Investment Rating - The report maintains a "Buy" rating for the company with a target price of 30.60 CNY, based on a 20x PE for 2026 [3][6]. Core Views - The company is focusing on optimizing its product structure and accelerating innovation transformation, particularly in the oncology and radiotherapy sectors, which is expected to enhance its clinical advantages and market expansion [11]. - The revenue forecast for 2025-2027 has been adjusted downwards, while gross margin and expense forecasts have been raised, leading to revised earnings per share estimates of 0.91, 1.53, and 1.96 CNY for 2025, 2026, and 2027 respectively [3][11]. Financial Performance Summary - The company reported a revenue of 8,256 million CNY in 2023, with a projected decline to 8,094 million CNY in 2024, followed by a recovery to 8,625 million CNY in 2025, representing a growth of 6.6% [4][13]. - The gross margin is expected to improve from 33.3% in 2023 to 36.3% in 2025, reflecting a strategic shift towards higher-margin products [4][13]. - The net profit attributable to the parent company is forecasted to decrease from 712 million CNY in 2023 to 477 million CNY in 2025, before rebounding to 1,028 million CNY in 2027 [4][13]. - The company’s operating profit is projected to decline significantly in 2025 to 714 million CNY, down from 978 million CNY in 2024, but is expected to recover to 1,171 million CNY in 2026 [4][13]. Business Strategy and Market Position - The company is increasing its investment in innovative drugs and high-value medical devices, with a focus on the oncology and radiotherapy markets, which is anticipated to drive future growth [11]. - The report highlights the successful launch of new products such as the Zap-X Mars Voyager, which has received regulatory approval in 24 countries, indicating a strong international market presence [11]. - The company is also pursuing a dual strategy of "investment incubation + commercialization" to transition into an innovative pharmaceutical enterprise, which includes strategic investments in other biotech firms [11].

Core Viewpoint - Baiyang Pharmaceutical is focusing on innovation and brand operation, showing strong growth in its core business despite market challenges [1][2][4] Financial Performance - In the first half of 2025, the company's revenue reached 3.751 billion yuan, and after adjusting for the two-invoice system, revenue was 4.374 billion yuan [1] - The net profit attributable to shareholders was 163 million yuan, with a net profit of 177 million yuan after excluding non-recurring gains and losses [1] Brand Operation Growth - Brand business revenue was 2.716 billion yuan, a year-on-year increase of 1.36%, accounting for 72.41% of total revenue [2] - In Q2 2025, brand revenue was 1.421 billion yuan, a quarter-on-quarter increase of 9.75% [2] - After adjusting for the two-invoice system, brand revenue was 3.339 billion yuan, a year-on-year increase of 14.91% [2] - The gross profit from brand business reached 1.286 billion yuan, with a gross profit margin of 93.99% [2] Product Innovation and Market Position - The "Calcium Supplement Expert" DQ brand generated 905 million yuan in revenue, maintaining its position as the top imported calcium supplement brand for nine consecutive years [2] - The "Anti-Liver Fibrosis" brand Fuzheng Huayu achieved revenue of 371 million yuan, a year-on-year increase of 37.42% [2] - The NutriSum brand generated 78 million yuan, with a year-on-year growth of 34.83% [2] - The original brand for dry eye treatment, Hailu, achieved revenue of 376 million yuan, a year-on-year increase of 14.86% [2] Strategic Transformation and Investment - Baiyang Pharmaceutical is accelerating its transformation into an innovative pharmaceutical company, driven by national innovation strategies [4] - The company has invested in ZAP Surgical, gaining commercialization rights for the ZAP-X robot in China, and is establishing a global production base for radiation therapy equipment [4] - Strategic investments in Huahao Zhongtian and Beihai Kangcheng have secured commercialization rights for new cancer treatment drugs in mainland China [4] - The strategic transformation aims to address industry changes and leverage the company's strengths for long-term growth [4]

