Investment Rating - The report gives a "Buy" rating for the company, 康龙化成, for the first time [1][9]. Core Views - 康龙化成 is positioned as a leading global drug research and development enterprise with a comprehensive, integrated, international, and multi-therapy approach. The company is expected to experience significant growth across its various service segments, including laboratory services, small molecule CDMO, clinical CRO, and large molecule and cell gene therapy services [6][8][9]. Financial Summary - Total revenue projections for 康龙化成 are as follows: - 2024: 12,276 million CNY - 2025: 13,816 million CNY - 2026: 15,688 million CNY - 2027: 17,879 million CNY - The expected growth rates are 6.4% for 2024, 12.5% for 2025, 13.5% for 2026, and 14.0% for 2027 [2]. - Net profit attributable to shareholders is projected to be: - 2024: 1,793 million CNY - 2025: 1,689 million CNY - 2026: 1,959 million CNY - 2027: 2,257 million CNY - The expected growth rates for net profit are 12.0% for 2024, -5.8% for 2025, 15.9% for 2026, and 15.2% for 2027 [2]. Business Segments Laboratory Services - Laboratory services are the most competitive segment for 康龙化成, contributing significantly to revenue and profit. In 2024, this segment is expected to generate revenue of 70.47 billion CNY, accounting for 57.4% of total revenue [23]. - The segment has shown a compound annual growth rate (CAGR) of 24.25% in revenue from 2015 to 2024 [23][26]. CMC (Small Molecule CDMO) Services - The CMC segment is entering a commercialization phase, with revenue expected to reach 29.89 billion CNY in 2024, representing 24% of total revenue [45]. - The company has established four FDA-approved production bases in China, the UK, and the US, enhancing its capacity for global clients [49][53]. Clinical CRO Services - The clinical CRO segment is expected to generate revenue of 18.26 billion CNY in 2024, accounting for 14.87% of total revenue [63]. - The company has built a comprehensive clinical CRO service platform across China, the US, and the UK, which is anticipated to enhance efficiency and profitability [66]. Large Molecule and Cell Gene Therapy Services - The company is rapidly advancing in large molecule and cell gene therapy services, with expectations of approximately 10% revenue growth over the next three years [6][20]. Valuation and Price Target - The target price for 康龙化成 is set at 47.73 CNY based on a 40x PE ratio for 2026 adjusted net profit. The corresponding target price for the Hong Kong market is 39.34 HKD based on a 30x PE ratio [2][9].

本资料难以设置访问权限，若给您造成不便，敬请谅解。感谢您的理解与配合。 摘要 全流程、一体化、国际化、多疗法的全球药物研发领军企业。 康龙化成于2004 年在北京设立，二十 余年的时间已成长为一家国际领先的生命科学研发服务企业。站在当前时点来看，我们认为公司实验 室服务、小分子CDMO、临床CRO、大分子和细胞基因治疗服务仍具备充足的成长动力和广阔的成长 空间，向全球一体化研发生产服务巨头迈进。 实验室服务：一体化服务优势显著，长周期快速增长可期。 实验室服务业务是公司最具全球竞争力的 业务单元，也是公司目前最主要的收入及利润来源。展望未来，我们认为：1）公司在化合物设计和 合成领域积累的竞争优势有望不断强化，公司实验室化学业务仍有望在长周期中保持较快的增长趋 势。2）公司的生物科学服务仍将在较长周期中共享实验室化学业务的客户资源，依托优势业务的导 流，并持续拓展新分子类型业务，实现客户数量和业绩体量的持续高增长。 CMC（小分子CDMO）服务：商业化订单进入兑现周期，发展潜力及利润弹性均值得高度期待。 短 中期来看，公司快速增长的客户群体及实验室业务的导流仍将为公司CMC业务提供充裕的订单来源， 保障CMC ...

Core Viewpoint - The investigation report reveals a fatal accident at Kanglong Chemical (300759), resulting in the death of two employees during an operation related to the innovative drug project DT-818, which is in the IND approval stage [1] Group 1: Accident Details - The accident occurred on June 3, leading to the death of two employees due to asphyxiation caused by nitrogen gas entering an isolation chamber, reducing oxygen levels below the suffocation threshold [1] - The investigation identified that the employees did not follow safety protocols while operating the flexible isolator, which contributed to the incident [1] Group 2: Company Leadership and Compensation - The main responsible person, Lou Xiaoqiang, holds dual roles as President and COO, with a pre-tax salary of 1.9133 million yuan in 2024 [2] - Other key executives include Boliang Lou, the Chairman and CEO, with a pre-tax compensation of 2.213 million yuan, and Zheng Bei, the Executive Vice President, earning 160,000 yuan [3] Group 3: Financial Performance - In the first half of 2025, Kanglong Chemical reported a revenue of 6.44 billion yuan, a year-on-year increase of 14.9%, while the net profit attributable to shareholders decreased by 37% to 701 million yuan [4] - The decline in net profit is attributed to the impact of non-recurring gains from the previous year, which included a significant gain from the disposal of PROTEOLOGIX, INC. shares [4] Group 4: Share Pledge and Market Performance - On August 1, Zheng Bei pledged 7.35 million shares, representing 46.67% of his holdings, while also releasing 7.61 million shares from pledge [5] - As of September 19, Kanglong Chemical's stock price was 35.01 yuan per share, with a market capitalization of 62.255 billion yuan, reflecting a nearly 40% increase year-to-date [6]

