GTHT Securities has released a research report indicating that as the active pharmaceutical ingredient (API) business gradually emerges from the bottom of its cycle, core business profits are expected to resume growth. Additionally, with overseas partner Novo Nordisk (NVO) continuing to advance the core pipeline UBT251, the value of UNITED LAB's (03933) innovative pipeline is anticipated to be progressively realized. The firm forecasts earnings per share (EPS) for the company for 2026-2028 to be RMB 0.55, RMB 0.81, and RMB 1.00, representing growth rates of -48%, 49%, and 23%, respectively. Using comparable company analysis, the report applies a 2026 price-to-earnings (P/E) ratio of 25 times to the net profit attributable to the parent company, deriving a target price of HK$15.53 and maintaining an "Add" rating on the company. The main viewpoints from GTHT Securities are as follows.
Cyclical businesses are gradually bottoming out, awaiting a full recovery from the cycle's low point. In 2025, sales of intermediates decreased by 39.4% to RMB 1.612 billion, with a segment profit margin of 10.8%. API sales declined by 23.1% to RMB 4.90 billion, with a segment profit margin of 5.6%. The report suggests that UNITED LAB is expected to navigate through the cyclical trough by deepening its vertically integrated industrial layout, diversifying its business operations, enriching its product portfolio, and promoting synergistic development across formulations, APIs, animal health, and R&D, all while maintaining robust cash liquidity and actively responding to market changes.
Several key innovative drug projects are actively advancing through out-licensing collaborations, with the core pipeline UBT251 progressing smoothly overseas. In 2025, United Bio-Medicine entered into an exclusive licensing agreement with Novo Nordisk for the triple-target agonist UBT251 (GLP1R/GIPR/GCGR). The overseas partner, Novo Nordisk, initiated a Phase 1b/2a clinical study for overweight/obesity in the first quarter of 2026 and plans to commence a Phase 2 clinical study for type 2 diabetes in the second half of 2026, with clinical data readout anticipated in 2027. Other key R&D projects include the novel peptide melanocortin receptor (neuropeptide Y2R) agonist injection UBT37034, for which clinical trial approvals have been obtained in both China and the US for the overweight or obesity indication. The first subject was enrolled in the Chinese Phase I trial in March 2026. The oral GLP-1R small molecule agonist UBT48128 is expected to have clinical trial applications submitted in China and the US in 2026.
The formulation business is showing structural growth, with insulin volumes expanding rapidly and international布局 accelerating. Revenue from the insulin series increased by 57.4% year-on-year to RMB 1.946 billion. The company's insulin products won a tender from the Brazilian Ministry of Health, setting a record for export volume among similar Chinese products. Revenue from exports of human-use formulations reached RMB 554 million, with business collaborations established with multiple clients in Belt and Road countries and emerging markets, accelerating product registration and commercialization.
Risk factors include potential volatility in API prices, the risk of failure in clinical development for innovative drugs, the risk that the progress of overseas licensed pipelines may not meet expectations, and policy-related risks.
Comments