CISI FIN released a research report adjusting profit forecasts, expecting CMS (00867) to achieve net profit attributable to shareholders of RMB 1.661 billion, RMB 1.917 billion, and RMB 2.272 billion for 2025-2027, representing year-over-year growth of 2.54%, 15.39%, and 18.57% respectively. Based on the closing price on September 11, 2025, the corresponding P/E ratios are 20.06x, 17.39x, and 14.66x. The firm maintains a "Buy" rating.

**H1 2025 Performance Shows Steady Growth, Meeting Expectations**

For the first half of 2025, the company achieved operating revenue of RMB 4.002 billion, up 10.8% year-over-year. When calculated based on pharmaceutical sales revenue alone, total revenue reached RMB 4.670 billion, up 8.9% year-over-year. Net profit attributable to shareholders was RMB 941 million, up 3.4% year-over-year.

Based on pharmaceutical sales revenue calculations, the company's gross profit margin was 61.7%, with selling expenses ratio at 30.3% (down 2.1 percentage points year-over-year) and administrative expenses ratio at 9.2% (up 0.8 percentage points year-over-year). The company declared an interim dividend of RMB 0.1555 per share, totaling RMB 376 million, representing approximately 39.99% of the company's H1 2025 net profit attributable to shareholders.

**Exclusive and Innovative Products Become New Growth Drivers**

The significant negative impact of national procurement products on operating performance has passed. Sales of major exclusive, branded, and innovative products continue to grow, accounting for 62.1% of total revenue (calculated based on pharmaceutical sales revenue), up 6.0 percentage points year-over-year.

By product line, based on pharmaceutical sales revenue calculations: cardiovascular and cerebrovascular disease line generated RMB 2.216 billion, up 0.6% year-over-year; digestive/autoimmune disease line achieved RMB 1.411 billion, up 4.9% year-over-year; dermatology line (Dermai Pharma) reached RMB 498 million, up 104.3% year-over-year; ophthalmology line generated RMB 358 million, up 17.7% year-over-year; and other products contributed RMB 187 million.

**Innovation Results Continue to Materialize with Blockbuster Products Launching Soon**

Since 2025, the company's innovation layout has accelerated development. Five approved innovative drugs (Yilqu, Weifurui, Meitaitong, Weituke, Laifuolan) are accelerating commercial value realization. Three innovative drugs (Dexidusta tablets, ruxolitinib phosphate cream for vitiligo indication, ZUNVEYL) are under NDA review in China. IND applications for two self-developed products (CMS-D001 tablets, CMS-D003 capsules) have been approved. Two new collaborative innovative products (ZUNVEYL, MG-K10) have been added. One injectable poly-L-lactic acid microsphere filler (Lizhiran) was approved in China in July 2025.

**Dermatology Business Planned for Spin-off to Fully Realize High-Growth Independent Value**

The company proposes to spin off subsidiary Dermai Pharma for independent listing on the Hong Kong Stock Exchange Main Board through introduction listing and distribution in specie. As of H1 2025, Dermai Pharma has established a portfolio including three marketed products (Yilqu, Contractubex, Ansuxi), four clinical-stage pipeline products (ruxolitinib cream, MG-K10, povorcitinib, CMS-D001), and multiple preclinical candidates covering major dermatological therapeutic areas. Additionally, two series of dermatology-grade skincare products have been launched for skin disease prevention and care, including the Helingsu soothing series and Contractubex® azelaic acid acne treatment product series.

**Risk Factors:** Volume-based procurement impact exceeding expectations, R&D product launch progress below expectations, new product commercialization below expectations, overseas expansion below expectations, expense investment exceeding expectations, and industry policy changes.