Investment Rating - The report assigns a "Buy" rating to the company, indicating an expected stock price increase of over 15% in the next six months [3]. Core Insights - The company is advancing its innovative pipeline, with a focus on expanding its cancer treatment portfolio. The recent approval of SYS6090 for clinical trials highlights its potential in treating advanced lung cancer [1][2]. - SYS6090 is a recombinant fully human anti-PD-1 antibody fused with IL-15, showing significant efficacy and safety in preclinical studies, outperforming other PD-1 monoclonal antibodies [1]. - The company has a rich pipeline with multiple drugs in critical clinical trial phases, including SYS6010 and DP303c, which have demonstrated promising results in their respective trials [2]. Financial Summary - The company’s revenue is projected to decline from 2,539 million in 2023 to 1,981 million in 2024, before recovering to 2,970 million by 2027, reflecting a compound annual growth rate (CAGR) of approximately 14.67% from 2025 to 2027 [4]. - The net profit attributable to the parent company is expected to recover significantly from 54 million in 2024 to 246 million in 2027, with an EPS increase from 0.04 to 0.18 during the same period [4]. - The company’s market valuation is projected to decrease from a PE ratio of 967 in 2025 to 212 in 2027, indicating an improving profitability outlook [4].

Investment Rating - The report provides a positive outlook for CSPC Pharmaceutical Group, indicating a clear roadmap for internationalization and significant revenue growth expected from completed business development transactions by 2026 [5][6]. Core Insights - CSPC is projected to convert its completed business development transactions into recurring revenue by 2026, supported by major research milestones and successful overseas development progress [6]. - The company has secured approximately $10.2 billion in upfront and milestone payments from significant partnerships with AstraZeneca and Madrigal, which are expected to enhance profitability from 2025 to 2027 [5][6]. - Key products such as KN026 and SYS6010 are anticipated to drive domestic business recovery and accelerate growth post-2027 [7]. Summary by Sections Business Development and Revenue - CSPC's completed business development transactions are expected to yield around $9 billion in free cash flow from milestone payments by 2030, with AstraZeneca's recent $1.2 billion non-refundable upfront payment being a significant contributor [6]. - The company has established eight innovative R&D platforms, transitioning from a raw material producer to a complex generics and innovative drug enterprise, achieving a compound annual growth rate of 3.1% in profitability from 2019 to 2023 [10]. Market Position and Financials - As of February 2, 2026, CSPC's stock price was HKD 9.15, with a market capitalization of $13.54 billion [13]. - The company ranks among the top ten in the Chinese pharmaceutical industry by drug revenue, with a significant portion of its income derived from the Asian market [11]. Catalysts for Growth - Key catalysts include the progress of overseas R&D projects, particularly the core product EGFR ADC, and the clinical development plans of major partners like AstraZeneca [8]. - The anticipated launch of innovative drugs and the entry of early-stage products into clinical phases are expected to validate the company's R&D capabilities [8].

The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Application Proof. Application Proof of CSPC Innovation Pharmaceutical Co., Ltd. 石藥創新製藥股份有限公司 (the "Company") (A joint stock company incorporated in the Pe ...

