Core Viewpoint - Huaxi Securities has initiated coverage on Yuan Da Pharmaceutical (00512) with an "Accumulate" rating, highlighting significant upside potential in the company's valuation due to its robust barriers in the nuclear medicine sector and the rollout of innovative drugs [1] Group 1: Financial Projections - The company is projected to achieve total revenues of HKD 12.27 billion, HKD 13.46 billion, and HKD 14.70 billion for the years 2025, 2026, and 2027 respectively [1] - Corresponding net profits for the parent company are expected to be HKD 2.01 billion, HKD 2.25 billion, and HKD 2.56 billion for the same years, with EPS estimates of HKD 0.57, HKD 0.63, and HKD 0.72 [1] Group 2: Product Development and Market Potential - The company has successfully completed Phase II clinical trials for its globally pioneering drug STC3141, showing significant improvement in SOFA scores in the high-dose group compared to the baseline, with a p-value of less than 0.05 [1] - STC3141 targets the core of immune dysregulation in sepsis through an innovative mechanism, potentially filling a 40-year gap in targeted drug therapies, and is expected to open a market worth over HKD 10 billion [1] - The company has a solid foundation with over 260 medical insurance products, and core respiratory products like Cheno are projected to drive nearly 27% growth in 2024 [2] Group 3: Business Transformation and Growth - The revenue share from innovative and barrier products has rapidly increased to 51% in the first half of 2025, up from 36.1% in the same period last year, indicating significant transformation [2] - Star products such as Yigan Tai®, Enzhuo Run®/Enming Run® (asthma inhalation preparations), LavaTM, and Nengqilang® are accelerating in market release, creating a favorable dynamic of stable growth in traditional business and explosive growth in innovative business [2] - The company is expected to enter a value reassessment cycle as nuclear medicine expands, innovative drugs are launched, and traditional business remains stable [2]

Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Insights - The company reported a revenue of HKD 6.11 billion for H1 2025, representing a year-on-year growth of 1.0%. However, the net profit attributable to shareholders was HKD 1.17 billion, a decline of 25.0% year-on-year. Excluding the impact of Telix investment, the net profit would be HKD 1.02 billion, reflecting a decrease of 5.9% year-on-year [2][6]. - The company's innovative and barrier products continue to gain traction, with significant revenue contributions. The revenue from the nuclear medicine oncology segment reached HKD 420 million, a year-on-year increase of 106%. The ENT segment generated HKD 1.49 billion, up 23% year-on-year, while the respiratory and critical care segment reported HKD 1.05 billion, a growth of 10% year-on-year. The revenue from innovative and barrier products accounted for 51.0% of total revenue, an increase of 14.9 percentage points year-on-year [6][9]. - The company has made breakthroughs in nuclear medicine and is advancing its innovative pipeline. The first fully automated "zero radiation" nuclear medicine R&D and production facility has received a Class A radiation safety license and is now operational. The product Yttrium-90 microsphere injection has received FDA approval for a new indication, and five innovative RDC drugs have been approved for registration clinical trials in China, with four entering Phase III trials [6][9]. - Revenue forecasts for the company are projected at HKD 12.25 billion, HKD 13.51 billion, and HKD 15.12 billion for 2025-2027, with net profits expected to be HKD 2.12 billion, HKD 2.45 billion, and HKD 2.80 billion respectively. Corresponding EPS estimates are HKD 0.60, HKD 0.69, and HKD 0.79 [6][9].

Investment Rating - The investment rating for the company is "Buy" [4][9]. Core Insights - The company achieved a revenue of HKD 6.107 billion in the first half of 2025, representing a year-on-year growth of approximately 1.0%, with a 2.0% increase in RMB terms. Excluding the impact of the tenth batch of centralized procurement price reductions, the revenue in RMB terms increased by about 13.0% [1][4]. - The nuclear medicine oncology segment recorded revenue of approximately HKD 421.78 million, a significant increase of about 105.5% compared to the same period in 2024 [1][2]. - The company's net profit attributable to shareholders was HKD 1.169 billion, with a slight decline of about 5.9% after excluding the impact of Telix investments [1][3]. - The company continues to invest in research and development, with total R&D expenditures amounting to approximately HKD 1.022 billion [1]. Summary by Sections Performance Overview - In the first half of 2025, the company reported a revenue of HKD 6.107 billion, a year-on-year increase of approximately 1.0%. In RMB terms, the revenue grew by about 2.0%, and excluding the impact of price reductions from centralized procurement, the growth was around 13.0% [1][4]. - The nuclear medicine oncology segment saw revenue of approximately HKD 421.78 million, up about 105.5% from approximately HKD 207.24 million in the same period of 2024 [1][2]. Product Development and Pipeline - The company is focusing on innovation-driven product structure optimization, with revenue from innovative and barrier products accounting for 51.0%, an increase of 14.9 percentage points year-on-year [2]. - The company has successfully advanced its nuclear medicine innovation products globally, with over 900 employees in the nuclear medicine oncology sector [2]. Financial Forecast - Revenue projections for 2025-2027 are estimated at HKD 12.254 billion, HKD 13.376 billion, and HKD 14.779 billion, representing year-on-year growth rates of 5.2%, 9.2%, and 10.5% respectively [3]. - The net profit attributable to shareholders is projected to be HKD 2.185 billion, HKD 2.462 billion, and HKD 2.706 billion for the same period, with growth rates of -11.5%, 12.7%, and 9.9% respectively [3].