Core Viewpoint - Rongchang Biopharmaceutical (9995.HK) has announced a H-share placement plan to raise approximately HKD 796 million, reflecting the company's ongoing financial challenges despite a significant revenue increase in 2024 [2][4]. Financial Performance - In 2024, Rongchang Biopharmaceutical reported a revenue of approximately CNY 1.72 billion, a year-on-year increase of 58.54%, but still faced a net loss of CNY 1.468 billion [3][4]. - The company has experienced losses in six out of the seven years since its establishment, with a peak loss of CNY 1.511 billion in 2023 [4][5]. - In Q1 2025, the company achieved a revenue of CNY 526 million, representing a 59.17% year-on-year growth, but continued to incur a net loss of CNY 254 million [4][7]. Product Development and Market Position - Rongchang Biopharmaceutical focuses on innovative biopharmaceuticals, particularly in antibody drug conjugates and therapeutic antibodies [4][6]. - The company has two commercialized products: RC18 (Taitasip) and RC48 (Vidisizumab), which have contributed to its revenue growth since their market approval [6][8]. - Despite the growth in sales, the company faces challenges with slowing growth rates for its core products, indicating potential market saturation or increased competition [6][8]. Funding and Financial Strategy - The recent H-share placement is a critical move to address the company's cash flow pressures and support ongoing research and development efforts [2][8]. - The company has faced difficulties in previous fundraising attempts, including a failed private placement in 2024, highlighting ongoing financial strain [9][10]. - As of Q1 2025, the company's cash reserves decreased to CNY 722 million, while short-term borrowings reached CNY 1.131 billion, indicating significant debt pressure [8][9]. Industry Context - The biopharmaceutical industry is characterized by high research and development costs and long commercialization timelines, leading to widespread financial challenges among similar companies [8]. - Experts suggest that companies need to optimize cost structures and enhance collaboration to achieve profitability in a competitive market [8].

Core Viewpoint - The Hong Kong stock market has seen a rise in discounted placements, with Rongchang Biopharmaceutical (09995.HK) announcing a placement of 19 million shares to raise approximately HKD 796 million, indicating strong market interest despite the company's ongoing losses [1][2][3]. Group 1: Placement Details - Rongchang Biopharmaceutical plans to place up to 19 million H-shares, representing about 10.02% of existing H-shares and 3.49% of total shares as of the announcement date [2]. - The placement price is set at HKD 42.44 per share, reflecting a discount of approximately 9.51% from the closing price on May 21 [2]. - The net proceeds from the placement are expected to be around HKD 796 million, aimed at enhancing research capabilities and business expansion [2]. Group 2: Financial Performance - Despite a revenue increase of 59% to RMB 1.71 billion in 2024, Rongchang Biopharmaceutical continues to operate at a loss, with a net loss of RMB 254 million in Q1 2025, which is a 27% increase in losses year-on-year [6][7]. - The company has only recorded a profit in 2021, primarily due to a licensing agreement with Seattle Genetics, which generated a net profit of RMB 276 million [6][5]. - As of Q1 2025, the company had cash and cash equivalents of RMB 719 million, indicating some liquidity but ongoing pressure on cash flow due to continuous losses [7]. Group 3: Product Pipeline and Market Potential - Rongchang Biopharmaceutical has developed over ten candidate drugs, with seven in clinical development targeting more than twenty indications [3]. - The company’s marketed products, including RC18 and RC48, are undergoing clinical trials for various indications, with RC48 being the first ADC drug in China to receive dual breakthrough therapy designation from both the FDA and the Chinese regulatory authority [4][3]. - The company is focusing on expanding the indications for its core product RC18, which has already received approvals for systemic lupus erythematosus and is expected to gain further approvals in the near future [4]. Group 4: Market Sentiment and Stock Performance - Since the beginning of 2025, Rongchang Biopharmaceutical's stock has surged over 240%, reflecting strong market sentiment and positioning for the placement [8]. - The stock's performance on May 22, where both A and H shares opened low but closed higher, suggests a positive market reaction to the placement announcement [8].

证券研究报告·行业跟踪周报·医药生物 增持（维持） 医药生物行业跟踪周报 [Table_Tag] [Table_Summary] 投资要点 GLP-1 药物成为药王，建议关注博瑞医药、 信达生物、联邦制药等 2025 年 05 月 11 日 证券分析师 朱国广 执业证书：S0600520070004 zhugg@dwzq.com.cn 东吴证券研究所 1 / 26 请务必阅读正文之后的免责声明部分 ◼ 本周、年初至今 A 股医药指数涨幅分别为 1.0%、1.2%，相对沪深 300 的超额收益分别为-1.0%、3.4%；本周、年初至今 H 股生物科技指数涨 跌幅分别为-4%、27%，相对于恒生科技指数跑赢-19%、29 %；本周 A 股医疗器械（+1.7%）、中药（+1.5%）、生物制品（+1.1%）股价明显上 涨，原料药（+0.8%）、医疗服务（+0.5%）、化药（+0.6%）及医药商业 （+0.4%）等股价有所下跌；本周 A 股涨幅居前锦好医疗（+24%）、常 山药业（+24%）、海创药业-U（+23%），跌幅居前*ST 葫芦娃(-18%)、 永安药业（-18%）、*ST 苏吴（-15%）；本周 H 股涨幅 ...

Core Viewpoint - Rongchang Biopharma disclosed its research reception announcement, indicating strong financial performance and significant progress in core pipeline development for 2024, with a focus on various therapeutic areas [1][2]. Financial Overview - The company reported a revenue of 1.717 billion yuan for 2024, representing a year-on-year growth of 58.5% [7]. - The sales expense ratio for 2024 was 55.3%, a decrease of 16.3 percentage points compared to the previous year [7]. - Research and development expenses increased to 1.54 billion yuan, up 17.9% year-on-year [7]. - The overall gross margin for 2024 was 80.4%, an increase of 3.0 percentage points from the previous year [7]. - As of the end of 2024, the company had approximately 1 billion yuan in cash and cash equivalents, with sufficient loan credit lines available [7]. Core Pipeline Development Progress 1. **RC18 in China** - Myasthenia Gravis (MG): BLA application has been accepted, with data presented at the AAN conference showing significant clinical efficacy [4]. - Primary Sjögren's Syndrome (pSS): Phase III enrollment is complete, with normal progress in medication and follow-up [4]. - IgA Nephropathy (IgAN): Phase III enrollment is complete, with normal progress in medication and follow-up [4]. 2. **RC18 Overseas** - Systemic Lupus Erythematosus (SLE): Phase III international multicenter clinical research is ready [5]. - Myasthenia Gravis (MG): Continuous enrollment in Phase III [5]. 3. **RC48 in China** - Urothelial Carcinoma (UC): Phase III for first-line combination therapy is complete, with normal progress in medication and follow-up [6]. - Gastric Cancer (GC): Phase III for first-line combination therapy has started, with patient enrollment underway [6]. 4. **Other Pipeline Developments** - RC88: Phase II clinical trial for advanced malignant solid tumors has completed enrollment [10]. - RC148: Observed good efficacy and safety in single-agent clinical exploration, with ongoing Phase II trials for advanced lung cancer [11]. - RC278: ADC drug using next-generation conjugation technology for various solid tumors [12]. - RC28: Phase III clinical trials for diabetic macular edema (DME) and wet age-related macular degeneration (wAMD) have completed enrollment [13].