Since hitting an interim high of HK$19.90 during intraday trading on August 8 last year, BOAN BIOTECH's (06955) share price has embarked on a downward trend lasting over five months. On January 5 this year, the stock touched a new intraday low for the year at HK$8.15, marking a peak-to-trough amplitude of 59.05% during this decline. Benefiting from the upward trend in the first half of last year, even with its market capitalization reduced to just HK$5.312 billion by the end of the year, BOAN BIOTECH managed to successfully maintain its Stock Connect status by securing a position above the then removal threshold of HK$6.026 billion, thanks to its average daily market cap of HK$6.565 billion during the second review period of 2025. However, as a commercialized pharmaceutical company that has achieved profitability for three consecutive reporting periods, BOAN BIOTECH's current market capitalization has fallen below HK$6 billion, significantly lower than the required threshold for the next review period. With the 2025 annual report approaching, whether the company can achieve a共振 between fundamental and technical factors to stage a rebound and maintain its Stock Connect status will likely directly influence the future investment direction of secondary market investors.
From a technical perspective, BOAN BIOTECH has been in a downward channel characterized by "falling prices and shrinking volume" since last August. Overall, after hitting a high and the upper Bollinger Band on August 8, the stock formed a reversal doji star the next day and began a technical regression towards the lower Bollinger Band. For the subsequent three months, the stock price fluctuated between the middle and lower Bollinger Bands, indicating subdued market sentiment. Specifically, after first touching the lower Bollinger Band on August 20, the price attempted a pullback towards the middle band, but a lack of volume due to cautious off-market investors led to a failed rally. The failure to reach the middle band on August 27 triggered some intraday divergence the following day, prompting some shareholders to sell. To further shake out weak holders, on September 16, the stock experienced a sharp rise followed by a pullback, closing up over 12% with a large bullish candlestick. This sudden surge amplified intraday divergence, with trading volume reaching 81.3288 million shares, which further increased the concentration of holdings. However, this large bullish candle failed to boost market sentiment. In the subsequent trend, the Bollinger Bands noticeably narrowed, guiding the price into a sustained oscillating decline, with the stock essentially moving mechanically between the middle and lower bands in a state of low-volume decline.
During this prolonged four-month period of low prices, there were only four trading days where the daily trading volume exceeded 10 million shares, indicating significantly weaker market participation compared to before. Even a move to challenge the upper Bollinger Band on November 27 last year lacked substantial volume support and failed to form a decisive breakout candlestick, constituting a typical Bollinger Band "false breakout" technically, after which the stock continued its oscillating decline to an intraday low on January 2 this year. Analyzing volume, the consistently weak daily trading volume during this phase signaled a severe lack of interest from off-market investors and insufficient buying support, leading to the phenomenon of price decline on thin volume.
On January 2, after touching the lower Bollinger Band for the sixth time, BOAN BIOTECH's share price experienced another technical oversold rebound, but this time the situation differed. On January 9, the stock closed up 6.88%, forming another large bullish candlestick, but crucially, this was accompanied by significantly amplified volume, with trading volume reaching 68.6878 million shares, and the candlestick实体 breaking above the upper Bollinger Band. Although the price subsequently experienced a technical pullback, the increased volume suggests that off-market investors' willingness to enter at the current low price levels has notably strengthened compared to before. During the subsequent price retreat, daily trading volume again surpassed 10 million shares on January 22 and January 27, indicating a clear improvement in market trading sentiment.
Whether the stock can cease its decline, rebound, and escape the "removal threshold" appears crucial for this year. Data indicates the next regular review for the Hang Seng Index and Stock Connect is scheduled for September 7 this year, with results announced on August 25, covering the review period up to June 30, 2026. BOAN BIOTECH's current average daily market capitalization during this review period is HK$6.674 billion, only HK$240 million below the current threshold of approximately HK$6.914 billion. Given that five months remain until the end of the review period, BOAN BIOTECH can maintain its Stock Connect status in the next adjustment if its share price and market capitalization stabilize and recover, remaining steady.
Currently, maintaining robust fundamentals and seeking significant Business Development (BD) opportunities might be the key to a turnaround for BOAN BIOTECH's share price. A major reason for the stock's decline last August was related to centralized drug procurement. On August 1, the Anhui Provincial Drug Centralized Procurement Platform initiated the centralized procurement of biological drugs, covering eight varieties including adalimumab, bevacizumab, denosumab, rituximab, trastuzumab, tocilizumab, infliximab, and pertuzumab. This list included three of BOAN BIOTECH's commercialized products: Boyounuo® (bevacizumab), Boluojia® (denosumab 120mg), and Boyoubei® (denosumab 60mg). The short-term negative impact from this policy, combined with the overall downturn in the Hong Kong pharmaceutical sector in the second half of last year, were significant factors behind the sharp decline in BOAN BIOTECH's share price.
However, examining the H1 2025 financial report disclosed by the company, revenue reached RMB 393 million, a year-on-year increase of 8.39%; net profit attributable to shareholders was RMB 21 million, a decrease of 66.74% year-on-year; and the overall gross profit margin was 71.83%, down 6.04 percentage points. While superficially indicating significant volatility in profitability for H1 2025, the short-term decrease in gross margin was attributed to the launch of the new denosumab product, and the profit decline was due to a high base effect from the concentrated recognition of licensing revenue in the same period last year. On the other hand, the company's current period expense ratio was 67.27%, a reduction of 3.56 percentage points year-on-year. As of the reporting period, cash and cash equivalents stood at RMB 660 million, a substantial increase of 231.86% year-on-year, indicating relatively strong cash flow. This suggests the company's overall fundamental performance remains relatively stable. If the 2025 annual report can maintain this stable fundamental performance, it may attract more attention from off-market investors.
Beyond fundamentals, the company's R&D pipeline also holds potential. Taking the PD-1/IL-2 target, which garnered attention at the recent JPM conference, as an example, BOAN BIOTECH's innovative pipeline includes PR201, a PD-1/IL-2 antibody-cytokine fusion protein. Besides featuring a highly active PD-1 antibody, its IL-2 module employs two masking mechanisms—"cis-activation" and "tumor microenvironment-specific enzymatic cleavage activation"—to selectively release IL-2 in tumors, enhancing safety. It is expected to submit an IND application in China in Q2 2026. Additionally, PR203, a bispecific antibody targeting TL1A and IL23p19, utilizes a novel 1+1 structure and long-acting Fc engineering in its design, demonstrating good druggability and efficacy in vitro and in vivo, possessing potential for significant BD deals, which could act as a catalyst for a subsequent share price rebound.
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