Recently, TIGERMED (03347) has shown a clear trend of halting declines and rebounding. Since hitting a low of HK$36.08 on November 21 last year, the company's stock price has continued to recover, experiencing an upward trend for nearly two months. By January 15 this year, the price had risen to a high of HK$54.85, representing a maximum increase of 52.02% during that period. However, this was followed by nearly half a month of technical decline, with the stock price falling below HK$50 on January 28. At that point, the stock had technically touched the middle Bollinger Band and showed a tendency to decline further toward the lower band. This trend was interrupted by two consecutive days of significant gains on January 29 and 30, which forcefully shifted the stock's trajectory back to a stabilizing and rising pattern. The fundamental reason for this change in market sentiment likely lies in the company's 2025 annual results forecast.
Despite the profit warning, the market has shown approval for the company's strategy of using investments to support research. After market close on January 29, TIGERMED disclosed its 2025 annual results forecast. In this profit warning announcement, the company stated that it expects 2025 revenue to be between RMB 6.66 billion and RMB 7.68 billion, representing a year-on-year increase of 1% to 16%. Net profit attributable to shareholders of the listed company is projected to be between RMB 830 million and RMB 1.23 billion, a year-on-year increase of 105% to 204%. However, net profit attributable to shareholders after deducting non-recurring gains and losses is expected to be approximately RMB 330 million to RMB 490 million, a decrease of 61% to 43% compared to the previous year.
In the announcement, TIGERMED explained that although net profit attributable to shareholders increased by 105% to 204% compared to the same period last year, this was mainly due to a significant increase in non-recurring gains and losses during the reporting period. Non-recurring gains and losses attributable to shareholders reached RMB 500 million to RMB 740 million, an increase of RMB 950 million to RMB 1.19 billion year-on-year. It was this non-recurring income exceeding RMB 500 million that ultimately enabled TIGERMED to achieve a doubling of net profit in the 2025 reporting period. In short, the company's performance growth was primarily driven by investment gains and fair value changes of financial assets, rather than its core clinical CRO business.
Although the profit growth was not driven by the main business, institutional research reports and secondary market performance reflect investor sentiment. Following the disclosure of the results forecast, Goldman Sachs issued a research report adjusting its profit forecasts for TIGERMED (03347) for 2025 to 2027, lowering the 2025 forecast by 29% while raising the 2026 and 2027 forecasts by 2% each. The target price for the H-shares was slightly increased from HK$63.4 to HK$66.4, and the target price for the A-shares (300347.SZ) was raised from RMB 78.7 to RMB 82.5, maintaining a "Buy" rating. UBS, in its report, assigned a target price of HK$57.1 and a "Buy" rating to TIGERMED (03347), stating that it would focus on signals of price recovery in new orders for 2026 and management's guidance for 2026 revenue and profit.
In the secondary market, on the day after the results forecast was released, TIGERMED's H-share price opened higher with a gap up, breaking through the previous high from January to reach HK$56.25 during the session. The day exhibited a typical pattern of rising volume and price, with the stock's trading volume reaching 7.0477 million shares, indicating strong buying interest from investors holding cash outside the market. Subsequently, the stock price oscillated with reduced volume between the middle and upper Bollinger Bands, reflecting a consensus among short-term holders within the market.
Hong Kong Stock Connect funds have been a relatively active force in TIGERMED's trading recently. Broker trading data from the past five days shows that the top five selling seats were Hongkong and Shanghai Banking Corporation, CMB International, Morgan Stanley, Merrill Lynch, and ABN AMRO, selling 1.1628 million, 422,600, 280,000, 175,700, and 108,300 shares respectively. The top five buying seats were Hong Kong Stock Connect (Shenzhen), Hong Kong Stock Connect (Shanghai), Citibank, Haitong International, and Bank of China, purchasing 1.0293 million, 588,300, 533,800, 101,800, and 101,000 shares respectively.
However, extending the timeframe to the past 20 days, the top two net sellers for TIGERMED were actually the two Hong Kong Stock Connect channels. Hong Kong Stock Connect (Shenzhen) had a net sell of 3.3184 million shares, and Hong Kong Stock Connect (Shanghai) had a net sell of 2.3335 million shares. Since last November, Hong Kong Stock Connect channels have shown a preference for right-side trading in TIGERMED. The turning point for their recent trading strategy change coincided with the day after the company's results forecast disclosure.
The logic behind this shift in trading strategy by Hong Kong Stock Connect funds is a dual confirmation of "industry trend + company performance." Research from Guotai Junan and Haitong Securities indicates that since 2025, financing in the domestic primary healthcare market has recovered first. The financing amount for Q1-Q3 2025 was approximately RMB 79.5 billion, a year-on-year increase of 22%, with capital shifting from "investing early and small" towards "investing in clinical stages and certainty." Concurrently, outbound licensing deals for domestic innovative drugs reached a new historical high, with total deal value for the year around $135.7 billion and upfront payments about $7 billion.
On one hand, as financing and licensing deal payments recover, pharmaceutical companies are increasing their investment in clinical trials again. The outsourcing demand for clinical CRO, SMO, and regulatory services is recovering simultaneously, providing a direct source of funds and project basis for the industry's improving sentiment. On the other hand, the overall regulatory approach domestically and internationally is shifting from passive approval towards emphasizing value and speed, which helps shorten the overall cycle from clinical development to market approval and accelerates the pace of clinical projects.
Data shows that the number of Investigational New Drug applications for domestic innovative drugs is continuously recovering. In 2025, the Center for Drug Evaluation accepted 1,878 IND applications, a year-on-year increase of 13.3%, with the proportion of Class 1 innovative drugs rising to 1,517 varieties. This indicates that R&D resources are concentrating from generic and low-value projects towards innovative projects with high clinical value. At the same time, review efficiency and approval rates are improving. The domestic IND approval rate for Class 1 innovative drugs was about 96.5%, and the NDA approval rate was about 86.9% during the same period.
Against the backdrop of simultaneous improvements in project numbers and approval pace, the cycle from project initiation to commencement and progression for clinical projects is shortening, forming a more stable and sustainable source of CRO orders. Furthermore, downstream market requirements for CROs are evolving as clinical trials move towards digitalization and continuity, extending beyond mere execution to include data collection, quality control, statistical analysis, and IT system capabilities. This theoretically benefits leading companies more.
This has been preliminarily reflected in TIGERMED's disclosed results forecast. The company stated in its announcement that both the number and value of new orders achieved good growth compared to the same period last year. For 2025, the company's net new orders were in the range of RMB 9.5 billion to RMB 10.5 billion, compared to net new orders of RMB 8.42 billion in the same period last year. This also reflects the advantageous aspect of TIGERMED's strategy of "using investments to support research."
Indeed, the "using investments to support research" model is not unique to TIGERMED. In recent years, as CRO industry growth has slowed and market competition intensified, more CRO companies have chosen to expand their influence through the Limited Partner model. This "using investments to support research" approach has brought new growth points for many CRO firms. However, this business model also carries significant reflexivity. When industry sentiment is rising, fair value gains from LP investments, combined with improved expectations for the core CRO business, can typically boost company net profit. Conversely, when industry sentiment declines, a downturn in the core CRO business, coupled with fair value losses from LP investments, can further impact the company's profits, thereby increasing stock volatility. In such scenarios, a strategy where secondary market investors follow the trend based on company performance—right-side trading—is generally more favorable than a "left-side accumulation" strategy.
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