Benefiting from intensive policy dividend releases, accelerated overseas expansion trends of innovative drugs, and sustained capital investment, the innovative pharmaceutical sector has emerged as one of the strongest performers in Hong Kong and A-share markets this year. Multiple innovative drug companies have seen significant stock price surges, exemplified by INNOGEN-B (02591), which closed up 206.48% on its listing debut. Given the outstanding performance of the innovative drug sector, market funds have begun accelerating their search for undervalued innovative pharmaceutical companies to capture excess return opportunities. As a leading domestic company in the metabolic disease field, SUNSHINE PHARMA (06887) has attracted investor attention with its comprehensive GLP-1 innovative drug and analog pipeline demonstrating tremendous potential.

SUNSHINE PHARMA successfully listed on the Hong Kong Stock Exchange main board on August 7th through an "absorption merger + introduction method," marking the first "H-share absorption merger privatization + introduction listing" innovative capital operation in the Hong Kong market and pioneering a new paradigm for asset securitization of Chinese innovative pharmaceutical companies.

However, after SUNSHINE PHARMA opened at HK$57.5 on August 7th, its stock price dropped to a low of HK$52 on the fourth trading day, most likely due to minority shareholders of the absorbed Dongyang Guang Changjiang Pharmaceutical cashing in their gains. During SUNSHINE PHARMA's absorption of Dongyang Guang Changjiang Pharmaceutical, minority shareholders of Dongyang Guang Changjiang Pharmaceutical received newly issued H-shares of SUNSHINE PHARMA at a 1:0.263614 share exchange ratio. After the privatization premium and special dividend of HK$1.5 per share, these minority shareholders had already achieved significant premiums in the short term, making it normal for short-term oriented shareholders to realize gains.

Market observations show that when SUNSHINE PHARMA's stock price fell to HK$53 and minority shareholder selling pressure eased, funds immediately entered to purchase shares. This drove SUNSHINE PHARMA's stock price to rise continuously over the subsequent three trading days, reaching a high of HK$58.7 on August 15th, recovering the opening price from the listing debut. This indicates substantial market recognition of SUNSHINE PHARMA's intrinsic value. With deep understanding of SUNSHINE PHARMA's fundamentals, one can discover its growth potential toward a hundred-billion market capitalization, making the current period potentially an opportune time for long-term investors to position in SUNSHINE PHARMA.

As one of China's leading innovative pharmaceutical companies, SUNSHINE PHARMA's R&D capabilities rank in the industry's first tier. This is reflected not only in the company's strong R&D team but also in its rich technology systems and product pipeline that demonstrate SUNSHINE PHARMA's capabilities.

In terms of R&D team, SUNSHINE PHARMA currently employs over 1,100 R&D personnel, including scientists with extensive multinational pharmaceutical company experience and medical talents with rich R&D practical experience. These include Dr. Zhang Yingjun, Dr. Gu Baohua, Dr. Ye Qunrui, and Dr. Cai Xiaoli, among other senior professionals with industry insights and drug development experience.

Regarding technology systems and product pipeline, through over 20 years of continuous investment, SUNSHINE PHARMA has established a completely independent, systematic, and comprehensive R&D platform and technology system covering multiple advanced technology fields including small molecule targeted drugs, AIDD, small nucleic acids, ADC, PROTAC, and specific antibodies. The company applies AI technology to all stages of drug development, creating advanced AI-driven models that significantly enhance R&D efficiency and innovation capabilities.

Supported by advanced innovative technology platforms, SUNSHINE PHARMA focuses strategic deployment on three high-potential areas: infection, chronic diseases, and oncology. The company currently holds 150 approved drugs globally and has over 100 drugs in development, including 49 Class 1 innovative drugs. Among these, 3 original innovative drugs have received market approval, 1 is about to launch, and 10 are in Phase II and III clinical trials, fully demonstrating SUNSHINE PHARMA's rich product reserves, with many drugs possessing "billion-dollar molecule" commercialization potential.