Core Viewpoint - Haitong International maintains an "outperform" rating for CSPC Pharmaceutical Group (01093) with a target price of HKD 11.34, noting a revenue decline in the first three quarters but signs of recovery in Q3, with a 10% quarter-on-quarter growth in prescription drug revenue and a 27% year-on-year increase in net profit attributable to shareholders [1][2]. Financial Performance - For the first nine months of 2025, CSPC achieved revenue of CNY 19.9 billion, a 12% year-on-year decline, with prescription drug revenue at CNY 15.5 billion (down 17%), API revenue at CNY 3 billion (up 10%), and functional foods and other businesses at CNY 1.4 billion (up 11%) [2]. - The gross margin was 65.6%, down 4.9 percentage points year-on-year; R&D expenses were CNY 4.2 billion (up 8%), with an R&D expense ratio of 21.0% (up 3.9 percentage points); the sales expense ratio was 24.1% (down 5.1 percentage points) [2]. - In Q3 2025, CSPC reported revenue of CNY 6.6 billion, a 3% year-on-year increase and a 6% quarter-on-quarter increase, with prescription drug revenue at CNY 5.2 billion (up 2% year-on-year, up 10% quarter-on-quarter) [2]. Prescription Drug Business - In Q3 2025, all segments of the prescription drug business showed improvement, confirming the bottom of the fundamentals, with total prescription drug revenue of CNY 4.7 billion and drug revenue of CNY 4.7 billion (up 8% quarter-on-quarter) [3]. - Specific revenue breakdown includes: - Neurological system: CNY 1.91 billion (down 4% year-on-year, up 4% quarter-on-quarter) - Oncology: CNY 590 million (down 47% year-on-year, up 19% quarter-on-quarter) - Anti-infection: CNY 830 million (down 9% year-on-year, up 12% quarter-on-quarter) - Cardiovascular: CNY 470 million (up 18% year-on-year, up 4% quarter-on-quarter) - Respiratory: CNY 320 million (up 73% year-on-year, up 28% quarter-on-quarter) - Metabolism: CNY 250 million (up 14% year-on-year, up 8% quarter-on-quarter) - Other therapeutic areas: CNY 360 million (up 26% year-on-year, down 4% quarter-on-quarter) [3]. - The company expects a 5% revenue growth in the second half of the year for the prescription drug segment (excluding authorized revenue) [3]. Asset Expansion and R&D Progress - The SYS6010 (EGFRADC) clinical trial is progressing well, with significant potential for external licensing; multiple technology platforms and products are also expected to expand internationally [4]. - Management plans to present clinical data for SYS6010 at major conferences next year and publish data in top academic journals [5]. - The small RNA platform has five assets entering clinical stages, focusing on liver-targeted and multi-target products, with plans for new products in weight loss and muscle gain to enter clinical trials next year [6]. - The PD-1/IL15 pipeline is a key focus, with over 90 patients enrolled in dose-exploration trials, showing promising safety and efficacy results [6].

Core Viewpoint - Haitong International maintains an "outperform" rating for CSPC Pharmaceutical Group (01093) with a target price of HKD 11.34, noting a revenue decline in the first three quarters but signs of recovery in Q3, with a 10% quarter-on-quarter growth in traditional medicine revenue and a 27% year-on-year increase in net profit attributable to shareholders [1]. Financial Performance - For the first nine months of 2025, CSPC achieved revenue of CNY 19.9 billion, a 12% year-on-year decline, with traditional medicine revenue at CNY 15.5 billion (down 17%), API revenue at CNY 3 billion (up 10%), and functional foods and other businesses at CNY 1.4 billion (up 11%) [1]. - The gross margin was 65.6%, down 4.9 percentage points year-on-year; R&D expenses were CNY 4.2 billion (up 8%), with an R&D expense ratio of 21.0% (up 3.9 percentage points); the sales expense ratio was 24.1% (down 5.1 percentage points) [1]. - The net profit attributable to shareholders for the first three quarters was CNY 3.5 billion, a 7% year-on-year decline [1]. Q3 Performance - In Q3 2025, CSPC reported revenue of CNY 6.6 billion, a 3% year-on-year increase and a 6% quarter-on-quarter increase, with traditional medicine revenue at CNY 5.2 billion (up 2% year-on-year, up 10% quarter-on-quarter) [2]. - The gross margin was 65.6%, down 2.1 percentage points year-on-year; R&D expenses were CNY 1.5 billion (up 12.3%), with an R&D expense ratio of 22.7% (up 1.8 percentage points); the sales expense ratio was 26.4% (down 2.4 percentage points) [2]. - The net profit attributable to shareholders for Q3 was CNY 960 million, a 27% year-on-year increase but a 10% quarter-on-quarter decline [2]. Traditional Medicine Business - In Q3, all segments of the traditional medicine business showed improvement, indicating a bottoming out of fundamentals, with traditional medicine revenue of CNY 4.7 billion and drug revenue of CNY 4.7 billion (up 8% quarter-on-quarter) [3]. - Specific revenue breakdown includes: - Neurological system: CNY 1.91 billion (down 4% year-on-year, up 4% quarter-on-quarter) - Oncology: CNY 590 million (down 47% year-on-year, up 19% quarter-on-quarter) - Anti-infection: CNY 830 million (down 9% year-on-year, up 12% quarter-on-quarter) - Cardiovascular: CNY 470 million (up 18% year-on-year, up 4% quarter-on-quarter) - Respiratory: CNY 320 million (up 73% year-on-year, up 28% quarter-on-quarter) - Metabolism: CNY 250 million (up 14% year-on-year, up 8% quarter-on-quarter) - Other therapeutic areas: CNY 360 million (up 26% year-on-year, down 4% quarter-on-quarter) [3]. - The company expects a 5% revenue growth in the traditional medicine segment (excluding authorized revenue) in the second half of the year compared to the first half [3]. Asset Expansion and R&D Progress - The SYS6010 (EGFRADC) clinical trial is progressing well, with significant potential for external licensing; multiple technology platforms and products are expected to expand internationally [4]. - Management plans to present clinical data for SYS6010 at major academic conferences next year and publish lung cancer clinical data in top journals [5]. - The small RNA platform has five assets entering clinical stages, focusing on liver-targeted and multi-target products, with plans for new products in weight loss and muscle gain to enter clinical trials next year [6]. - The PD-1/IL15 pipeline is a key focus, with over 90 patients enrolled in dose-exploration trials, showing promising safety and efficacy results [6].

