While public funds do not represent the entirety of institutional investors, they serve as a leading indicator for mainland institutions, and their investment approach towards a specific target can reveal certain insights.
Recently, compared to technology stocks, the overall performance of pharmaceutical stocks has been relatively subdued. Against a backdrop of limited opportunities for standout performance, individual stocks occasionally exhibit strong single-day or two-to-three-day rallies but lack sustained, stable excellence. On the last trading day before the Dragon Boat Festival, Haoyuan Pharmaceutical, a CXO sector stock from the STAR Market, recorded a single-day gain of 15.08%, with its price briefly breaking through 90 yuan during the session.
Wind data shows that as of midday close on June 24, Haoyuan Pharmaceutical (688131.SH) has gained approximately 25% year-to-date, still significantly trailing its full-year gain of 101.90% from last year. However, looking at its performance since listing over a longer period, from its year-end listing on the STAR Market in 2021, the stock price declined annually from 2022 to 2024 based on yearly charts, but this trend was completely reversed last year. Additionally, with a total share capital of only about 213 million shares, its latest total market capitalization is just 19.5 billion yuan.
Particularly noteworthy is that, based on the company's quarterly top ten shareholder details, public funds, especially actively managed equity public funds, have rarely appeared on the list for most periods. However, starting from the 2024 annual report, star fund manager Ge Lan's flagship product, China Europe Healthcare, appeared among the top ten and has remained in the top ten for six consecutive quarters. So, why has she chosen to consistently believe in this company?
China Europe Healthcare's Three Phases of Investment
While public funds are not the entirety of institutional investors, as leading indicators for mainland institutions, their investment approach towards a specific target can reveal certain insights. Compared to leading stocks in the sector like WuXi AppTec, Pharmaron, and Asymchem, Haoyuan Pharmaceutical, with a relatively short listing history, has not yet reached a state of being heavily held by public funds collectively. However, its long-term potential value is beginning to be recognized by select public funds. Moreover, for a significant period in the stock's top ten shareholders list, at least one public fund has been visible.
Wind data shows that from the 2021 interim report to the 2022 interim report, no public funds appeared among the top ten shareholders. In the 2022 third-quarter report, China Europe Healthcare Hybrid, as the sole public fund representative, entered the list, ranking eighth among the top ten shareholders. The fund manager at that time was Ge Lan, and the fund held 1.8749 million shares, placing it eighth. However, by the annual report, the fund temporarily disappeared from the list, replaced by another star pharmaceutical fund, Rongtong Healthcare Industry Flexible Allocation Fund. By the 2023 first-quarter report, China Europe Healthcare made a comeback, once again becoming the only public fund representative among the top ten shareholders.
Starting from the 2023 interim report for two quarters, the public fund representative among Haoyuan Pharmaceutical's top ten shareholders switched to the passive index fund, Huabao CSI Healthcare. This is a veteran index fund established in 2015, whose performance benchmark is the CSI Healthcare Index return rate. The fund manager at that time was the company's star index fund manager, Hu Jie.
Subsequently, the stock's top ten shareholder list experienced a period without public fund representation until the 2024 annual report, when China Europe Healthcare's name reappeared. At that time, Ge Lan newly held approximately 7 million shares of the stock, and the fund ranked fourth among Haoyuan Pharmaceutical's top ten shareholders. By the 2025 first-quarter report, Ge Lan chose to increase her holdings, and China Europe Healthcare's ranking rose to third, with the fund holding about 8.896 million shares of Haoyuan Pharmaceutical at that time.
By the 2025 interim report, Ge Lan partially reduced her holdings to 6.1185 million shares, and her ranking fell to fifth among the top ten shareholders. However, in the subsequent third-quarter report of that year, Ge Lan chose to increase her holdings again. As of September 30, she ranked fourth among the top ten shareholders with holdings of 7.2573 million shares.
