Guojin Securities released a research report stating that SIMCERE PHARMA (02096) demonstrates strong growth potential, driven by short-term pipeline expansion and long-term innovation. The firm forecasts revenues of RMB7.63 billion, RMB9.10 billion, and RMB11.04 billion for 2025, 2026, and 2027, respectively, representing year-on-year growth of 15.0%, 19.3%, and 21.4%. Net profit attributable to shareholders is projected at RMB1.15 billion, RMB1.38 billion, and RMB1.66 billion, with YoY increases of 57.3%, 19.4%, and 20.5%. EPS is estimated at RMB0.44, RMB0.53, and RMB0.64 (accounting for a 112 million share placement in September 2025). Based on DCF valuation, the target price is set at HK$20.16, with a "Buy" rating initiated.

Key highlights from Guojin Securities include: 1. **Successful Transition to Innovation**: The company has shifted from a generics leader to an innovative drug developer, with revenue from innovative drugs rising from 45% in 2020 to 77% in H1 2025. It focuses on neurology, oncology, autoimmune diseases, and anti-infectives, supported by in-house R&D and business development (BD).

2. **Short-Term Growth Drivers**: - **Oncology**: Products like Cosela, Enlituo, and Enzesu are expected to enter China’s national reimbursement drug list (NRDL) by 2024–2025, leveraging differentiated mechanisms and clinical guidelines. - **Neurology**: The insomnia drug Daliresan, with fast action and low addiction risk, has peak sales potential exceeding RMB4 billion. Sublingual and injectable versions of Xianbixin may expand into post-stroke cognitive impairment. - Six additional products, including Maduoxinuowei and Ledebilizumab, are nearing approval, accelerating revenue growth.

3. **Long-Term Innovation & BD Potential**: - The NMTiADC platform aims to address ADC drug resistance, with clinical validation underway. - Early-stage pipelines, such as SIM0278 (TL1A/IL-23p19 bispecific antibody) and SIM0613 (LRRC15-ADC), target novel mechanisms. Past BD deals with multinational corporations validate innovation capabilities.

4. **Stable Cash Flow from Core Products**: - Xianbixin injection holds a 29% market share in stroke treatment. - Endu and Envida show steady growth in oncology, while Aidexin maintains brand strength in rheumatology despite potential volume-based procurement risks.

**Risks**: Underperformance in sales, R&D delays or failures, and policy risks like centralized procurement.