Financial Performance - In the first three quarters of 2025, the company reported total revenue of CNY 1.473 billion, an increase of 18.38% year-on-year, while net profit attributable to shareholders decreased by 16.90% to CNY 342 million [2][3] - The decline in net profit is primarily due to inventory write-offs and asset depreciation resulting from the acquisition of Green Cross [2][3] Business Operations - The company continues to focus on blood products, successfully transferring 80% of its stake in Boya Xin to Fuzhou High-tech Zone Financial Investment Group in September [2][3] - Plasma collection reached 492 tons in the first nine months of 2025, a 5.2% increase compared to the same period last year, exceeding industry growth rates [3][5] Market Strategy - The company is adapting its marketing strategies in response to the results of the Guangdong Alliance procurement, which has seen stable pricing for blood products despite overall industry profit declines [3] - The management model for Green Cross includes three business centers to enhance integration and improve operational efficiency, leading to increased revenue and profit levels compared to pre-acquisition [3][4] Product Development - The company is promoting its 10% intravenous immunoglobulin (IVIG) product, with sales contingent on production schedules and regulatory approvals [3] - Factor products are experiencing rapid sales growth, supported by enhanced academic promotion and management strategies [3][4] Future Outlook - The company plans to expand its plasma collection stations, with a focus on new site approvals and operational efficiency to ensure growth above industry averages [6][9] - The internationalization strategy includes registering products in markets with favorable regulatory environments before targeting stricter markets like Europe and the US [8][9] - The company aims to enhance its product pipeline and optimize production processes to improve overall plasma utilization and revenue per ton of plasma [9]

Core Insights - Vietnam and Russia are enhancing cooperation in the field of biopharmaceuticals, particularly in vaccine and drug production technology transfer [1][2] - VNVC has established a nationwide service network with nearly 240 vaccination points, capable of providing tens of millions of high-quality vaccines annually [2] - VNVC's new vaccine factory is under construction and is expected to produce hundreds of millions of vaccines and bioproducts annually by the end of 2027 [2] Group 1: Cooperation Agreement - Medsintez and VNVC signed a comprehensive cooperation agreement to advance the research, production, and clinical trials of new drugs and vaccines [1] - The technology transfer includes high-tech biopharmaceuticals such as recombinant albumin, recombinant insulin, and various diabetes treatment drugs [1] - The collaboration will also focus on clinical research for the antiviral drug Triazavirin in dengue fever treatment [1] Group 2: VNVC's Capabilities and Future Plans - VNVC's new vaccine factory will start production of next-generation vaccines and advanced biopharmaceuticals from Russia and other countries by 2027 [2] - VNVC has previously signed cooperation agreements with significant partners in the biotechnology field to promote the commercialization of high-tech biopharmaceuticals, including anti-cancer mRNA vaccines [2] - Medsintez is recognized as a leading biopharmaceutical company in Russia with over 20 years of experience in drug and medical device development [2]

Investment Rating - The report indicates a bullish outlook on the major fermentation industry in China, highlighting it as a trillion-level bio-economy with diverse application scenarios that will drive the industry's growth curve [3][4]. Core Insights - Fermentation technology is becoming a core application direction in synthetic biology due to its green production, cost advantages, and technological innovations. It utilizes microbial metabolism to achieve sustainable production, significantly reducing carbon emissions and energy consumption [3][4]. - The Chinese fermentation industry is experiencing rapid growth driven by policy support, expansion of the biopharmaceutical market, and technological breakthroughs. The biopharmaceutical market is projected to grow from 218.5 billion yuan in 2017 to 620.3 billion yuan in 2024, accounting for 32% of the pharmaceutical market [4][31]. - Future development of the Chinese fermentation industry requires overcoming technical bottlenecks and accelerating cross-sector application penetration, with a focus on transforming from a pharmaceutical-dominated market to a multi-sector collaborative approach [5][34]. Summary by Sections Industry Overview - The report provides a comprehensive analysis of the current state of the fermentation industry in China and globally, including product characteristics, technological trends, and competitive landscape [3][4]. Key Drivers - The fermentation industry in China is driven by multiple factors: - Policy support from the government, which includes the incorporation of biological manufacturing into the "14th Five-Year Plan" and the implementation of carbon tax policies [4]. - The biopharmaceutical market's rapid expansion, which directly stimulates the demand for fermentation capacity [4][31]. - Technological advancements such as AI-assisted strain design and high-throughput screening that address traditional fermentation challenges [4][5]. Challenges - The industry faces challenges such as limitations in product concentration and purity, difficulties in strain selection and cultivation, and high production costs. The current market is heavily focused on the medical field, which accounts for 80% of the applications, while emerging sectors like food and agriculture have lower technological maturity [5][34]. Market Potential - The fermentation market is expected to grow significantly, with projections indicating that the global and Chinese fermentation market sizes will exceed 160 billion yuan and 120 billion yuan respectively by 2030, with a compound annual growth rate (CAGR) of 42.5% from 2024 to 2030 [47][53]. Competitive Landscape - The fermentation market is characterized by a high concentration of leading enterprises in the midstream production and processing segment, with a focus on continuous R&D investment and capacity integration to build competitive advantages [34][38]. - Key players include both international firms with established market presence and Chinese companies that are rapidly advancing in technology and market coverage [39][41].

