Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% relative to the benchmark index within the next six months [2][13]. Core Insights - The company reported a significant revenue increase of 44.2% year-on-year for the first three quarters of 2025, with total revenue reaching 276.0 billion yuan. The net profit attributable to shareholders was 11.4 billion yuan, a turnaround from a loss of 36.9 billion yuan in the same period last year [5][6]. - The global revenue for the drug Zebutinib surpassed 1 billion USD, with a notable growth of 53.2% in the first three quarters of 2025. The revenue breakdown shows strong performance in various regions, particularly in China, where it grew by 359% [6][9]. - The company has adjusted its full-year revenue guidance from 50-53 billion USD to 51-53 billion USD, while maintaining its guidance for positive GAAP operating profit [5][6]. Financial Performance Summary - For Q3 2025, the company achieved a revenue of 100.8 billion yuan, representing a 41.1% increase year-on-year. The gross margin for Q3 was reported at 85.9%, an increase of 3.1 percentage points compared to previous quarters [6][7]. - The projected revenues for 2025, 2026, and 2027 are 371.0 billion yuan, 471.5 billion yuan, and 581.8 billion yuan, respectively, with year-on-year growth rates of 36.3%, 27.1%, and 23.4% [9][11]. - The net profit attributable to shareholders is expected to reach 8.2 billion yuan in 2025, with a staggering growth of 116.5% compared to the previous year [9][11].

Core Viewpoint - In 2024, the Hong Kong pharmaceutical sector experienced significant declines due to external factors, with the Hang Seng Healthcare Index down 18.93% and the Hong Kong Innovative Drug Index down 10.80%. However, Ascentage Pharma-B (06855) saw a remarkable stock price increase of 66.48%, outperforming the indices due to multiple unexpected positive developments in product internationalization, innovative research, and secondary market financing, validating the company's "investment certainty" [1]. Financial Performance - Ascentage Pharma reported a revenue of RMB 981 million in 2024, a substantial increase of 342% year-on-year. The sales revenue of the core product, Nairik (耐立克®), reached RMB 241 million, reflecting a growth of approximately 53%. The company's cash flow improved, with a monetary fund balance of RMB 1.261 billion as of December 31, 2024, up 15.3% year-on-year [2]. Product Development and Market Potential - Nairik has successfully passed the 2024 National Medical Insurance negotiation process and will be included in the new National Medical Insurance Drug List starting January 1, 2025. This inclusion indicates strong recognition of the drug's innovative capabilities by the domestic medical system, which typically leads to rapid sales growth for innovative drugs post-inclusion [2]. - Ascentage Pharma signed a $1.3 billion exclusive option agreement with Takeda Pharmaceutical for Nairik, setting a new record for domestic small molecule oncology drug business development transactions [3]. Clinical Advancements - Nairik is positioned to become the first TKI drug approved for first-line treatment of Philadelphia chromosome-positive acute lymphoblastic leukemia (Ph+ ALL) in China, with significant market potential. The drug has been included in the "Breakthrough Therapy Designation" list and is expected to generate considerable sales growth in the Ph+ ALL treatment market [4][5]. - In the solid tumor field, Nairik's Phase III clinical trial for treating SDH-deficient GIST patients has received approval, and the drug has shown excellent anti-tumor effects in various clinical presentations [4]. Research and Development - Ascentage Pharma's R&D investment reached RMB 947 million in 2024, supporting strong revenue growth and cash flow expectations. The company is conducting ten registration clinical trials, with two receiving FDA approval, laying a solid foundation for exploring the global differentiated innovative drug market [5]. - The company has two core products, Nairik and APG-2575, both with billion-dollar potential, alongside several other promising candidates in development. Ascentage holds 541 global patents, with 379 granted overseas, establishing a robust global intellectual property framework [5]. Market Position and Future Outlook - APG-2575, a Bcl-2 inhibitor, has been accepted for priority review by the NMPA for treating refractory or relapsed chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL). It is expected to become the second Bcl-2 inhibitor approved globally, with projected sales exceeding $2 billion [6][7]. - Ascentage Pharma successfully listed on the US stock market in 2024, raising approximately $126 million, enhancing its international financing channels. The company is well-positioned as a high-value biopharmaceutical investment in the US market [7]. Conclusion - With strong cash flow and an integrated innovation loop, Ascentage Pharma is accelerating its transition to a leading global biopharma through systematic competition in global R&D, overseas registration, and international commercialization [8].

Investment Rating - The report initiates coverage with an OUTPERFORM rating for BeiGene [2]. Core Views - BeiGene is positioned as a leading innovator in China's biopharmaceutical sector, with a strong focus on oncology treatments and a robust pipeline of over 60 clinical projects globally [3][11]. - The company is expected to achieve profitability by 2025, driven by significant revenue growth from its core products, particularly the BTK inhibitor, Zanubrutinib, which is projected to double its revenue in 2024 [4][20]. - BeiGene's global commercialization capabilities and a well-established management team are key competitive advantages that will support its growth trajectory [12][29]. Summary by Sections 1. Innovative Product Globalization - BeiGene has a diverse product pipeline and aims to become the first biopharma company to achieve consistent profitability [11]. - The company has 17 commercialized products, including Zanubrutinib and Tislelizumab, with strong sales performance in the US and Europe [20]. - Revenue for 2024 is projected at $3.81 billion, a 55% increase year-over-year, with significant contributions from the US market [20]. 2. Leadership in Hematology - The combination of BTK inhibitors and BCL-2 inhibitors is expected to solidify BeiGene's leadership in hematological malignancies [5]. - Zanubrutinib has shown superior efficacy compared to Ibrutinib, establishing its best-in-class status [5][24]. - The company is also developing Sonratoclax, a BCL-2 inhibitor, which is anticipated to enhance its market position [5]. 3. Expansion in Solid Tumors - BeiGene is actively expanding its presence in solid tumors, with Tislelizumab gaining traction in various indications [11]. - The company is developing next-generation CDK inhibitors targeting a market exceeding $10 billion [11]. - Focus areas include lung cancer and breast cancer, with ongoing clinical trials for multiple candidates [11]. 4. Financial Projections and Valuation - Revenue forecasts for FY25-27 are $5 billion, $6 billion, and $6.7 billion, respectively, with a CAGR of 21% [7]. - The net profit is expected to turn positive by FY25, reaching $390 million by FY26 [7]. - The target price is set at HK$182.35, based on a DCF model with a WACC of 9% and a perpetual growth rate of 4% [7].