Financial Performance - In the first half of 2025, the company achieved revenue of 6.441 billion yuan, a year-on-year increase of 14.9% [2] - The net profit attributable to shareholders was 701 million yuan, a decrease of 37.0% compared to the previous year, primarily due to significant investment gains from equity disposals in the same period last year [2] - Adjusted net profit under IFRS was 756 million yuan, reflecting a year-on-year growth of 9.5% [2] Client and Order Growth - New orders signed in the first half of the year increased by over 10% year-on-year, continuing a trend of rapid growth [2] - Revenue from the top 20 global pharmaceutical clients grew by 48% year-on-year, driven by strong performance in CMC services and laboratory services [3] Cash Flow and Financial Outlook - The company reported a net cash flow from operating activities of 1.408 billion yuan and expects to achieve positive free cash flow for the second consecutive year in 2025 [3] - The company added over 2,600 new clients, with active clients exceeding 480 [3] Business Segment Performance - Laboratory services generated revenue of 3.89 billion yuan, up 15.5% year-on-year, with a gross margin of 45.2% [4] - CMC services reported revenue of 1.39 billion yuan, a growth of 18.2%, with a gross margin of 30.5% [4] - Clinical research services achieved revenue of 940 million yuan, reflecting an 11.4% increase [4] - Revenue from large molecule and cell & gene therapy services was 0.1 billion yuan, showing a growth of 2.1% [4] Strategic Developments - The company has established 21 R&D centers and production bases globally, providing integrated R&D and production services for various therapies [3] - Continuous investment in AI and collaboration with Zhejiang University to enhance service efficiency and innovation in life sciences [4] Industry Outlook - The company perceives a resilient demand from overseas clients, with domestic demand expected to gradually recover [5]

Core Viewpoint - The report highlights the financial performance and operational developments of Pharmaron Beijing Co., Ltd. for the first half of 2025, showcasing growth in revenue and net profit while emphasizing the company's commitment to integrated drug research and development services across multiple therapeutic areas [1][4][21]. Financial Performance - The company reported a revenue of approximately 6.44 billion yuan, representing a 14.93% increase compared to the same period last year [3]. - The net profit attributable to shareholders, excluding non-recurring gains and losses, was approximately 636.66 million yuan, a 36.66% increase year-on-year [3]. - The basic earnings per share decreased by 36.58% to 0.3984 yuan, reflecting the impact of previous year's investment gains [3]. Business Operations - Pharmaron operates a comprehensive drug R&D service platform with 21 R&D centers and production bases globally, focusing on accelerating drug innovation [4]. - The company has strengthened its service capabilities in small molecule drugs, large molecule drugs, and cell and gene therapies, aiming to become a leading global player in multi-therapy drug development services [4][24]. - The laboratory services segment achieved revenue of approximately 389.25 million yuan, a 15.46% increase year-on-year, with a gross margin of 45.20% [7]. Client Engagement - The company served over 2,600 global clients, with 98.01% of revenue coming from existing clients [6]. - Revenue from the top 20 pharmaceutical clients increased by 47.98% year-on-year, accounting for 18.13% of total revenue [6]. - North American clients contributed 63.23% of total revenue, with a year-on-year growth of 11.02% [6]. Strategic Initiatives - The company is enhancing its digital and intelligent service capabilities, integrating AI technologies into various business areas to improve efficiency [17]. - A strategic partnership was established with Zhejiang University to create an AI Life Sciences Joint R&D Center, focusing on innovation in life sciences [6]. - Pharmaron is committed to sustainability, achieving 100% renewable electricity usage in some facilities and actively pursuing various international quality management certifications [6]. Industry Outlook - The global and Chinese pharmaceutical R&D and production markets are expected to maintain strong growth due to increasing healthcare investments and an aging population [21]. - The drug R&D outsourcing market is projected to grow rapidly, with integrated service platforms gaining market share as they help clients reduce costs and improve efficiency [22]. - The company is well-positioned to capitalize on these trends, leveraging its comprehensive service offerings to meet diverse client needs in drug development [24].