Core Viewpoint - The blood products industry, once considered a "golden track," is facing significant challenges in Q1 2025, with major companies experiencing over 20% declines in net profits, contrasting sharply with their strong performance in 2024. This downturn is attributed to a combination of price wars, inventory buildup, and technological substitution [1]. Group 1: Financial Performance - TianTan Bio reported a revenue increase of 7.84% to 1.318 billion yuan, but its net profit plummeted by 22.9%. Operating cash flow fell by 65.75%, and accounts receivable surged by 1093%, indicating deteriorating sales collection efficiency [2]. - Boya Bio's revenue grew by 19.49%, yet its net profit decreased by 8.25%, with core products like human albumin seeing price declines of 2.65% to 12% [2]. - Pailin Bio experienced a revenue drop of 14% and a net profit decline of 26.95%, with operating expenses rising to 18.04%, indicating a failure in cost control [2]. - Shanghai Laishi's net profit growth rate fell from 23.25% to -25.20%, highlighting operational pressures despite expansion efforts [2]. Group 2: Industry Dynamics - The industry's sudden performance decline is driven by price wars, inventory accumulation, and technological substitution. In 2024, blood product inventory growth (36.02%) significantly outpaced cost growth (7.12%), forcing companies to lower prices to clear stock. The terminal price of human albumin has dropped to 350-380 yuan per bottle [3]. - Although not included in national procurement, regional alliance negotiations and competition from imported products create "invisible procurement pressure," with imported albumin's market share rising to 69% and over 70% in tertiary hospitals [3]. - Disruptive technologies are eroding the industry's competitive advantages, with plant-based recombinant albumin potentially reducing costs to below 10 yuan per gram, halving current blood-derived product prices. Additionally, recombinant coagulation factor VIII has captured a 30 billion yuan market share, further compressing the premium space for blood-derived products [3]. Group 3: Opportunities and Challenges - The reliance on imports and the threat from recombinant technologies make domestic production crucial for overcoming current challenges. Tariffs on imports from the U.S. could increase imported albumin prices by 10%-15%, highlighting the cost-effectiveness of domestic products, which currently hold a 31% market share that needs to rise above 50% [4]. - Leading companies are accelerating technological advancements, with TianTan Bio achieving a revenue of over 6 million yuan per ton of plasma and aiming for a 50% domestic production rate for coagulation factors. Shanghai Laishi is investing 4.2 billion yuan to acquire Nanyue Bio, increasing its plasma collection stations to over 50, with the top five companies controlling over 80% of plasma collection [4]. - However, the disruptive threat from recombinant technologies remains, with the clinical adaptation and market education for recombinant albumin expected to take 5-8 years, providing traditional companies with a valuable window for transformation [4]. Group 4: Conclusion - The blood products industry's challenges are not coincidental but rather a painful transition in market logic. As price wars and inventory pressures push companies towards efficiency competition, the race for survival in this trillion-yuan market will test not only the number of plasma collection stations but also product quality, cost control, and strategic foresight [5].