As China enters its "16th Five-Year Plan" period, artificial intelligence has once again been elevated as a crucial pillar of national development strategy. From a policy perspective, a core theme of the plan is to systematically advance an "AI-driven economy" using "AI+" as the fundamental framework. The policy target is clear: by 2030, AI is expected to penetrate approximately 90% of economic activities, covering key sectors such as manufacturing, finance, healthcare, and transportation. It is evident that the plan provides a clear roadmap for AI development from the top down, shifting the policy focus from "point-specific support" to "systematic empowerment." This represents a significant tailwind for XTALPI (02228), the global leader in the "AI for Science" (AI4S) industry, which recently reported its first annual profit.
In 2025, XTALPI continued to deepen its focus on "AI for Science." Alongside rapid growth in its antibody business, the company successfully expanded into multi-modal innovation platforms including peptides, molecular glues, and nucleic acids. This progress has pushed its enabling services and incubated companies' innovative pipelines into the validation stage. The diversification and maturation of its business lines signal that XTALPI has formally entered a phase of value realization characterized by "hardcore innovation, commercial monetization, and performance validation."
On March 25, XTALPI released its 2025 annual results. The financial report showed that the company achieved revenue of RMB 803 million, a substantial increase of 201.25% year-over-year. Correspondingly, it recorded a net profit of RMB 124 million, turning a profit for the full year for the first time. Consequently, XTALPI has become the first profitable Hong Kong-listed company in the AI for Science field. The company's cash balance at period-end stood at a robust RMB 7.069 billion. This ample financial reserve provides solid backing for continued R&D investment, further consolidating XTALPI's leading position in the AI for Science sector.
Guided by the national plan, the trend of "AI empowering scientific research and industrial application" is firmly established. By achieving profitability at scale, XTALPI not only provides compelling evidence of AI for Science's transition from a technical concept to tangible industrial capability but also offers an observable, high-quality model for the national push towards transforming scientific research paradigms.
Against a backdrop of overall market volatility influenced by external factors, investors are increasingly willing to pay a premium for clear value realization. Solid commercialization and profitability are undoubtedly key metrics for assessing a tech company's ability to deliver on its innovative promises. From this perspective, the 201% surge in revenue and the inaugural full-year profit stand out as the most direct highlights of XTALPI's latest annual report.
In recent years, thanks to continuous iteration of AI models and workflows, coupled with ongoing data accumulation, the scale effects of XTALPI's integrated "AI + Robotics" platform business have become increasingly pronounced. Driven by extensive commercial partnerships, the company can continuously validate its platform capabilities through the rolling realization of orders, upfront payments, milestone payments, and royalties. The Drug Discovery Solutions business is a primary vehicle for this commercial value realization currently.
A key direct driver behind XTALPI's first full-year profit in 2025 was significant revenue growth from its Drug Discovery Solutions business. This segment reported revenue of RMB 538 million during the period, a dramatic increase of 418.93% year-over-year. On August 5 last year, XTALPI announced a pipeline collaboration with DoveTree with a total potential order value of approximately HKD 47 billion (USD 5.99 billion), from which it received an upfront payment of around HKD 400 million. This collaboration also set a new record for deal size within the AI-driven drug discovery (AIDD) field. The partnership involves the discovery and development of small molecule drug candidates targeting several high-value targets in oncology, autoimmune diseases, and neurological disorders. The related pipelines are progressing smoothly, and the strategic collaboration has entered a phase of deep execution.
This "high upfront, high milestone, high royalty" deal with DoveTree reflects strong recognition within the industry for XTALPI's robust innovative R&D capabilities and its differentiated advantages in drug discovery solutions. In recent years, focusing on its three core areas—drug discovery, materials research, and lab digitalization—XTALPI has continuously enhanced its AI model capabilities. It has built an intelligent, autonomous experimental platform covering molecule generation, activity prediction, and reaction optimization, generating vast amounts of data used to iteratively improve its vertical AI models. Data shows the company has cumulatively developed over 200 AI models, including platforms like the ID4Inno™ small molecule drug discovery platform, the Xtalfold macromolecule drug AI platform, the Xtalgazer® solid-state drug development platform, the XFEP free energy perturbation platform, and the PatSight literature intelligence analysis software. These enable accelerated end-to-end R&D from target identification to pre-clinical candidate drugs.
Beyond the deep collaboration with DoveTree, XTALPI has also entered into a multi-target strategic collaboration and platform licensing agreement with global pharmaceutical leader Eli Lilly in the macromolecule drug space, valued at up to USD 345 million. This further validates the value of its AI macromolecule platform with international giants. Simultaneously, XTALPI is further leveraging the value of its AI drug platform by extending its proven AI R&D capabilities to cutting-edge therapy areas like peptides. Its self-developed AI peptide R&D platform, PepiX™, has gained high recognition from leading industry players globally and achieved multiple commercial milestones.
For an innovative technology company entering its commercial phase, investment value is demonstrated not only through ongoing deal signings with domestic and international pharmaceutical companies but also through the ability to translate R&D outcomes. Beyond the steady progress of major commercial projects, the results from XTALPI's AI platform enablement partnerships are also notable. During the reporting period, empowered by XTALPI's AI platform, Signet Therapeutics's "AI+Organoid" pipeline achieved consecutive breakthroughs. Its globally first-in-class targeted gastric cancer therapy progressed smoothly in clinical trials and received a Galen Prize nomination, highlighting its global innovative value. Also during the period, ReviR Therapeutics, leveraging XTALPI's AI platform, successfully achieved simultaneous clinical application submissions and approvals in both China and the US for RTX-117, the first domestic Class 1 innovative drug for CMT, which also received FDA Orphan Drug designation. Furthermore, XTALPI's empowerment of Leman Biotech's AI+Metabolic Reprogramming technology platform led to a series of clinical breakthroughs in several major disease areas. The company also reached a significant clinical R&D milestone with PEP08, a next-generation PRMT5 inhibitor discovered in collaboration with Sapience Therapeutics. These key collaborative advances validate the real-world efficiency and core drug development value of XTALPI's AI technology in new drug R&D.
