Huafu Securities released a research report initiating coverage on SUNSHINE PHARMA (06887), highlighting its leadership in the influenza sector, solid fundamentals, and robust innovation pipeline with strong growth potential. The company focuses on three key therapeutic areas: anti-infectives, chronic diseases, and oncology.

**Anti-infectives**: SUNSHINE PHARMA maintains a leading position in influenza, hepatitis C (HCV), and hepatitis B (HBV) pipelines. - **Influenza**: The company holds the top market share in China for oseltamivir and operates the world's largest production base, ensuring ample supply capacity. - **HCV**: Its pan-genotypic therapy, phosphonatantavir and ecophosphobuvir, received NMPA approval for launch in February and March 2025, respectively. - **HBV**: Moficestat is the fastest-developing capsid inhibitor in China and the only domestic product in Phase III trials. Additionally, its siRNA therapy (HECN30227) for HBV entered clinical trials in October 2025.

**Chronic Diseases**: - **Idiopathic Pulmonary Fibrosis (IPF)**: Efinidone, a potential best-in-class (BIC) drug, targets a global $4 billion market. It has completed Phase I trials in China and the U.S., with impressive Phase II data showing a 96% reduction in decline compared to placebo, significantly outperforming pirfenidone (47%). It is now in Phase III trials. - **Insulin Expansion**: The company expects FDA approval for its insulin glargine in the first half of 2026, contributing to revenue growth. Its insulin aspart Pre-IND application has been submitted, with a BLA filing planned by end-2025 and approval expected by end-2026.

**Oncology**: - **AML Treatment**: The BCL2 inhibitor creflotinib is projected for launch in 2027 under a licensing agreement with 3SBio, combining strengths in oncology. - **Pipeline Highlights**: - Leronitinib mesylate (Phase III) for esophageal cancer. - HEC53856 (Phase II) for chemotherapy-induced anemia. - HEC201625 (IND-ready), an oral PD-L1 small molecule. - Continued expansion into new technologies, including ADCs and TCEs.

**Earnings Forecast**: Huafu Securities projects net profits of RMB 250/540/930 million for 2025-2027, with PS ratios of 4.5x/3.7x/3.2x, offering attractive valuation compared to peers.

**Risk Factors**: Potential risks include underperformance in product sales, delays in R&D progress, and rising operational costs.