Huaan Securities has maintained its "Buy" rating on LUYE PHARMA (02186), expressing confidence in the company's global sales platform capabilities and CNS (Central Nervous System) field FIC/BIC pipeline.

Without considering the potential impact of BD transactions on revenue, the firm projects LUYE PHARMA's operating revenue for 2025-2027 to reach 63.16 billion yuan, 74.73 billion yuan, and 90.76 billion yuan respectively, representing year-over-year growth of 4%, 18%, and 21%. The projected net profit attributable to shareholders for 2025-2027 is expected to be 6.06 billion yuan, 7.77 billion yuan, and 9.90 billion yuan respectively, with year-over-year growth of 29%, 28%, and 27%, corresponding to valuations of 22X, 17X, and 14X.

According to the company's 2025 half-year report, LUYE PHARMA achieved operating revenue of 31.81 billion yuan during the reporting period, up 3.46% year-over-year. Net profit attributable to shareholders reached 3.13 billion yuan, down 19.33% year-over-year. The decline in net profit was attributed to a high comparison base in the same period last year, with steady growth expected to continue for the full year.

In the first half of the year, the company's overall gross margin was 67.83%, up 0.23 percentage points year-over-year. The period expense ratio was 66.12%, down 0.75 percentage points year-over-year. Specifically, the R&D expense ratio was 6.08%, down 3.06 percentage points year-over-year; the sales expense ratio was 32.03%, up 4.36 percentage points year-over-year; the administrative expense ratio was 9.92%, up 0.51 percentage points year-over-year; and the financial expense ratio was 10.64%, up 1.6 percentage points year-over-year.

The reasonable fluctuation in expenses reflects ERZOFRI's U.S. market launch and Ruoxinlin's inclusion in the National Medical Insurance Directory. The company's sales expenses increased moderately, which is beneficial for the rapid volume expansion of new products, with new products continuously increasing their share of total sales.