For example, in the diabetes field, SUNSHINE PHARMA's insulin glargine is expected to receive U.S. approval soon, potentially becoming China's first insulin product to launch in the U.S. market with Phase III clinical trial exemption. In oncology, SUNSHINE PHARMA's crizotinib represents China's first highly selective inhibitor to enter Phase III clinical trials, already licensed to 3SBio for domestic market commercialization. With significant anti-tumor activity and good safety profile, this drug's global peak sales potential is estimated at $1 billion. In anti-fibrosis, SUNSHINE PHARMA's investigational drug pirfenidone represents a global breakthrough therapy showing excellent performance in idiopathic pulmonary fibrosis (IPF) treatment and expanding to interstitial pneumonia and liver fibrosis fields. Given the global IPF drug market exceeds $5 billion, successful indication expansion could drive peak sales beyond $1 billion.

Significant progress in BD activities also demonstrates industry recognition of SUNSHINE PHARMA's strong R&D capabilities. As early as November 2024, SUNSHINE PHARMA reached an overseas licensing agreement with UK pharmaceutical company Apollo for SUNSHINE PHARMA's self-developed HEC88473 project, with total transaction value approaching $1 billion. In the same month as this collaboration signing, SUNSHINE PHARMA signed a licensing agreement with 3SBio regarding crizotinib besylate. Additionally, SUNSHINE PHARMA's pirfenidone Phase II clinical data is scheduled to be presented at the U.S. IPF Summit on August 20th, indicating BD overseas expectations for this blockbuster drug this year. Clearly, while accelerating innovative R&D progress domestically, SUNSHINE PHARMA actively conducts international licensing cooperation and development, expanding global innovation pathways.

Notably, SUNSHINE PHARMA demonstrates strong capabilities not only in R&D and product pipeline but also operates as an integrated pharmaceutical company encompassing research, production, and sales, with deep deployment in manufacturing and sales.

From a manufacturing perspective, SUNSHINE PHARMA operates two major production bases in Songshan Lake and Yidu, covering over 1,300 acres total area and encompassing the entire pharmaceutical production chain, built entirely according to international standard systems. Related facilities have obtained GMP certifications from China, the United States, and multiple European locations, passing FDA inspections with "zero defects" multiple times.

From a sales perspective, SUNSHINE PHARMA has established a global sales network. In the domestic market, SUNSHINE PHARMA's sales and distribution network spans 32 provinces, municipalities, and autonomous regions and nearly 300 prefecture-level cities, covering over 2,500 tertiary hospitals, over 9,600 secondary hospitals, over 89,000 primary hospitals, numerous large national or regional pharmacy chains, and other medical institutions, maximizing national market coverage. In overseas markets, SUNSHINE PHARMA has been deeply cultivating U.S. and European markets for years, with overseas sales networks covering eight countries and regions including the United States, Germany, and the United Kingdom.

With its powerful global sales network, SUNSHINE PHARMA demonstrates strong commercialization capabilities. While maintaining its leading market share position in anti-infection drugs, the company has developed chronic disease treatment drugs into a new growth curve. From 2022 to 2024, SUNSHINE PHARMA's chronic disease treatment drug revenues were 517 million, 580 million, and 1.068 billion yuan respectively, with the proportion of total revenue nearly doubling from 13.6% in 2022 to 26.6% in 2024. SUNSHINE PHARMA's revenue growth has entered a new stage of dual-driven development by anti-infection drugs and chronic disease treatment drugs. With crizotinib entering Phase III clinical trials, oncology treatment drugs are also poised for action.

This demonstrates that after absorbing Dongyang Guang Changjiang Pharmaceutical, SUNSHINE PHARMA, driven by innovation-focused R&D growth, has thoroughly integrated the "R&D-production-sales" closed loop, forming a virtuous cycle of comprehensive ecosystem deployment. The unique competitive advantages thus formed facilitate accelerated new drug volume expansion and compressed transformation cycles, thereby accelerating the release of tremendous dividends generated by synergistic advantages.

It is foreseeable that as SUNSHINE PHARMA's rich product pipeline continues advancing and multiple new drugs with "billion-dollar molecule" commercialization potential successively launch in the future, its growth potential will be fully unleashed. The company is expected to stride toward the hundred-billion market capitalization target, making the current period potentially an opportune time for industrial capital and long-term investors to position in SUNSHINE PHARMA.