China Post Securities: First Give UNITED LAB (03933) a "Buy" Rating, with Outstanding Performance in Insulin Preparation Business.

China Post Securities released a research report stating that UNITED LAB (03933) is one of the leading comprehensive pharmaceutical companies, with business extended to biopharmaceuticals and animal health fields, and research and development entering a harvest period. It is expected that the company's revenue for 2025/2026/2027 will be 13.42/12.65/13.84 billion yuan, with year-on-year growth rates of -2.5%/-5.7%/9.4%, and attributable net profit of 2.36/2.02/2.41 billion yuan, with corresponding PE (exchange rate at 1HKD=0.92RMB) of 10/12/10 times. This is the first coverage, with a "buy" rating. The main points of China Post Securities are as follows: Event The company announced its performance for the first half of 2025, achieving revenue of 7.52 billion yuan (+4.8% year-on-year growth rate, the same below), EBITDA of 2.75 billion yuan (+23.3%), and attributable net profit of 1.89 billion yuan (+27.0%). Demand impact on active pharmaceutical ingredients and intermediates business, impressive performance in insulin formulation business For the first half of 2025, the external income of the intermediate business was 1.01 billion yuan (-23.1%), with a division profit of 0.63 billion yuan (including inter-division sales, the same below), corresponding to a profit margin of 27.5% (-7.2 percentage points); the external income of the raw material business was 2.53 billion yuan (-27.0%), with a division profit of 0.25 billion yuan, corresponding to a profit margin of 27.5% (-4.9 percentage points); the external income of the formulation business was 2.54 billion yuan (+6.1%), with a division profit of 0.16 billion yuan, corresponding to a profit margin of 6.1% (-4.0 percentage points); license fee income was 1.43 billion yuan (mainly from the first payment of UBT251 authorization agreement with Novo Nordisk). In the formulation business, revenue from human antibiotic formulation products in the first half of 2025 was 0.89 billion yuan (-12.1%), expected to be mainly affected by centralized procurement and demand decline; revenue from animal health business was 0.56 billion yuan (-15.9%), with expected rapid growth in the future with the construction of new bases and overseas registrations; revenue from insulin formulation was 0.96 billion yuan (+74.5%), with second-generation insulin at 0.46 billion yuan (+110.2%), regular level insulin at 0.29 billion yuan (+33.7%), and Lenten insulin at 0.19 billion yuan (+74.0%), with sales growth of insulin analogs at 90.4%, expected to benefit mainly from the contract renewal of domestic insulin collection by the company's full line of products in Class A bidding and procurement orders from the Brazilian Ministry of Health. R&D Focus on endocrinology/metabolism and self-immune areas, gradually entering a harvest period since 2026 The company's R&D investment in the first half of 2025 was 0.55 billion yuan (+14.9%), with Liraglutide having been approved for domestic listing in March; the overseas rights to GLP-1/GIP/GCG three-target new drug UBT251 have been licensed to Novo Nordisk, with Phase II trials for weight loss and blood sugar reduction indications already completed domestically, and Phase II trials for MAFLD and CKD indications having initiated at the first center, with previous Phase Ib data showing an average weight loss of 16.6% after 12 weeks of subcutaneous QW dosing corrected for placebo; the neuropeptide Y2 receptor agonist UBT37034 obtained clinical clearance for weight loss indications in the United States in July, with significant weight loss effects demonstrated in animal trials when used in combination; the small molecule GLP-1 drug UBT48128 is expected to submit an IND application in China and the United States in 2026, with preclinical data showing superior weight loss effects to Eli Lilly's Orforglipron. The company has a rich pipeline of research and development, with an expected total of 6 new products or indications approved for listing in 2026 and 2027, and more products expected to be approved in the following years. Risk factors: Sales performance below expectations; R&D progress of new drugs below expectations; competition pressure exceeding expectations; geopolitical risks.