While steadily advancing its core AI drug discovery business, XTALPI is also leveraging its platform leadership to explore high-growth-potential scenarios like consumer health and new materials, unlocking new blue oceans for industrial collaboration and solidifying its position as a leader in the "AI for Science" arena. In recent years, XTALPI has successfully entered the consumer health sector empowered by its AI platform. Based on its self-developed AI molecule development platform ID4, it successfully designed two innovative topical active ingredients for hair growth—Remeanagen™ (XTP-118) and the peptide AquaKine™ (XTP-016). Both molecules have successfully passed US INCI registration, and their combined formulation product, Groland, has obtained FDA cosmetic product listing, marking the formal entry of XTALPI's AI platform into the consumer health field.
In the new materials sector, in January of this year, XTALPI partnered with Jinko Solar, the world's largest integrated photovoltaic manufacturer, to jointly build the world's first fully closed-loop "AI decision-making - robotic execution - data feedback" intelligent manufacturing line for tandem solar cells. This powerful collaboration aims to commercialize intellectual property in the perovskite field. The market anticipates this collaboration could reach scaled production within approximately three years. By accelerating its enablement of leading companies in new materials, thereby enhancing the commercial conversion efficiency of its own innovative technologies, XTALPI is fostering "AI+New Materials" as another important growth driver.
Discussions surrounding AI Agents have intensified this year, drawing market attention to this area. As a key application form for commercializing large AI models, AI Agents are evolving from technical tools into new factors of production. The industry is entering a critical period of scaled implementation, with high investment enthusiasm in the sector. In August last year, the State Council's "Opinions on Deepening the 'AI+' Initiative" set a target for the penetration rate of next-generation intelligent agent applications in China to exceed 90% by 2030. However, the domestic AI Agent field is still in its early stages. While investment activity has increased significantly with frequent large funding rounds, commercialization faces challenges related to technical capability, economic viability, ecosystem development, and safety.
Against this backdrop, XTALPI has leveraged its technical advantages to build a unique industry R&D closed-loop integrating "AI model prediction - robotic wet-lab execution - data feedback to AI + Multi-Agent intelligent scheduling." For instance, in the AI drug discovery field, during the reporting period, XTALPI collaborated with a leading international pharmaceutical company to deploy an autonomous condition screening system. By integrating core capabilities in Multi-Agent systems, robotic labs, and chemistry domain models, the system achieves a full closed-loop process from AI-recommended reaction conditions and autonomous experimental parameter design to robotic high-throughput execution and chemical reaction condition optimization. Trained on hundreds of thousands of high-quality real experimental data points, the system supports defining R&D objectives using natural language and enables precise robotic execution of tasks like sample addition, temperature control, and detection, significantly enhancing data consistency and experimental stability. This demonstrates that XTALPI has already deeply linked Agent value to tangible business outcomes by integrating it with "AI for Science" innovation scenarios, redefining R&D paradigms while providing a successful template for AI Agent commercialization.
Introducing Multi-Agent into AI drug discovery is just one facet of XTALPI's approach to industrial AI Agent deployment. The company is accelerating the deep integration of "AI + Robotics + Multi-Agent," making forward-looking investments in a fully intelligent R&D system. It aims to build a future chemistry platform centered on AI models, robotic laboratories, and intelligent Agents, connecting the entire chain from supply chain management to compound design, synthesis, screening, and process optimization. The ultimate goal is to provide one-stop intelligent R&D services for biopharmaceuticals, new materials, and other fields. The company has already made progress in industrializing this business within the chemistry domain. During the reporting period, its Future Chemistry business performed impressively, successfully expanding its client base to include several large pharmaceutical companies. Thanks to high-quality delivery efficiency and standards, the business achieved a customer repeat business rate exceeding 75%. Core technology models were successfully deployed in multiple customer cases during the period, receiving high recognition. From a market perspective, the Future Chemistry platform can broadly empower R&D scenarios across pharmaceuticals, chemicals and chemical engineering, new materials, and new energy, representing a potential market space in the trillions of US dollars. Against the pressing backdrop of the need for R&D intelligence upgrades, the platform's high generality and transferability position XTALPI to continuously extend its reach, aspiring to become a core foundation driving the intelligent transformation of the broader chemical and industrial sectors.
In conclusion, from a capital and market perspective, the recent sustained volatility of the Hang Seng Index is partly attributable to external factor disruptions and relatively weak liquidity. However, amidst this secondary market adjustment, the industry itself stands at an inflection point transitioning from "quantitative change" to "qualitative change," and from an "investment phase" to a "harvest phase." This has led to a noticeable divergence between the stock prices and the strong fundamentals of leading "AI for Science" companies like XTALPI. As XTALPI's AI industrialization and enablement process accelerates, and as it demonstrates strong competitiveness in multiple frontier innovation areas like AI Agents, the company's leading value is poised for ongoing validation. At the inflection point where the AI industry shifts from "capability demonstration" to "results delivery," XTALPI, having率先 pioneered a viable commercial closed-loop, is emerging as one of the most certain investment propositions within the AI for Science domain. Against this backdrop, considering that the company's current valuation has entered a reasonable range, once market sentiment stabilizes and a sector trend reversal is confirmed, its stock price has the potential to break out of its volatile range and demonstrate significant upward momentum for investors.
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