Looking at the two most recent quarters, in the 2025 annual report, China Europe Healthcare still held a high position at fourth. New entrants to the top ten shareholders included the actively managed pharmaceutical fund, Southern Healthcare Flexible Allocation, and the aforementioned passive pharmaceutical index fund, Huabao CSI Healthcare. In the 2026 first-quarter report, Huabao CSI Healthcare rose to sixth place, while China Europe Healthcare fell to ninth.
From the above review, it is clear that the record for the longest continuous holding of the stock by a single public fund is most likely the six quarters maintained by China Europe Healthcare to date. Although, compared to the fund's top ten holdings list quarter by quarter, Haoyuan Pharmaceutical has essentially never entered the fund's top ten holdings list, likely due to size considerations, its persistent presence over multiple quarters still demonstrates the fund manager's favorable view.
In a written response, Tan Xiongtian, a member of the investment committee at Puzhuo Capital, analyzed: "Ge Lan's continuous holding of Haoyuan Pharmaceutical for six quarters aligns with her core investment framework focused on the innovative drug industry chain. As a hidden heavyweight holding in China Europe Healthcare, Haoyuan Pharmaceutical is a representative company in the small-molecule CXO sector, combining earnings elasticity and strategic industry positioning. On one hand, the company's performance has shown a sustained reversal since 2024, with non-GAAP net profit growth consistently outperforming the industry, and strong certainty in the growth of its high-margin front-end business, fitting her stock selection approach based on profit cycles and operational trends. On the other hand, amid the broader industry trends of domestic innovative drug BD out-licensing and recovery in R&D investment, demand for scientific research reagents and CRO services in the drug discovery stage is recovering first. Haoyuan Pharmaceutical, as a core front-end supplier, directly benefits. Simultaneously, its technological layout in cutting-edge innovative areas like ADC and PROTAC aligns with the long-term direction of innovative drug industry upgrading, making it a target for long-term allocation in this niche sector."
Robust Financial Performance at Haoyuan Pharmaceutical
Wind data shows that since 2026, Haoyuan Pharmaceutical has held a total of 10 institutional research activities to date, involving formats such as online meetings and on-site meetings, with 9 being on-site meetings. Among these, the one with the most participating institutions was the on-site meeting on April 30, involving a total of 32 institutions.
Wind data shows that, aggregating these ten research activities, institutions participated a total of 77 times. Fund companies were not the most active participants, ranking second with 23 research activities, while securities companies ranked first among various institutions with 39 research activities.
Looking at the most recent research activity earlier this month, institutions primarily focused on multi-angle inquiries regarding the company's future development plans for its main business. For example, in response to the question, "Given the current high growth in the ADC industry and strong downstream demand, could you introduce the company's core competitiveness and business layout plan in the ADC field, and how you plan to capture industry development opportunities to expand related business?", Haoyuan Pharmaceutical stated: "The company was one of the early domestic enterprises to engage in ADC Payload-Linker research. Relying on years of deep cultivation in the ADC field, we have established strong competitive advantages in the small-molecule segment of ADC business and built a large-scale Payload-Linker library. Leveraging these core capabilities, the company has supported over 1,700 clients in ADC R&D and production, assisted in completing over 70 CMC projects, with 5 projects advancing to the BLA application stage and 1 project achieving commercial launch. Meanwhile, our Chongqing Haoyuan Antibody-Drug Conjugate CDMO base has been successfully put into operation and passed the EU Qualified Person (QP) audit, marking that our ADC commercial production capability meets international compliance standards. Furthermore, the company is accelerating its international layout, actively engaging in exchanges with domestic and foreign enterprises and research institutes, focusing on integrating cutting-edge conjugation technologies, and fully promoting the development of innovative ADC pipelines with differentiated clinical advantages, providing global clients with more innovative and efficient one-stop solutions."
