NKF(SH:603707)2025-05-08 15:31Summary of Conference Call for Jianyou Co., Ltd. Industry Overview - Heparin API Market: The non-compliant market is expected to recover by 5%-10% in 2025, with the compliant market price around 40,000 yuan. The global reduction in heparin formulation usage and inventory impacts sales, but impairment reversal measures may mitigate gross profit losses in the API segment [2][3][18]. Core Insights and Arguments - European Market Strategy: The company is accelerating its European market expansion, aiming to complete 40 product approvals within two years. It anticipates generating annual revenue of $150 million to $200 million by 2027-2028, utilizing a self-built sales team and local partnerships [2][5]. - Gross Margin by Product Type: Heparin formulations have a low gross margin of about 30%, while non-heparin small molecule drugs have a gross margin of approximately 50%. Large molecule biopharmaceuticals can achieve gross margins of 80%-90%, indicating significant differences across product types [2][6]. - Sales Targets for Large Molecule Drugs: The company has set sales targets for its large molecule segment at $100 million, $300 million, and $500 million for 2025, 2026, and 2027, respectively. Sales of adalimumab and liraglutide are expected to exceed $120 million in 2025, with the overall large molecule segment potentially reaching $200 million [2][7]. - Product Selection Strategy: The company prioritizes products for hospital management and chain pharmacies, focusing on biopharmaceuticals, particularly non-oncological, autoimmune, or monoclonal antibody products, while actively promoting innovative clinical research [2][9]. - Upcoming Product Launches: Three insulin products are expected to gradually launch in the second half of 2026, with at least one to two self-developed biosimilar products launched annually starting in 2026 [2][10]. Additional Important Insights - Impact of Tariffs: The 20% tariff on Chinese pharmaceutical products will affect gross margins, potentially reducing net profit by approximately $10 million in 2025. The company is negotiating with Sanofi to share tariff burdens [2][13]. - Currency Fluctuations: The company faces significant financial exposure due to currency fluctuations in 2025, with plans for observation and hedging operations, particularly with the euro [2][14]. - Production Line Plans: From 2025 to 2027, the company plans to build two to three production lines annually, with construction costs not exceeding $20 million per year [2][16]. - Liraglutide Orders and Pricing: Since its launch in April, liraglutide has received approximately 750,000 orders, with a net price of about $60 per unit and terminal prices ranging from $80 to $100 [2][17]. - 2025 Performance Guidance: The company expects 2025 revenue to be around $1 billion to $1.1 billion, with a net gross profit increase of approximately $32.5 million, despite a reduction in gross profit from the API segment [2][23].