Liquidity problems have emerged after 10 months of listing, can the research and development benefits drive CUTIA-B (02487) to stop falling?

After the annual stock price plummeted by 35.88% in 2025, it seems that CUTIA-B (02487) in 2026 has not yet found the key to open the door for the stock price to stop falling and rebound. It is observed that as of January 19, the Hong Kong stock price of Kodetex has risen by over 7% since the beginning of the year. However, the reason for the better growth data compared to the previous year is that on the last trading day of 2025, the company experienced a significant drop of 5.02% and closed at a low of HK$4.54. The low stock price base allowed for a better growth data at the start of 2026. However, the actual stock price of Kodetex has not broken out of the downward trend and continues to fluctuate downwards. On January 19, Kodetex announced that its heavy-duty CU-20101 (injectable type A botulinum toxin) for improving moderate to severe glabellar lines in a Phase III clinical trial in China had positive top-line results. Thanks to this positive news, the company's stock price rose during that day, leading the market to see the possibility of a stabilization in the declining trend. "Outbound" issues emerge, when will the liquidity "problem" be solved? After being removed from the Hong Kong stock connect list in March of last year, Kodetex's stock price quickly dropped to its lowest point of HK$3.64 within a month after being removed. However, after disclosing their annual report on April 22 last year, Kodetex quickly stopped falling due to the solid fundamentals shown in the financial report and, driven by factors such as market underestimation and the bullish market of Hong Kong-listed innovative drugs, experienced a wave of 2.5 times the increase in stock price over the next two months. For Hong Kong stock connect funds, unless there is a strong desire to snatch up shares, investments in listed stocks in most cases will be made through a left-hand trading strategy, i.e., "buy more as the price falls and sell more as the price rises." However, for "outbound" stocks, only one-way sell operations can be performed, so after Kodetex was removed from the list, its stock price quickly rose to a certain extent, accelerating the clearing out of Hong Kong stock connect funds. According to statistical data, one day after Kodetex confirmed to be removed from the list last year, the Hong Kong stock connect funds' shareholding proportion was 10.09%, with a corresponding shareholding quantity of 32.3194 million shares, totaling 195 million Hong Kong dollars. However, in the three-month period from March 12 to June 13 last year, there were only four trading days where the shareholding proportion of Hong Kong stock connect funds changed by 0, with the remaining trading days mostly involving reduction in holdings. In contrast, during the volatile period from June 17 to September 10, the stock price of Kodetex, the number of trading days where Hong Kong stock connect funds maintained their shareholding proportion without changing significantly increased to 28 days, with the shareholding proportion at 2.87%. Following that, Hong Kong stock connect funds for Kodetex once again conducted a new round of clearing in October and November last year, reducing shareholding proportion to 2.45% on November 11, and thereafter the onshore Hong Kong stock connect funds slowed down the pace of outflows. As of January 16, their shareholding proportion still stood at 2.29%. However, the accelerated clearing of Hong Kong stock connect funds to some extent relieved the onshore selling pressure of Kodetex but also made the worsening liquidity issue for Kodetex more apparent. From a market perspective, since Kodetex's stock price hit the upper BOLL line on September 3 last year, the sentiment of Kodetex in the downward range of stock prices has remained low, with the company's stock price mostly fluctuating in a downward trend between the lower and middle BOLL lines. In terms of trading volume, in the four and a half months from September 3 last year until now, Kodetex only had four trading days with a trading volume exceeding 1 million shares, which is in sharp contrast to its performance in the first half of 2025. Looking at the stock price trend in the first half of last year, investors can see that even though Kodetex had been removed from the list, the recovery of the Hong Kong healthcare sector, coupled with the solid fundamentals shown in the company's annual report, played a crucial role in supporting Kodetex's rapid rise in stock price and the increase in trading volume. It was learned that on April 22, 2025, Kodetex officially disclosed its annual report for 2024. The financial report showed that Kodetex's total revenue for the period increased by approximately 103% year-on-year, with a gross profit increase of about 102.0%; at the same time, the