Additionally, the company's overseas business has achieved significant progress in recent years. In a previous research session, when responding to the institutional question, "We noted the company's new acquisition and consolidation of a UK enterprise in 2025. What is the core rationale for this investment, and what are the subsequent strategic layout and development plans?", Haoyuan Pharmaceutical pointed out: "In November 2025, the company further acquired UK-based FC. Regarding subsequent strategic layout and development plans: First, continue the existing supply chain cooperation system, leveraging UK FC's brand advantages and channel resources in the European chemical reagents field to rapidly expand the European market. Second, fully utilize UK FC's high-quality pharmaceutical enterprise client resources and build it into an important platform for attracting overseas CDMO business, achieving business synergy and empowerment. Third, UK FC possesses decades of brand heritage in scientific research reagents, with rich sales channels, loyal customer base, and leading market position, giving it core brand advantages and channel value."
The reasons behind institutions' enthusiasm for researching the company are undoubtedly varied, but the primary reason remains strong performance. According to the 2025 annual report, the company's operating revenue was 2.877 billion yuan, a year-on-year increase of 26.73%, with a 5-year compound annual growth rate (CAGR) of 31.26%. In 2025, the company's net profit attributable to shareholders was 240 million yuan, a year-on-year increase of 18.96%. Net profit was 240 million yuan, with a 5-year CAGR of 5.86%. Among CXO enterprises listed on the STAR Market, Haoyuan Pharmaceutical led with 2025 revenue of 2.877 billion yuan, being the only company in the sector with revenue exceeding the 2 billion yuan threshold.
Tan Xiongtian analyzed: "From a fundamental and financial data perspective, Haoyuan Pharmaceutical's core highlights are concentrated in the recovery of profit quality and high growth in core business segments. The 2025 annual report shows the company achieved operating revenue of 2.877 billion yuan, a year-on-year increase of 26.73%; non-GAAP net profit attributable to shareholders was 247 million yuan, a year-on-year increase of 38.1%, with growth rate significantly higher than revenue growth, reflecting continuous optimization of the profit structure. Among this, front-end life science reagent business revenue was 1.991 billion yuan, a year-on-year increase of 32.8%, with gross margin as high as 61.9%, serving as the core ballast for company profits and cash flow. Simultaneously, overseas business revenue increased by 34.19% year-on-year, demonstrating the effectiveness of global expansion."
Looking at the company's 2026 first-quarter report, it also achieved growth in both revenue and net profit. The financial report shows that as of the end of the reporting period, the company's total operating revenue was 729 million yuan, a year-on-year increase of 20.21%; net profit attributable to shareholders was 67.8405 million yuan, a year-on-year increase of 8.75%. On a single-quarter basis, first-quarter total operating revenue was 729 million yuan, a year-on-year increase of 20.21%; first-quarter net profit attributable to shareholders was 67.8405 million yuan, a year-on-year increase of 8.75%. Institutions forecast that net profit will maintain a high growth rate of over 38% from 2026 to 2027.
"The 2026 first-quarter report continued the recovery trend, with revenue of 729 million yuan, a year-on-year increase of 20.21%, and comprehensive gross margin recovering to 52.43%, indicating sustained improvement in profitability levels. Regarding interim report performance, from an order perspective, in the first quarter of 2026, the company's small-molecule orders in hand had already reached 860 million yuan, a significant year-on-year increase. The high growth in front-end reagent business continues, while back-end CDMO capacity utilization is gradually ramping up. It is expected that first-half revenue will maintain a year-on-year growth rate of around 20%, with non-GAAP net profit growth likely to continue exceeding revenue growth, further releasing profit elasticity," Tan Xiongtian commented while analyzing the quarterly report.
