Soochow Securities has issued a research report stating that, given United Lab (03933) is a vertically integrated enterprise in the penicillin antibiotic industry chain, with scale and cost advantages in intermediates, active pharmaceutical ingredients and veterinary drugs and animal health, and has already entered the endocrine/metabolic field through insulin analogues and pipelines such as UBT251, the brokerage is bullish on the resonance between the cyclical recovery of the company's core business and the realization of its innovation value, and maintains its "Buy" rating.
Key Views from Soochow Securities
2026H1 results: a decline from a high base, with the core business improving sequentially. Revenue in 2026H1 was 6.166 billion yuan (-18.0% year on year, same below), net profit attributable to shareholders was 348 million yuan (-81.6%), and gross margin was 34.4% (-17.8 percentage points). The main reasons were the high base from the 1.434 billion yuan UBT251 licensing fee in the same period last year, relatively low API prices year on year, and a foreign exchange impact of about 175 million yuan. Revenue in 2026H1 rose 8.3% from 2025H2, and net profit attributable to shareholders rose 81% sequentially, showing clear improvement in the core business.
Antibiotic core business: prices bottoming out and rebounding, downstream volume expanding. External sales revenue from intermediates and APIs in 2026H1 was 704 million yuan (-30.4%) and 2.596 billion yuan (+2.6%), respectively; the average tax-inclusive price of 6-APA recovered from about 151 yuan/kg in January to about 172 yuan/kg in June. Total sales volume of intermediates plus APIs in 2026H1 rose about 20% year on year, with penicillin API sales volume up 43% year on year and cephalosporin sales volume up 83% year on year, suggesting the cyclical turning point is approaching.
Animal health and formulation exports: new growth engines. Sales revenue from formulation products (excluding licensing) rose 8.6% year on year in 2026H1; animal health revenue was 823 million yuan (+45.8%) and may reach 1.5 billion yuan for the full year 2026; insulin analogue sales volume rose 22.8% year on year; the company's total overseas revenue was 1.336 billion yuan, accounting for 21.7%.
As prices of antibiotic intermediates and API products were still significantly lower than a year earlier, export demand for some varieties (6-APA, penicillin G potassium industrial salt, etc.) was weak, and the UBT251 out-licensing fee in the same period last year created a high base alongside foreign exchange gains and losses, the brokerage lowered United Lab's (03933) 2026-2027 revenue forecasts from 15.001 billion/16.261 billion yuan to 12.300 billion/13.101 billion yuan, and expects 2028 revenue of 14.216 billion yuan, corresponding to EPS of 0.39/0.55/0.64 yuan.
Innovation transformation: UBT251 milestones being delivered. In March 2025, UBT251 (a GLP-1/GIP/GCG triple agonist) was licensed to Novo Nordisk (with a $200 million upfront payment, up to $1.8 billion in milestones plus sales royalties); the 2026 interim results call guided to milestone revenue of about $25 million in 2026 and $70 million-$130 million in 2027; as of September 2026, the first patient had been dosed in both the China Phase III trials for overweight/obesity and type 2 diabetes; as of 2026H1, there were 23 Class 1 innovative drugs under research.
Risk warnings include volatility in intermediate/API prices, risks that innovative drug R&D and overseas progress fall short of expectations, centralized procurement price cuts and policy risks, and exchange rate fluctuation risks.
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