Core Viewpoint - The report from Kaiyuan Securities highlights Health元's stable performance in H1 2025, with a slight increase in net profit and strong growth in various business segments [1] Financial Performance - Health元's net profit attributable to shareholders for H1 2025 reached 785 million yuan, reflecting a year-on-year increase of 1.10% [1] - The company's gross margin for H1 2025 was 62.21%, down by 1.10 percentage points, while the net profit margin improved to 22.33%, up by 1.73 percentage points [1] - In Q2 2025, the net profit attributable to shareholders was 349 million yuan, showing a year-on-year increase of 3.72% but a quarter-on-quarter decline of 19.88% [1] Business Segments - The collaboration across various business segments has been effective, with Lijun Group continuing to provide stable performance [1] - The impact of Lijun monoclonal antibody on the company's net profit has reduced losses by 62 million yuan compared to H1 2024 [1] - Sales of the drug 妥布霉素 in H1 2025 increased by 112% year-on-year, indicating strong growth [1] - The health products segment grew by 35% year-on-year, while the raw materials segment remained stable, with key product 7-ACA maintaining favorable pricing [1] - The price of meropenem raw materials has gradually stabilized after a decline [1] Future Outlook - The company is expected to maintain its innovative advantages in the respiratory sector, with projected net profits for 2025-2027 at 1.463 billion, 1.568 billion, and 1.715 billion yuan respectively [1] - Earnings per share (EPS) are forecasted to be 0.80, 0.86, and 0.94 yuan per share for the same period [1] - The current stock price corresponds to price-to-earnings (PE) ratios of 16.1, 15.0, and 13.7 times for 2025-2027 [1] - The rating for the stock is maintained as "Buy" [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a stable profit growth with an accelerated layout in innovative drugs, maintaining a "Buy" rating. In H1 2025, the company achieved revenue of 7.898 billion yuan (down 4.08% year-on-year) and a net profit attributable to shareholders of 785 million yuan (up 1.10%) [5][6] - The company has a strong focus on respiratory diseases, with over 10 innovative drugs in the pipeline, and is making significant progress in clinical trials for various treatments [6] Financial Summary - In H1 2025, the company's gross margin was 62.21% (down 1.10 percentage points), and the net profit margin was 22.33% (up 1.73 percentage points) [5] - The company expects net profits attributable to shareholders to be 1.463 billion yuan, 1.568 billion yuan, and 1.715 billion yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 0.80 yuan, 0.86 yuan, and 0.94 yuan per share [5][8] - The current stock price corresponds to a PE ratio of 16.1, 15.0, and 13.7 for the years 2025, 2026, and 2027 respectively [5] Research and Development - The company has made multiple breakthroughs in research and development, particularly in the respiratory field, with innovative drugs targeting COPD and influenza [6] - The company is advancing its clinical trials for various drugs, including a non-opioid pain relief medication, which aims to provide safer alternatives for pain management [6]