Financial Performance - Revenue for 1-9/2025 was RMB 19,891 million, a decrease of 12.3% compared to RMB 22,686 million in 1-9/2024[27] - Gross profit for 1-9/2025 was RMB 13,049 million, down 18.4% from RMB 15,985 million in 1-9/2024[27] - Gross profit margin decreased by 4.9 percentage points, from 70.5% in 1-9/2024 to 65.6% in 1-9/2025[27] - R&D expenses increased by 7.9%, from RMB 3,880 million in 1-9/2024 to RMB 4,185 million in 1-9/2025[27] - Reported profit attributable to shareholders decreased by 7.1%, from RMB 3,778 million in 1-9/2024 to RMB 3,511 million in 1-9/2025[27] - Underlying profit attributable to shareholders decreased by 23.0%, from RMB 3,999 million in 1-9/2024 to RMB 3,079 million in 1-9/2025[27] - Finished drugs revenue decreased by 17.2%, from RMB 18,670 million to RMB 15,450 million[28] - Revenue from oncology decreased significantly by 56.8%, from RMB 3,809 million to RMB 1,645 million[29] - Revenue from nervous system decreased by 21.6%, from RMB 7,234 million to RMB 5,669 million[29] - License fee revenue was RMB 1,540 million in 1-9/2025, compared to no revenue in 1-9/2024[29] R&D and Regulatory Updates - 3 new drugs were approved[5] - 5 breakthrough therapy designations were received[5] - 12 new pivotal clinical trials were initiated[7] - 52 IND approvals were obtained, including 42 in China and 10 in North America[7] BD and Shareholder Returns - License-out agreements were made for SYS6005, Irinotecan Liposome Injection, SYH2086 and strategic collaboration with AstraZeneca[9, 115] - A total of HK$300 million worth of shares have been repurchased this year[8] - The 2025 interim dividend is HK14 cents per share[8] R&D Pipeline Highlights - Anbenitamab injection co docetaxel treatment of 1L HER2+ relapse/metastasis breast cancer was published in Cancer Communications, with ORR of 76.4% and mPFS of 27.7m[37] - SYS6091 for injection has been granted as BTD by NMPA for the treatment of platinum resistant recurrent epithelial ovarian cancer, primary peritoneal cancer, or whole population of patients with fallopian tube cancer and HER2-positive advanced colorectal cancer[45] - JMT101+ Irinotecan has been granted as BTD by NMPA for the treatment of RAS, RAF, EGFR ECD and PIK3CA exon 20 wild-type advanced colorectal cancer after failure of standard treatment in second-line or beyond[51] - The company has approximately 200 innovative drugs and new formulations[4, 96]

Core Viewpoint - The company XinNuoWei announced the progress of its SYS6010 product development, highlighting advancements in clinical research and ongoing studies in various cancer types [2] Group 1: Clinical Research Progress - The Phase 3 clinical study for EGFR mutation TKI-resistant non-small cell lung cancer officially started in March this year in China and is currently enrolling participants [2] - Overseas research progress is advancing smoothly [2] - The company is exploring multiple combination therapy studies covering esophageal squamous cell carcinoma, small cell lung cancer, and both EGFR mutation and wild-type non-small cell lung cancer in first-line patients [2] Group 2: Future Data Release Plans - There are no data release plans for the second half of this year, with expectations for data updates next year [2]

