Group 1 - The company plans to issue A-shares to specific investors, pending approval from the Shenzhen Stock Exchange and the China Securities Regulatory Commission (CSRC) [2][3][4] - The final issuance price will be no less than 85% of the average trading price of the company's shares over the 20 trading days prior to the pricing date [3][4][5] - The total number of shares to be issued will not exceed 25% of the company's total share capital, amounting to a maximum of 83,530,821 shares [5][6] Group 2 - The funds raised will be allocated to specific projects, including the construction of a production base for amino acids and an enhancement project for raw materials [6][7] - The company may adjust the investment priorities and amounts based on the actual net amount raised and project urgency if the net proceeds are less than planned [6][7] - The company has committed to using the raised funds in compliance with relevant regulations and will replace any pre-invested funds once the raised funds are available [6][7] Group 3 - The company operates in the pharmaceutical industry, which is subject to strict regulatory oversight from various government bodies, including the National Medical Products Administration and the National Healthcare Security Administration [19][20] - The pharmaceutical industry is characterized by significant competition and regulatory challenges, including drug approval processes and pricing regulations [19][20][21] - The company’s business encompasses pharmaceutical distribution, manufacturing, and health services, with a focus on both commercial and industrial sectors [19][20]

Group 1: Business Overview - The company primarily operates in pharmaceutical distribution and manufacturing, focusing on three main business areas: pharmaceutical production, traditional Chinese medicine processing, and chain operations [2] - The pharmaceutical distribution segment includes wholesale and retail, with a strategic partnership established with China Resources Medical to enhance market competitiveness [3] Group 2: Product and Market Strategy - Key products include raw materials and formulations, with significant items like roxithromycin tablets included in the national procurement directory, impacting pricing and sales [2] - The company aims to mitigate revenue impacts from price reductions in collective procurement by increasing sales volume [3] Group 3: Future Development Plans - The company plans to invest in a new industrial base in Shaoxing, focusing on the production of 2,400 tons of histidine and 1,000 tons each of levodopa and tyrosine [2] - The synthetic biology project is expected to begin trial production in 2025, with the potential for significant market impact due to the current dominance of foreign companies in the high-end amino acid market [3] Group 4: Health Services and Market Expansion - The revenue contribution from maternal and infant care centers and traditional Chinese medicine services is currently below 5%, with a cautious approach to expansion through mergers or partnerships [3] - The company is focused on optimizing resource allocation to support the growth of its wholesale business [3] Group 5: Technological Advancements - The synthetic biology technology is recognized as a breakthrough, aligning with national strategic emerging industries and policies promoting fermentation-based production methods [3] - The company anticipates that successful commercialization of synthetic biology projects could positively impact financial performance in the current fiscal year [3]

Investment Rating - The investment rating for the pharmaceutical and biotechnology industry is "Positive" (maintained) [1] Core Views - The report highlights that the operating turning point for Guobang Pharmaceutical is evident, with the animal health business expected to contribute significantly to performance elasticity [5][13] - The pharmaceutical raw materials sector is maintaining a high level of prosperity due to upstream intermediate supply constraints and sustained post-pandemic demand [6][27] - The animal health raw materials sector is nearing the end of a market clearing phase, with prices for strong antibiotics showing a continuous recovery [7][42] Summary by Sections Guobang Pharmaceutical - Guobang Pharmaceutical has shown steady revenue growth, increasing from 4.206 billion in 2020 to 5.891 billion in 2024, with profits stabilizing around 800 million [13][14] - The gross margin for animal health raw materials has decreased significantly, reaching a historical low of 18.9% in 2024, while the gross margin for pharmaceutical raw materials has improved to 28.4% [17][19] - The company is experiencing a recovery in profitability, with gross margin, net margin, and ROE showing signs of improvement in 2024 [19][25] Pharmaceutical Raw Materials - The pharmaceutical raw materials segment, particularly macrolide antibiotics, is expected to maintain high profitability due to limited upstream supply and stable demand growth [6][27] - Key products include Azithromycin, Clarithromycin, and Roxithromycin, with the core raw material being thiocyanate erythromycin, which is crucial for production [27][30] Animal Health Raw Materials - The animal health raw materials market is stabilizing, with strong antibiotic prices recovering after a prolonged decline [7][42] - The market for strong antibiotics has shifted from over ten competitors to about three major players, with Guobang Pharmaceutical holding a significant market share [7][49] - The price of Florfenicol has dropped significantly from 500 RMB/kg in 2022 to around 180 RMB/kg in 2024, but is now showing signs of stabilization [7][50] Market Performance - In May, the pharmaceutical and biotechnology sector rose by 1.78%, outperforming the CSI 300 index by 1.96 percentage points, ranking first among 31 sub-industries [55][60] - The other biopharmaceutical sub-sector showed the highest growth, while the hospital sector experienced the largest decline [60][61]