Shenwan Hongyuan released a research report indicating that XTALPI (02228), leveraging its core technologies of "physical computing + AI + robotics", has established a complete closed-loop for early drug discovery spanning algorithms, engines, and automated laboratories. The company's business has expanded from AI-driven drug discovery to the broader "AI4S" platform; its underlying technologies not only accelerate various stages of innovative drug development but also hold potential for migration to new materials and other fields, showcasing strong technological breadth and platform value. The firm initiates coverage with a "Buy" rating.
Shenwan Hongyuan's key viewpoints are as follows: Achieving full coverage from physical computing to intelligent automation in early drug research, the core technologies encompass physical computing, AI, and robotics. Founded by three postdoctoral physicists from the Massachusetts Institute of Technology (MIT), the company has gradually built a closed-loop for wet and dry experiments in early drug research through breakthroughs in physical algorithms (crystal structure prediction + solid-state R&D), construction of underlying physical engines (XEF high-precision force field + XEP free energy perturbation), expansion of drug modalities (small molecules + macromolecules + peptides), and in-depth development (molecular glue + robotic automated laboratories).
Revenue has maintained high and stable growth. From 2022 to H1 2025, revenues stood at 130 million yuan, 170 million yuan, 270 million yuan, and 520 million yuan respectively, with year-on-year growth rates of 112.3%, 30.8%, 52.8%, and 403.8%. Drug discovery solutions represent the core business; in H1 2025, the company secured a $5.99 billion collaboration with Dove Tree, with a recognized down payment of $51 million.
From Pharmaceutical Research to AI4S: Strong Technological Transferability and Vast Space 1) Accelerating innovative drug development by enhancing efficiency in key stages such as target discovery, hit compound screening, lead compound optimization, and preclinical research. Multiple cases have validated the actual efficiency-boosting effect of AI, with the new drug landscape gradually expanding from small molecules to macromolecules and peptides. 2) Technologically evolving from auxiliary design to generative creation, major AI-driven pharmaceutical companies each have their strengths; when evaluated by data barriers and technological breadth, XTALPI holds distinct advantages. 3) The underlying technological logic can be迁移 to new materials and other domains; considering only the two major areas of pharmaceutical research and material development for AI4S, the long-term AI service market could reach nearly $50 billion.
XTALPI also possesses both wet and dry laboratory capabilities, boasting a comprehensive layout from pharmaceuticals to AI4S. In H1 2025, the company accelerated order acquisition and achieved business breakthroughs: collaborating with Dove Tree, multiple pipelines have reached important milestones, and two co-incubated pipelines have made significant progress.
Driven by models and data, the company has broken into the chemical field: 1) Successfully developed an AI model for synthesizable prediction and reaction condition recommendation covering common reaction types, with research directions extending to cutting-edge chemical reactions; 2) Established a reaction condition recommendation and yield prediction model for condition screening in separation and purification processes, which has been successfully delivered; 3) Completed the acquisition of Liverpool ChiroChem (LLC), which holds a world-leading experimental library of chiral molecules.
Earnings Forecast: The bank projects the company will achieve revenues of 795 million yuan, 985 million yuan, and 1.421 billion yuan in 2025-2027E, with year-on-year growth rates of 198%, 24%, and 44% respectively; it also anticipates adjusted net profits attributable to the parent of -23 million yuan, 75 million yuan, and 309 million yuan for the same period. The current stock price corresponds to price-to-sales (PS) ratios of 47x/38x/26x for 2025-2027. Referencing the average PS of comparable companies at 49x for 2026, the bank assigns a target PS of 49x for 2026, implying a target market capitalization of 48.7 billion yuan.
Risk Warnings: New technologies may develop slower than expected, or the penetration rate of new technologies may rise less than anticipated; the profitability of new products could fall short of expectations.
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