Core Viewpoint - 招银国际 maintains a target price of HKD 9.4 for China Biologic Products (01177) and a "Buy" rating based on a DCF model, projecting revenue growth rates of 19.1% in 2025, 4.4% in 2026, and 10.6% in 2027 [1] Revenue and Profit Projections - The firm expects adjusted net profit growth rates of 81.3% in 2025 and 11.3% in 2027, with a significant decline of 30% anticipated in 2026 [1] - Potential contributions from external licensing to revenue and profit have not been considered in these projections [1] Clinical Development Insights - Recent Phase II clinical results for the PDE3/4 inhibitor TQC3721 indicate that it can rapidly improve lung function and symptoms in patients [1] - The firm believes TQC3721 has the potential to become a blockbuster drug and has significant external licensing potential [1]

Core Viewpoint - 招银国际 maintains a target price of HKD 9.4 for China Biologic Products (01177) and a "Buy" rating based on a DCF model, projecting revenue growth rates of 19.1% in 2025, 4.4% in 2026, and 10.6% in 2027 [1] Revenue and Profit Projections - The firm expects adjusted net profit growth rates of 81.3% in 2025 and 11.3% in 2027, with a significant decline of 30% anticipated in 2026 [1] - Potential contributions from external licensing to revenue and profit have not been considered in these projections [1] Clinical Development Insights - China Biologic Products recently announced Phase II clinical results for its PDE3/4 inhibitor TQC3721, which demonstrated rapid improvement in patients' lung function and symptoms [1] - The firm believes TQC3721 has the potential to become a blockbuster drug and has significant external licensing potential [1]

Core Insights - The mid-year report of China Biopharmaceutical reveals a structural turning point, with total revenue reaching 17.57 billion RMB, a year-on-year increase of 10.7%, while adjusted net profit surged by 101.1% to 3.09 billion RMB, indicating a significant shift in profitability driven by innovative product revenue [2][4]. Group 1: Financial Performance - The adjusted net profit growth of 101.1% significantly outpaces the revenue growth of 10.7%, highlighting the effectiveness of the company's strategic focus on innovation [2][4]. - Innovative product revenue accounted for 44.4% of total revenue in the first half of 2025, moving closer to the annual target of 50% [2][4]. Group 2: Innovation and Growth Strategy - Innovation has become the core engine driving the company's growth and profitability, with a notable increase in the revenue share of high-value, high-margin innovative products [3][4]. - The company has committed to a substantial increase in R&D investment, with R&D expenses reaching 18.1% of revenue, the highest in its history, and 78% of these expenses allocated to innovative product development [5]. Group 3: Market Position and Transformation - The market has responded positively to the company's transformation, as evidenced by strong cash flow, substantial cash reserves of 30.5 billion RMB, and a validated commercialization capability [6][19]. - The acquisition of Lixin Pharmaceutical is expected to enhance the company's innovative capabilities, providing access to leading antibody discovery and ADC technology platforms [8][10]. Group 4: Future Outlook - The company anticipates a "super innovation cycle" from 2025 to 2027, with nearly 20 innovative products expected to be approved, over half of which are projected to exceed peak sales of 2 billion RMB [15][18]. - By 2027, the company expects to have over 35 innovative products on the market, with innovative product revenue share surpassing 60% [18]. - The company plans to shift from a "follow" innovation strategy to a "first-in-class" and "best-in-class" approach, aiming to become a global pharmaceutical leader [18].

Core Viewpoint - The article highlights the significant potential for China National Pharmaceutical Group (China Biopharmaceutical) to expand its international revenue through out-licensing deals, with a major transaction expected to be announced soon [1] Group 1: Company Developments - China Biopharmaceutical has identified multiple assets with out-licensing potential and has received cooperation intentions from both leading multinational pharmaceutical companies and innovative drug firms [1] - The company aims to achieve at least one major out-licensing deal this year, which is expected to become a recurring source of revenue and profit starting in 2025 [1] - The company has a robust pipeline that includes various products such as PDE3/4, HER2 bispecific antibodies, and ADCs, which are positioned for potential out-licensing [1][3] Group 2: Market Context - The global pharmaceutical market has seen high commercial value for similar products, with recent transactions reaching unprecedented amounts, indicating strong demand for innovative drug technologies [2] - The ADC platform has become a focal point for multinational companies, with significant deals being reported, such as a $50 billion potential transaction involving EGFR-ADC products [2] - The domestic innovative drug sector has experienced a surge in out-licensing transactions, with 41 deals totaling $36.93 billion reported in the first quarter of 2025 alone, nearing the total for the entire year of 2023 [4] Group 3: Industry Trends - The number of active innovative drug pipelines in China has increased dramatically, positioning the country as a leader in global pharmaceutical innovation [4] - China Biopharmaceutical ranks second among Chinese pharmaceutical companies with 125 projects in development, surpassing several multinational corporations [4] - The ongoing trend of out-licensing reflects the growing recognition of China's drug innovation capabilities by multinational corporations, suggesting a sustained realization of value for domestic innovative drugs [4]