Two Core Businesses Form Main Revenue Sources
From an industry perspective, Haoyuan Pharmaceutical is not a widely recognized leader in its sector. Compared to WuXi AppTec with a market capitalization of approximately 340 billion yuan, Haoyuan's market cap of about 19.4 billion yuan is clearly not in the same league. However, the company's development strategy and characteristics are quite distinct. As a domestically scarce integrated "front-end + back-end" pharmaceutical R&D and production platform company, its core highlights are concentrated across multiple dimensions including business layout, technological capabilities, and global operations. In recent years, its performance growth rate has far exceeded the industry average, making it an innovative biopharmaceutical enterprise with high attention from the capital market. The company's two core businesses are the front-end life science reagents segment and the back-end CDMO segment.
When analyzing the company's characteristics at the industry level, Tan Xiongtian emphasized: "The differentiated focus on the small-molecule track is the core industrial value of Haoyuan Pharmaceutical in the CXO industry. Unlike leaders with full-industry-chain layouts, the company deeply cultivates the entire process of small-molecule drug R&D, forming an integrated synergistic advantage of front-end reagents + back-end CDMO: The front-end tool compounds and building blocks business has cumulatively amassed a reserve of over 159,000 SKUs, covering over 20 signaling pathways and hundreds of drug targets, with deep technological accumulation in niche areas like high-difficulty chiral molecules, ADC high-potency payloads, and PROTAC degraders, capable of supporting client needs from drug discovery to preclinical research. The back-end leverages front-end client and technological accumulation to extend into process development and production of APIs and intermediates, forming a natural flow of client demand."
"Its competitive barriers are mainly reflected in three layers: First, technological barriers, possessing the ability to synthesize complex molecules with 19 chiral centers, and mastering cutting-edge processes like photochemical reactions and biocatalysis. Second, supply barriers, the massive product reserve and rapid iteration capability form a moat on the supply side, making it difficult for new entrants to catch up in the short term. Third, client barriers, with over 15,000 global cooperative clients, high repurchase rates and strong stickiness, forming long-term stable cooperative relationships with multinational pharmaceutical companies and research institutions. In the long term, the company is extending into areas like ADC integration and AI-powered R&D, continuously broadening its growth boundaries," he further analyzed.
Looking at the revenue contribution of the two core businesses, based on 2025 data, first is the front-end high-margin reagent business. Building blocks and tool compounds business revenue accounted for nearly 70%, with gross margin exceeding 60%. The cumulative reserve of life science reagents is approximately 159,000 types, covering 98,000 types of building blocks and over 60,000 types of tool compounds, with product library scale leading domestically. It serves over 15,000 global clients, and related products have supported research users in cumulatively publishing 72,000 articles in top journals like Nature, highlighting strong brand barriers.
Second is the back-end high-growth CDMO business. API and intermediate development business accounted for about 30%, focusing on cutting-edge tracks like ADC and PROTAC. It has cumulatively undertaken over 1,049 innovative drug projects, with over 140 entering clinical Phase II and beyond stages. The value of orders in hand exceeded 670 million yuan, a year-on-year increase of over 30%. After the Chongqing ADC base commenced production, it formed a "three-in-one" full-chain service system, making it a domestically scarce one-stop ADC CDMO enterprise.
When discussing the company's fundamental highlights, Zhang Yi, Chief Analyst at iMedia Consulting, emphasized: "The company does not blindly pursue a full-category CXO layout but focuses on the small-molecule track, following a differentiated path. The core advantage of its products lies in building an industry-scarce front-end reagent traffic driver, combined with back-end CDMO conversion to form a closed loop. Additionally, the company's library of 100,000-level building blocks and compounds forms a rigid demand traffic entry point for scientific research. Therefore, client transition from clinical reagent procurement naturally extends to mid-to-late-stage custom API manufacturing, resulting in relatively low customer acquisition costs."
However, Zhang Yi also pointed out areas where the company still needs improvement: "Compared to sector leaders, its actual clinical experience is relatively lacking, particularly in large-molecule business. Additionally, there are issues like back-end depreciation dragging down gross margin, and orders from large pharmaceutical companies are still relatively few."
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