Core Insights - The company reported a revenue of 3.751 billion yuan for the first half of 2025, with a net profit attributable to shareholders of 163 million yuan, indicating a focus on innovation and transformation into a pharmaceutical enterprise [1] Group 1: Financial Performance - The company's revenue, adjusted for the two-invoice system, was 4.374 billion yuan, with a net profit of 177 million yuan after excluding non-recurring gains and losses [1] - Brand business revenue reached 2.716 billion yuan, a year-on-year increase of 1.36%, accounting for 72.41% of total revenue [2] - The gross profit from brand business was 1.286 billion yuan, with a gross profit margin of 93.99%, making it the primary source of profit for the company [2] Group 2: Brand Performance - The "global calcium supplement expert" Dikao brand generated 905 million yuan in revenue, maintaining its position as the top imported calcium supplement brand in China for nine consecutive years [3] - The "first brand in anti-liver fibrosis" Fuzheng Huayu achieved revenue of 371 million yuan, a year-on-year growth of 37.42%, indicating a growing market potential [3] - The company is actively expanding its online channels to drive brand growth and optimize product structure, with a focus on high-margin products [3] Group 3: Innovation and Strategic Investments - The company is accelerating its transformation into an innovative pharmaceutical enterprise, driven by national innovation strategies and a focus on clinical value [4] - Significant investments have been made in innovative products, including partnerships with ZAP Surgical and Huahao Zhongtian, to commercialize advanced medical technologies in China [4][5] - The company has initiated promotional activities for its innovative drug Yutidelong, covering over 500 hospitals nationwide, and is advancing multiple clinical research projects [5]

Core Viewpoint - Baiyang Pharmaceutical is focusing on innovation and transformation into an innovative pharmaceutical company, with significant growth in brand operations and strategic investments in high-value innovative products [1][4][5]. Financial Performance - In the first half of 2025, Baiyang Pharmaceutical reported revenue of 3.751 billion yuan, which increases to 4.374 billion yuan when excluding the two-invoice system business. The net profit attributable to shareholders was 163 million yuan, with a net profit of 177 million yuan after excluding non-recurring gains and losses [1]. Brand Operations - The brand operation business generated revenue of 2.716 billion yuan in the first half of 2025, a year-on-year increase of 1.36%, accounting for 72.41% of total revenue. In Q2, revenue reached 1.421 billion yuan, a quarter-on-quarter increase of 9.75%. When adjusted for the two-invoice system, brand revenue was 3.339 billion yuan, up 14.91% year-on-year [2]. - Key brands include: - "Dijiao," with revenue of 905 million yuan, maintaining the top position in the domestic imported calcium supplement market for nine consecutive years. - "Fuzheng Huayu," with revenue of 371 million yuan, showing a year-on-year growth of 37.42%. - "NutriSumma," with revenue of 78 million yuan, up 34.83% year-on-year. - "Hailu," with revenue of 376 million yuan, a year-on-year increase of 14.86% [2]. Product Structure Optimization - Baiyang Pharmaceutical has successfully optimized its product structure, with the revenue share of exclusive patented products continuously increasing. The rapid growth of high-margin products has contributed to the overall increase in gross profit [3]. Innovation and Strategic Investments - The company is leveraging national innovation strategies to drive transformation in the pharmaceutical industry, focusing on clinical value and innovation as core growth engines. Baiyang is transitioning from a commercialization platform to an innovative pharmaceutical enterprise through a dual approach of "investment incubation + commercialization" [4]. - Recent strategic investments include: - ZAP Surgical, gaining commercialization rights for the ZAP-X Mars surgical robot in China. - Huahao Zhongtian, securing commercialization rights for a new generation of microtubule inhibitors. - Beihai Kangcheng, obtaining rights for specific rare disease products in mainland China and Hong Kong [4]. Progress in Innovation Projects - Baiyang Pharmaceutical has made substantial progress in various innovative projects, including: - The promotion of the drug Yutidelong, which has reached over 500 hospitals nationwide. - The first anti-drug-resistant tuberculosis drug NTB-3119M is undergoing Phase I clinical trials. - The innovative nuclear medicine drug 99mTc-3PRGD2 has been prioritized for review. - The global first innovative drug RAB001 for treating bone necrosis is in Phase II clinical trials [5].