Core Viewpoint - The article discusses the recent performance and challenges faced by Kanglong Chemical (康龙化成), highlighting a recent incident among employees and the company's financial forecasts for 2025, indicating a mixed outlook with revenue growth but declining net profits [3][6]. Financial Performance - Kanglong Chemical expects total revenue for the first half of 2025 to be between 6.3 billion to 6.5 billion, representing a year-on-year growth of 13% to 16%. However, net profit is projected to decline by 36% to 39%, primarily due to a significant one-time gain from equity disposal in the previous year [6]. - The company reported a total revenue of 12.28 billion in 2024, with a growth rate of 6.39% compared to 2023. The revenue breakdown shows that laboratory services accounted for 57.40% of total revenue, while CMC services contributed 24.35% [8][12]. Industry Context - Kanglong Chemical is a prominent Contract Research Organization (CRO) in China, assisting clients in accelerating drug innovation through various services, including laboratory services and clinical research [7]. - The CRO sector was previously highly sought after in the capital market, with Kanglong Chemical's stock price increasing over 26 times within three years post-IPO, reaching a market capitalization close to 200 billion [9]. - The company has faced challenges since the US-China trade tensions, leading to a significant slowdown in growth, with 2024 revenue growth dropping to single digits [12]. Operational Strategy - To mitigate market challenges, Kanglong Chemical has established 21 R&D centers and production bases across China, the UK, and the US, with North America being the primary revenue source, contributing over 60% [17]. - The company reported a 16% year-on-year revenue growth in Q1 2025, indicating a positive trend despite previous high growth rates [22]. Shareholder Activity - Since its IPO, major shareholders, including the controlling shareholder and executives, have continuously reduced their holdings, with total cashing out amounting to 21.45 billion in the A-share market [25][26].

Investment Rating - The investment rating for the company is "Outperform" (maintained) [2] Core Insights - The company reported a strong recovery in Q1 2025, with revenue and profit both achieving double-digit growth. Q1 revenue reached 3.099 billion, a year-on-year increase of 16.03%, while net profit attributable to shareholders was 306 million, up 32.54% year-on-year [4][6] - All major business segments experienced growth, with laboratory services revenue at 1.857 billion (up 15.74% year-on-year) and a gross margin increase to 45.54%. CMC (small molecule CDMO) services revenue was 693 million (up 19.05% year-on-year) with a significant gross margin improvement to 30.44% [7] - The company is seeing strong growth from European clients, with revenue from North America and Europe increasing by 16.81% and 26.57% year-on-year, respectively. Revenue from global top 20 pharmaceutical companies grew by 29.05% year-on-year [7] - New orders are accelerating, with Q1 2025 new orders up over 10% year-on-year, and the company maintains its full-year guidance of 10%-15% revenue growth for 2025 [7] Financial Data and Profit Forecast - The company forecasts total revenue of 13.795 billion for 2025, with a year-on-year growth rate of 12.4%. The net profit attributable to shareholders is projected to be 1.819 billion, reflecting a growth rate of 1.4% [6][9] - The earnings per share (EPS) is expected to be 1.02 for 2025, with a gross margin forecasted to improve to 35.8% [6] - The return on equity (ROE) is projected to be 12.1% for 2025, with corresponding price-to-earnings (PE) ratios of 23, 20, and 17 for the years 2025, 2026, and 2027, respectively [6][7]

Group 1: Financial Performance - In Q1 2025, the company achieved revenue of 3.099 billion CNY, a year-on-year increase of 16% [2] - The net profit attributable to shareholders was 306 million CNY, reflecting a growth of 32.5% year-on-year [2] - Adjusted net profit was 349 million CNY, with a year-on-year growth rate of 3.1%, which is slower than revenue growth [2] Group 2: Business Segment Performance - Laboratory services generated revenue of 1.857 billion CNY, up 15.7% year-on-year, with a gross margin of 45.5%, an increase of 1.4 percentage points [4] - CMC (small molecule CDMO) services reported revenue of 693 million CNY, a growth of 19.1%, with a gross margin of 30.4%, up 2.5 percentage points [4] - Clinical research services achieved revenue of 447 million CNY, marking a 14.2% increase [4] - Revenue from large molecule and cell & gene therapy services was 99 million CNY, reflecting a growth of 7.9% [4] Group 3: Operational Insights - The strong operating cash flow reached 853 million CNY, a year-on-year increase [2] - The company’s workforce increased compared to the same period in 2024 due to new hires [2] - The second phase of the small molecule CDMO in Shaoxing is under construction, with two workshops expected to be operational by the end of 2025 [6] Group 4: Market Dynamics - Over 90% of the small molecule CDMO business comes from overseas clients, indicating a strong international market presence [7] - The company’s laboratory chemical services are expanding in scope, driven by industry recovery and new technology developments [5]