GLMS Securities has published a research report initiating coverage on Biocytogen (02315) with a "Recommend" rating, noting that the company's three major business segments are thriving in a favorable industry climate with robust revenue growth. As the "Thousand Mice Ten Thousand Antibodies" plan achieves phased results and large-scale R&D investments near completion, the raised capital is expected to significantly alleviate financial expenses. The preclinical products and services segment, the cornerstone business, is experiencing rapid growth, while the antibody platform, the high-flexibility business, demonstrates strong growth momentum with accelerated overseas penetration, contributing 67.9% of total revenue in H1 2025. The number and proportion of global top-20 cooperative clients continue to increase, reflecting a high-quality client base. The main viewpoints of GLMS Securities are as follows: The humanized mouse model segment dominates with a rich portfolio of targets and strains, achieving comprehensive penetration across Europe, America, and Asia-Pacific with a high overseas revenue share; this high-growth segment is the core profit contributor. The company possesses over 1,700 types of target-humanized mouse strains, with sales and licensing of these models generating revenue of RMB 257 million in H1 2025, accounting for 94% of the segment's revenue. The sales CAGR for animal models from 2022 to 2024 was 51.6%, indicating rapid volume expansion and a continuously improving client repurchase rate. In 2024, overseas sales accounted for 56.4% of the animal model revenue, with the mature operations of the US subsidiary facilitating rapid order acquisition; current overseas revenue primarily originates from developed regions like the US, Europe, Japan, and South Korea, boasting favorable profitability levels. The preclinical CRO services, an extension of the animal model business, derive 79% of their revenue from overseas; with the trend of recovering investment and financing, this segment's strong growth is highly certain. The company's pharmacology and efficacy teams are located in Beijing, Haimen, and the US, capable of evaluating the efficacy of various treatment modalities including monoclonal antibodies, bispecific antibodies, ADCs, small molecules, CAR-T, and oncolytic viruses. By H1 2025, the company had completed over 6,350 drug evaluation projects for approximately 950 global partners. Biocytogen holds significant advantages over other CRO enterprises, offering integrated services encompassing animal models, understanding of target mechanisms, and accurate assessment of market demand. In H1 2025, this segment generated revenue of RMB 155 million, a surge of over 90% year-on-year, primarily driven by a substantial increase in client numbers due to positive industry trends. In 2024, overseas revenue constituted 79.4% of the preclinical pharmacology and efficacy evaluation business; with the commencement of overseas interest rate cut cycles and the recovery of investment and financing, the company's preclinical CRO business is poised to sustain its high-growth trajectory. The antibody molecule out-licensing model, structured with upfront payments, milestone payments, and sales royalties, generates revenue that escalates in a step-function manner as the pipeline advances, unlocking substantial growth potential. The vast "antibody library" with diverse epitopes, developed through the "Thousand Mice Ten Thousand Antibodies" plan, can significantly reduce pharmaceutical companies' R&D time and uncertainty, positioning the company as a global hub for novel drug discovery. By H1 2025, the company had signed a total of 61 out-licensing/co-development projects, all with renowned domestic and international pharmaceutical companies, including Merck KGaA (Germany), Gilead Sciences, IDEAYA Biosciences, BeiGene, Johnson & Johnson, Xencor, ADC Therapeutics, Hansoh Pharma, and Chia Tai Tianqing. The revenue CAGR for this segment from 2022 to 2024 was 58.3%; the antibody platform's business model ensures long-term revenue flexibility, indicating a promising future. Risk factors include overseas operational risks, potential underperformance in antibody development, and risks associated with the iteration of animal model strains.
Comments