Zhongtai Securities: Strategically optimistic about the pharmaceutical raw materials sector

According to the research report of Zhongtai Securities, the strategic outlook for the raw materials sector is positive: innovative drugs such as small nucleic acids, peptides, and ADC toxins are continuously catalyzing the industry chain. With the catalysis of early clinical progress and smooth market introduction, the momentum is strengthening again. Companies with leading technology, production capacity, and strong business certainty such as Lianhua Technology, Aurisco, Jiuzhou Pharmaceutical, Nordson Bio, Tianyu Shares, and Meinuo Hua are particularly favored. The fundamentals are turning around. Most companies in the sector are currently at the bottom of existing businesses and entering a turning point interval where incremental businesses are expected to exert power. Seize the turning point rhythm. Companies like Prorofe Pharmaceutical, Stilwell, Tonghe Pharmaceutical, and Aoxiang Pharmaceutical are expected to perform well. Price improvement is expected. After 4-5 years of price decline and industry consolidation in the raw materials/intermediates industry, with the rise in commodity prices and front-end chemical prices, price improvement is expected. The prices of most API products are at historically low levels, with extremely limited profit margins, low likelihood of decline, and a significant stable bottom-building trend.