On March 31, following the release of its 2025 annual results, BOAN BIOTECH (06955) saw its share price hit a record low of HK$6.12 intraday. This marked a new low since the company's listing. The decline began after the stock reached an interim peak of HK$19.90 on August 8 of the previous year, initiating a downtrend that persisted for over eight months. This recent bottom extended the total price decline during this period to 69.25%.
Benefiting from a rally in the first half of the previous year, BOAN BIOTECH managed to maintain its eligibility for the Hong Kong Stock Connect program. Despite its market capitalization falling to HK$5.312 billion by the end of the last year, the company's average daily market cap during the review period for the second 2025 Stock Connect adjustment was HK$6.565 billion, just above the then exclusion threshold of HK$6.026 billion, allowing it to successfully "retain connectivity."
However, as the company's share price continued to fall, its average daily market cap during the review period dropped to HK$6.235 billion by April 30. This figure is now below the current retention threshold of HK$6.750 billion, placing the company on the "brink of exclusion" from the program.
From a technical perspective, BOAN BIOTECH's stock has been in a downward trend characterized by falling prices and shrinking trading volume since last August. After hitting a high and touching the upper Bollinger Band on August 8, the stock formed a bearish reversal candlestick pattern the following day and began a technical correction towards the lower band. For the subsequent three months, the stock price fluctuated between the middle and lower Bollinger Bands, reflecting subdued market sentiment.
To further shake out weak holders, the stock experienced a sharp rise followed by a decline on September 16, closing up over 12% for the day. This sudden surge amplified market divergence, with trading volume reaching 81.3288 million shares, which subsequently increased the concentration of shareholdings. Despite this large positive move, it failed to boost overall market sentiment. Technically, the Bollinger Bands began to noticeably contract, guiding the stock into a pattern of continued volatility and decline. The price largely moved mechanically along the middle to lower bands, trending downwards on low volume.
During this four-month period of sustained low prices, there were only four trading days where daily volume exceeded 10 million shares, indicating significantly weaker market participation. A brief attempt to challenge the upper Bollinger Band on November 27 was not supported by a noticeable increase in volume and failed to result in a decisive breakout, constituting a typical "false breakout" pattern. The stock subsequently continued its volatile descent to an intraday low on January 2 of this year.
Following January 2, the stock price attempted another rally towards the upper Bollinger Band, accompanied by a rare instance of rising price and volume on January 9. However, the quality of this rebound suggested it was merely a technical bounce from being oversold. After the January 9 rally, trading volume contracted sharply again, and the stock quickly formed a long upper shadow candlestick after touching the upper band, resuming its downward trajectory.
Starting January 14, BOAN BIOTECH's shares entered another downtrend lasting approximately two and a half months, with the persistent decline repeatedly setting new post-listing lows. This ongoing price weakness has brought the company to the edge of exclusion from the Stock Connect.
According to data, the next periodic review for the Hang Seng Index and Hong Kong Stock Connect is scheduled for June, with results announced on August 25. The review period covers July 1, 2025, to June 30, 2026. BOAN BIOTECH's current average daily market cap during this review period is HK$6.235 billion, below the retention threshold of HK$6.750 billion. With the review period ending in just two months, the company faces a critical challenge: it must significantly boost its share price to raise its average daily market cap, or it risks being removed from the Stock Connect in the upcoming adjustment.
Annual Report Shows Revenue Growth But Profit Decline: Can This Support the Share Price? The company's 2025 annual report, released on March 30, showed revenue of RMB 785 million, a year-on-year increase of 8.06%. Product sales revenue reached RMB 734 million, up 6.4% year-on-year. In terms of profitability, gross margin was 71.7%, a slight decrease of 3.0 percentage points compared to the previous year, impacted by factors including new product launches,医保 policies, and market competition. EBITDA was RMB 134 million, down 25.2% year-on-year. Although 2025 was the second consecutive year of profitability for BOAN BIOTECH, its net profit attributable to shareholders was only RMB 7 million, a sharp decrease of 90.24% year-on-year.
The company attributed this phenomenon of "revenue growth without profit growth" to the high base effect of government subsidies and BD income from the previous year fading, coupled with increased sales and marketing expenses for new products. A detailed look at expenses reveals that to promote the commercialization and volume growth of new products, BOAN BIOTECH significantly increased its market promotion efforts, leading to a sales expense ratio of 43.4%, up 4.0 percentage points year-on-year. However, the company also improved its management and R&D efficiency, with the administrative expense ratio decreasing by 1.2 percentage points to 5.2%, and the R&D expense ratio falling by 1.8 percentage points to 18.8%.
For a company at the commercialization stage, BOAN BIOTECH's cash flow performance was notable. Cash and cash equivalents reached RMB 1.130 billion, a substantial increase of 468.3% year-on-year. Meanwhile, net cash flow from operations turned positive to RMB 347 million, and the leverage ratio decreased to 28.59%. This provides important financial support for the company's future R&D and global expansion efforts.
Currently, market focus is undoubtedly on the progress of BOAN BIOTECH's innovative pipeline. According to the annual report, 2026 is expected to see密集落地 of catalysts from the commercialization of innovative drugs: Investigational New Drug (IND) applications are anticipated for three innovative drug candidates: BA1203 (a PD-1/IL-2 fusion protein), BA2201 (a TL1A/IL23 bispecific antibody), and BA1304 (an EGFR/B7H3 ADC).
Among these, BA1203 is a PD-1/IL-2 antibody-cytokine fusion protein. Beyond its highly active PD-1 antibody component, its IL-2 module employs two masking mechanisms—"cis-activation" and "tumor microenvironment-specific enzymatic cleavage activation"—to selectively release IL-2 within tumors, potentially enhancing safety. Its IND application in China is expected in the second quarter of this year. Additionally, BA2201, a bispecific antibody targeting TL1A and IL23p19, utilizes a novel 1+1 structure and long-acting Fc engineering in its design, demonstrating good drug-like properties and efficacy in preclinical studies, giving it significant potential for business development deals and possibly serving as a catalyst for a stock price rebound.
Whether these potential catalysts can materialize within the current Stock Connect review period will likely be decisive for BOAN BIOTECH's chances of retaining its eligibility. Interestingly, while the company's share price has declined this year, the proportion of shares held through the Stock Connect has increased significantly, exceeding 22% as of April 30. According to the rules, if a company is removed from the Stock Connect, mainland investors are prohibited from buying its shares and can only sell their existing holdings. This means that exclusion could not only cut off a source of liquidity but also create selling pressure from these investors. Given the current over 20% Stock Connect ownership, such selling pressure could further negatively impact the stock price if exclusion occurs.
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