2025-12-29 15:51Summary of the Conference Call for Zhaoyan New Drug Industry Overview - The conference call focuses on the safety evaluation (安评) industry, particularly the supply and demand dynamics of experimental monkeys, which are crucial for drug development and testing [2][5]. Key Points and Arguments 1. Strategic Advantage in Monkey Supply: Zhaoyan possesses its own monkey breeding facilities, which provides a strategic advantage in a market where the supply of experimental monkeys, especially F2 generation monkeys, is limited due to long breeding cycles [2][4]. 2. Profit Growth and Valuation Potential: The company has achieved growth in net profit attributable to shareholders through the appreciation of biological assets and increased service fees, indicating significant potential for valuation enhancement as it transitions from preclinical to clinical stages [2][4]. 3. Industry Leadership: With 30 years of experience in the safety evaluation industry, Zhaoyan is one of the leading companies in China, holding GLP qualifications from multiple regulatory bodies including NMPA, FDA, and OECD, which allows it to meet global IND approval requirements [2][4]. 4. High Barriers to Entry: The safety evaluation industry has high entry barriers due to the substantial costs and long timelines associated with GLP laboratory construction, resulting in a high outsourcing rate. Zhaoyan's qualifications and experience position it favorably in the competitive landscape [2][5]. 5. Offshore Outsourcing Growth: The company has leveraged domestic monkey resources and labor to secure high-value offshore orders, achieving a 60% year-on-year growth in offshore outsourcing orders, which is expected to further expand its market share [2][5]. 6. Supply and Demand Imbalance: The industry currently faces a mismatch between supply and demand, with a decline in the supply of experimental monkeys due to price differences between China and the U.S., as well as a decrease in birth rates caused by aging populations [6]. 7. Rising Prices and Service Fees: The supply-demand imbalance has led to an increase in the price of experimental monkeys, currently exceeding 100,000 yuan per monkey, alongside rising service fees, contributing to an upward trend in the industry's overall prosperity [6]. Future Development Trends 1. Increased Investment in Innovative Drug Development: There is a growing investment in innovative drug development driven by factors such as active IPOs in Hong Kong and increased fundraising activities, which is expected to significantly boost demand for safety evaluation services [3][7]. 2. Continued Tightness in Monkey Resources: The ongoing tightness in experimental monkey resources is anticipated to persist due to long breeding cycles and low output rates, enhancing Zhaoyan's bargaining power and ability to command premium service fees [3][7]. 3. Expansion of Offshore Outsourcing Market: As global resources for experimental monkeys become scarcer, Zhaoyan is well-positioned to further penetrate the offshore outsourcing market, potentially securing higher-margin orders and driving business growth [3][7].