Core Viewpoint - Baiyang Pharmaceutical is focusing on transforming into an innovative pharmaceutical company, with significant investments in innovative drugs and devices, as evidenced by its financial performance in the first half of 2025 [2][3] Financial Performance - In the first half of 2025, Baiyang Pharmaceutical reported revenue of 3.751 billion yuan, which increases to 4.374 billion yuan when excluding the two-invoice system business [2] - The net profit attributable to shareholders was 163 million yuan, with a net profit of 177 million yuan after excluding non-recurring gains and losses [2] - The brand operation business achieved revenue of 2.716 billion yuan, a year-on-year increase of 1.36%, accounting for 72.41% of total revenue [2] - When excluding the two-invoice system, brand business revenue reached 3.339 billion yuan, reflecting a year-on-year growth of 14.91% [2] - The gross profit from brand business was 1.286 billion yuan, with a gross profit margin of 93.99%, making it the main source of profit for the company [2] Strategic Initiatives - Baiyang Pharmaceutical is accelerating the introduction of new products and investment in innovation to create a second growth curve [3] - The company has strategically invested in global leaders in radiation therapy, innovative pharmaceuticals, and rare diseases, acquiring commercial rights to several innovative products [3] - Key innovative projects include the anti-drug-resistant tuberculosis drug NTB-3119M, which is in Phase I clinical trials, and the innovative nuclear medicine drug 99mTc-3PRGD2, which has been prioritized for review [3] - The globally pioneering innovative drug RAB001 for treating bone necrosis is currently undergoing Phase II clinical trials [3]

Investment Rating - The investment rating for the company is "Buy" (maintained) [4] Core Views - The company's brand operation business shows steady growth, with increased sales expenses impacting profitability [4][5] - In 2024, the company achieved a revenue of 8.09 billion yuan, a year-on-year decrease of 2.0%, while the adjusted revenue was 8.57 billion yuan [5] - The net profit attributable to shareholders for 2024 was 690 million yuan, down 2.9% year-on-year [5] - For Q1 2025, the company reported a revenue of 1.84 billion yuan, a slight decrease of 0.4% year-on-year, and a net profit of 90 million yuan, down 54.4% year-on-year [5] Business Segmentation Summary - **Brand Operation**: Revenue reached 5.56 billion yuan, up 9.2% year-on-year; adjusted revenue was 6.04 billion yuan [8] - Key products include: - Diquan: 2.1 billion yuan, up 10.7% - Hailu: 740 million yuan, up 14.9% - Baiyang Pharmaceutical: 950 million yuan, with core product revenue of 630 million yuan, up 16.6% [8] - **Wholesale Distribution**: Revenue decreased to 2.14 billion yuan, down 23% year-on-year as the company focuses on core brand operations [8] - **Retail Business**: Revenue remained stable at 370 million yuan, up 3.7% year-on-year [8] Financial Performance and Forecast - The gross margin for 2024 was 35.5%, an increase of 2.2 percentage points year-on-year, with brand operation gross margin at 48% [8] - Sales expenses increased, with sales expense ratios rising by 2.8 percentage points in 2024 and 4.3 percentage points in Q1 2025 [8] - Profit forecasts for 2025-2027 are as follows: - Net profit: 760 million yuan (2025), 901 million yuan (2026), 1.07 billion yuan (2027) - Growth rates: 10.0% (2025), 18.4% (2026), 19.2% (2027) [8] - The current price-to-earnings ratio (P/E) is projected to be 13X (2025), 11X (2026), and 9X (2027) [8] Market Position - The company is recognized as a leading pharmaceutical commercialization platform in China, demonstrating strong brand-building and multi-channel operational capabilities [8] - The company has successfully developed multiple products with revenues exceeding 100 million yuan and is accelerating its layout in innovative drugs and devices [8]

1Q25 公司销售费用率同比提升，业务结构改善驱动毛利率同比上升2024 年销售/管理/研发/财务费用率 分别为18.74%/3.47%/0.45%/0.88%，同比+4.69/+0.33/+0.30/+0.14pct；1Q25 销售/管理/研发/财务费用率 分别为19.09%/3.55%/0.29%/1.22%，同比+6.44/+0.75/+0.29/+0.56pct。公司持续加强销售费用投入， 1Q25 销售费用率同比明显提高。2024 年/1Q25 毛利率分别为35.50%/35.82%，同比+5.53/+6.07pct，我 们认为主因低毛利率的批发业务收入占比同比下降。 国内CSO 龙头企业，维持"买入"评级 公司1Q25 净利润短期受计提存货跌价准备以及销售费用率持续提高影响，长期业务合作稳定，根据业 绩情况我们上调品牌代理业务收入增速预期，上调销售费用率预期，预测公司25-27 年归母净利润分别 为7.5/9.1/10.5 亿元（相比25/26 年前值下调27%/23%），同比+8.8%/+21.5%/+15.0%，对应EPS 1.43/1.74/2.00 元。考虑到公司品牌运营业务附加值较高、相 ...