclinical research stages, indicating significant market potential [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's neuro-related business is experiencing rapid growth, and its innovative pipeline is gradually being realized. The performance drivers are clear, and the company is expected to maintain its profit forecast [4][5] Financial Performance Summary - In H1 2025, the company achieved revenue of 3.01 billion yuan (up 8.93% year-on-year, up 2.59% quarter-on-quarter) and a net profit attributable to shareholders of 700 million yuan (up 11.38% year-on-year, up 36.11% quarter-on-quarter). The gross margin was 75.24% (up 2.74 percentage points), and the net margin was 23.26% (up 0.59 percentage points) [3][4] - For Q2 2025, the company reported revenue of 1.499 billion yuan (up 6.64% year-on-year, down 0.77% quarter-on-quarter) and a net profit of 400 million yuan (up 9.94% year-on-year, up 32.95% quarter-on-quarter) [3] Business Segment Performance - In H1 2025, the revenue breakdown by business segment was as follows: Anesthesia products at 1.634 billion yuan (up 7.32%), psychiatric products at 621 million yuan (up 4.29%), neuro products at 166 million yuan (up 107.33%), raw materials at 90 million yuan (down 6.17%), and commercial pharmaceuticals at 394 million yuan (up 9.80%) [4] Future Profit Forecast - The company is expected to achieve net profits attributable to shareholders of 1.294 billion yuan, 1.495 billion yuan, and 1.746 billion yuan for the years 2025, 2026, and 2027, respectively. The expected EPS for these years is 1.27 yuan, 1.47 yuan, and 1.72 yuan per share, with corresponding P/E ratios of 17.5, 15.2, and 13.0 times [4][8] R&D and Innovation Pipeline - The company is focusing on product differentiation and has 17 innovative drug projects in development. It has completed one Phase III clinical trial and two Phase II trials, with several other projects at various stages of clinical research [5]

Group 1: Company Performance and Sales - The company achieved approximately 1 billion in sales for Antitan after leveraging its sales channel advantages [2] - Oxycodone generated nearly 5 billion in revenue last year, indicating strong market performance [2] - The sales target for Midazolam injection in 2024 is projected to reach around 7 billion [2] - The company expects a sales figure of 2 billion for Oligo in 2025, with over 1,500 hospitals anticipated to adopt the product [1] Group 2: Market Strategy and International Expansion - Domestic sales account for 98.55% of total sales, while international sales represent only 0.41% [1] - The company plans to accelerate international expansion through external product introductions and self-developed project licensing [1] - The company is focusing on strategic partnerships and licensing opportunities to enhance its international presence [4] Group 3: Product Development and Pipeline - NH600001 is progressing well, with NDA submission expected in the second half of this year and approval anticipated in the first half of 2027 [1] - The company is developing long-acting formulations, including Aripiprazole long-acting injection, currently in clinical stages [3] - NH102, NH130, and NH160030 are innovative drug projects in clinical phases, targeting depression and Parkinson's disease symptoms [4] Group 4: Market Challenges and Regulatory Impact - The company acknowledges ongoing challenges in the pain management sector due to competition from other firms [1] - The impact of national procurement policies on the company's operations is considered minimal, but local procurement remains uncertain [2] - The company aims for double-digit growth despite the challenges posed by procurement policies [2] Group 5: Future Outlook and Growth Projections - The company anticipates double-digit growth in the anesthesia, mental health, and neurological sectors [6] - Strategic focus on core competencies is expected to enhance competitive advantages in the market [7] - The company is optimistic about achieving a robust growth trajectory over the next 3-5 years [4]