The Zhitong Finance App learned that Bank of America Securities released a research report saying that Zhongsheng Pharmaceuticals (01177)'s revenue for the first half of the year rose 10.6% year on year to 19.44 billion yuan (same below), driven by the growth of innovative drugs and external licensing; total revenue from innovative drugs and licensing increased 44.3% year over year to 8.79 billion yuan, accounting for 45.2% of revenue from 34.7% in the first half of last year. Bank of America Securities raised the target price from HK$6.2 to HK$7.1, reaffirming the “buy” rating.

The bank pointed out that in the first half of the year, Zhongsheng Pharmaceutical's gross profit rose 11.4% year on year to 16.15 billion yuan, and gross margin increased 0.6 percentage points to 83%; sales and distribution expenses fell 18.4% year on year to 5.26 billion yuan, administrative expenses fell 11.3% to 969 million yuan, R&D expenses fell 3.4% year on year to 3.08 billion yuan, and core profit rose 8.1% year on year to 3.34 billion yuan; if Kexing Life Science dividend revenue was excluded, core profit surged 92.3% year over year 3.34 billion yuan, reflecting a significant increase in core profitability.

The bank predicted the company's net profit due in 2026 of about 5.1 billion yuan (previously 4 billion yuan), and raised its net profit forecast for each year from 2026 to 2028 by 28.2%, 52.6% and 55.9%, respectively, to 5.13 billion yuan, 6.092 billion yuan and 6.853 billion yuan, respectively.

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