Guojin Securities issued a research report stating that Simcere Pharma (02096) exhibits strong growth certainty, driven by the simultaneous resonance of short-term pipeline product launches and long-term innovation iteration. The firm forecasts the company will achieve operating revenues of RMB 7.63 billion, RMB 9.10 billion, and RMB 11.04 billion in 2025, 2026, and 2027, representing year-on-year increases of +15.0%, +19.3%, and +21.4%, respectively. Net profit attributable to shareholders is projected to be RMB 1.15 billion, RMB 1.38 billion, and RMB 1.66 billion for the same periods, with year-on-year growth of +57.3%, +19.4%, and +20.5%, corresponding to EPS of RMB 0.44, RMB 0.53, and RMB 0.64 (already accounting for a 112 million share placement in September 2025). Based on a DCF valuation, the corresponding reasonable target price is HK$20.16. This is the first coverage initiation, granting a "Buy" rating. Guojin Securities' primary views are as follows.

The transition towards innovation has yielded significant results, with the revenue contribution from innovative drugs continuously rising to 77%. The company focuses on four core therapeutic areas: neurology, oncology, autoimmunity, and anti-infectives, with three decades of market experience. Driven by both internal R&D and business development (BD), the portfolio of commercialized innovative drugs has expanded to 10 products. The proportion of revenue from innovative drugs increased from 45% in 2020 to 77% in H1 2025, indicating continuous optimization of the revenue structure and significant achievements in the innovation transformation.

In the short term, the core pipeline is entering a period of intensive harvest, with accelerated reimbursement access driving performance realization; the blockbuster insomnia drug possesses consumer product attributes, indicating massive market potential. In the short term, the core pipeline is densely maturing, and inclusion in the National Reimbursement Drug List (NRDL) is accelerating volume growth: ① In oncology: Coplrelor and Enlituo were included in the NRDL at the end of 2024, and Enzeshu is expected to be included by the end of 2025, promising rapid sales expansion. ② In neurology: The blockbuster insomnia drug, Daridorexant, as a non-scheduled Class II controlled substance, features rapid onset, non-addictive properties, and faces scarce competition, giving it distinct consumer product characteristics. Additionally, Simcere's Xian Bi Xin sublingual tablet has been approved for neuroprotection in acute ischemic stroke and can be used sequentially with the injection to significantly extend the duration of therapy. Furthermore, the company is actively advancing clinical trials for Xian Bi Xin sublingual tablet in post-stroke cognitive impairment, potentially expanding its application scenarios. Multiple other products, such as Madoinuoshave and Ledekibai monoclonal antibody, are progressing orderly through clinical trials and are expected to synergize with existing channels to accelerate sales volume in the future. With core products intensively reaching harvest stages, both revenue and non-GAAP net profit growth rates are expected to achieve steady and progressive year-on-year increases.

Long-term prospects are supported by a differentiated internal R&D pipeline, with multiple products already successfully out-licensed through BD deals, continuously validating innovation capabilities; technology platforms and pipelines are expected to sustain out-licensing for global expansion. The novel NMTiADC technology platform holds potential to overcome ADC drug resistance, and the subsequent entry of related products into clinical stages is expected to rapidly validate the platform's strength. The internal R&D pipeline focuses on differentiated targets, with multiple candidates like SIM0709 (a TL1A/IL-23p19 bispecific antibody) and SIM0613 (an LRRC15-ADC) targeting promising pathways. In recent years, several of the company's early-stage R&D assets have been out-licensed, including to major multinational corporations (MNCs), consistently gaining recognition for its innovation capabilities. The company continues to invest heavily in early-stage research, with multiple products possessing potential for future BD deals and advancement into late-stage clinical development.

The stable growth product series continues to contribute steady cash flow. Xian Bi Xin injection maintains a strong position in the ischemic stroke market. Enweida and Endu have a deep presence in oncology, while Xiannuxin focuses on the anti-infective sector, all expected to achieve stable growth. Aidesin has established brand advantages in the rheumatology and immunology field. Although facing potential volume-based procurement risks, its mature sales channel is expected to provide support for the subsequent volume expansion of the autoimmune pipeline.