Core Viewpoint - The company is actively involved in the development of SYS6010 and has made significant progress in clinical trials, while also addressing the decline in revenue from its functional raw materials business due to fluctuating caffeine prices [1] Group 1: Product Development - The company currently does not have any GLP-1 related products [1] - The clinical study for SYS6010 targeting EGFR mutation TKI-resistant non-small cell lung cancer has officially started in March this year and is currently enrolling participants [1] - The company is exploring multiple combination therapy studies covering esophageal squamous cell carcinoma, small cell lung cancer, and both EGFR mutant and wild-type non-small cell lung cancer frontline patients [1] - There are no data release plans for H2 this year, with updates expected next year [1] Group 2: Commercialization and Clinical Trials - The company's Enlansumab has been included in the medical insurance, and commercialization is proceeding normally [1] - Key clinical trials for first-line recurrent or metastatic cervical cancer are currently underway [1] - A II/III phase clinical trial for small cell lung cancer post-chemotherapy consolidation treatment is set to begin in June 2025 in China, with the first subject already enrolled [1] - The company is also exploring trials related to the combination of PD-1 and SYS6010 (EGFR-ADC) products [1] Group 3: Revenue and Market Conditions - Revenue from the functional raw materials business has declined primarily due to the drop in caffeine prices compared to the highs of 2022 and 2023 [1] - Currently, caffeine prices have stabilized, and this business segment continues to maintain a high level of profitability [1]

Core Viewpoint - The stock price of CSPC Pharmaceutical Group (01093) fell over 7% towards the end of trading, reflecting market concerns following the release of disappointing interim results, with a significant decline in revenue and profit [1] Financial Performance - CSPC Pharmaceutical reported total revenue of 13.273 billion RMB for the first half of the year, a year-on-year decrease of 18.5% [1] - The profit attributable to the company's owners was 2.548 billion RMB, down 15.64% year-on-year [1] Market Reaction - The stock price dropped by 6.45% to 9.7 HKD, with a trading volume of 2.213 billion HKD [1] - The market has reacted negatively to the company's second-quarter performance, which fell short of expectations, particularly in the oncology and neurology business lines [1] Analyst Insights - According to a report from CMB International, the company's revenue and net profit in Q2 were below expectations, indicating structural declines in key business areas [1] - The firm downgraded its sales and net profit forecasts for 2025 to 2026 due to weak core business performance and overly optimistic business development expectations [1] - The rating was adjusted to "Neutral," with the target price reduced from 12.9 HKD to 9.3 HKD [1] Future Outlook - The future prospects of CSPC Pharmaceutical are seen as dependent on its commercial collaboration strategy and the commercialization of its pipeline [1] - Market attention is focused on its key asset, SYS6010, but past performance in the development of Class 1 innovative drugs suggests that the company is lagging behind other large pharmaceutical and biotech firms in China [1]

Core Viewpoint - The stock price of CSPC Pharmaceutical Group (01093) fell over 7% towards the end of trading, reflecting market concerns following the release of disappointing interim results for the first half of the year [1] Financial Performance - Total revenue for the first half of the year was 13.273 billion RMB, a year-on-year decrease of 18.5% [1] - Profit attributable to shareholders was 2.548 billion RMB, down 15.64% year-on-year [1] Market Reaction - The stock price dropped by 6.45% to 9.7 HKD, with a trading volume of 2.213 billion HKD [1] - The decline in stock price indicates that the market has reacted negatively to the company's financial performance and outlook [1] Analyst Insights - According to a report from CMB International, the second quarter revenue and net profit of CSPC Pharmaceutical did not meet expectations, indicating structural declines in the oncology and neurology business lines [1] - The management reiterated that the EGFR ADC product could be a potential catalyst for business development, but the market has already priced in these expectations [1] - CMB International has lowered its sales and net profit forecasts for 2025 to 2026 due to weak core business performance and overly optimistic business development expectations [1] Future Outlook - The future prospects of CSPC Pharmaceutical depend on its commercial cooperation strategy and the commercialization of its pipeline [1] - Market attention is focused on its key asset SYS6010, but the company has lagged behind other large pharmaceutical and biotech companies in clinical progress for Class 1 innovative drugs [1]