company's net loss narrowed by 77.91% year-on-year. Taking account of the financial report, the revenue growth of the company in 2024 was mainly due to the increase in sales of its hair disease and care products, as well as daily skincare products; the increase in brand line gross profit margin was benefited from the gradual maturation of the skincare brand line; and the narrowing of net losses was due to further cost reduction and efficiency improvement. In addition, the sales expectations of the company's three major prescription drugs disclosed at the time gave the market enough room for imagination, ultimately reflecting this expectation in the two-month rise in stock price after the annual report was released. So, the question is, can Kodetex's stock price replicate last year's trend in the first half of 2026 and successfully break free from the "liquidity trap"? Fundamental repair situation may be the key support for stock price On August 28, 2025, the half-year performance of Kodetex's 25H1 was officially disclosed. During the reporting period, the company's revenue decreased by 30.6% year-on-year to approximately 66.3 million yuan; the net loss was approximately 239 million yuan, an increase of about 19.1% year-on-year. The reason Kodetex faced significant challenges in performance in the first half of last year was due to the company strategically terminating its agency cooperation with the American skincare brand Oma, reallocating resources to the commercialization preparation of new products such as CU-40102 (topical finasteride spray) and CU-10201 (topical 4% minocycline foam). To this end, Kodetex also announced its intention to issue a total of 28.904 million shares for private placement, with a placement price of HK$8.40 per share, a discount of approximately 12.04% compared to the closing price of HK$9.55 per share on the previous trading day. The net proceeds from the placement were approximately 240 million Hong Kong dollars, of which 45% of the funds would be used for the marketing, channel expansion, and brand building of CU-40102 (topical finasteride spray) and CU-10201 (topical 4% minocycline foam), showing the company's efforts in commercializing these two new products. According to previous market forecasts, the first complete year revenue estimate for CU-40102 is expected to exceed a billion yuan, with sales volume peak estimates reaching 10-20 billion yuan; and the first complete year revenue estimate for CU-10201 is expected to be 50 million yuan, with sales volume peak estimates reaching 5-10 billion yuan. Among them, CU-40102 is the world's first and only topical finasteride product and has a relatively good market competition environment, which is why the market was optimistic about the commercial prospects of this product. However, at present, Kodetex is still in the early stages of commercializing these two new products, and the extent to which their commercial milestones can be reflected in the 2025 annual report remains to be seen. However, the recent positive top-line results for the Phase III clinical trial of another major product, CU-20101, released by the company, is considered a good "appetizer" for many investors. According to reports, the clinical trial results show that, in terms of efficacy, the use of facial wrinkle scoring scale (FWS) showed that efforts to treat glabellar lines met non-inferiority criteria, based on assessments by on-site researchers and participants; and further support for non-inferior conclusions based on assessments by the Independent Assessment Committee (IAC) of efforts to treat glabellar lines, showing that CU-20101 is similar in efficacy to BOTOX, achieving primary and secondary endpoints. In terms of safety, CU-20101 showed good overall safety, with no adverse events leading to early termination of the trial or death, and no treatment-related serious adverse events. The safety assessment of CU-20101 was similar to that of BOTOX, with no new safety signals detected. Furthermore, in the production process, CU-20101 will not use animal-derived materials, thereby eliminating the risk of transmissible spongiform encephalopathy (TSE) infection and related allergic reactions, and is expected to have a safety advantage. However, in the current domestic competitive landscape, there are already several approved botulinum toxin products on the market in China, including products such as Henglai from Lanzhou Biological, Botox from Elgen in the United States, Dysport from Ipsen in France, Xeomin from Shuju in South Korea, Siomay from Macchi Aesthetic in Germany, and Daxifey from Revance in the United States. Among them, as the first botulinum toxin products to enter the market, Botox and Henglai occupy the high-end and low-end markets, with market shares of approximately 50% for Botox and 30% for Henglai. As a latecomer, it is still unknown whether Kodetex's CU-20101 can capture a share in this market.