Key takeaway

The company's revenue grew 40.63% YoY in 2025, achieving simultaneous improvement in revenue, profit, and cash flow. Driven by model animals, pharmacology and pharmacodynamics services, and milestone revenue, 1Q26 continued high growth, with operating revenue reaching RMB433mn, up 73.68% YoY, further confirming the trend of scaled profitability. The company uses gene editing technology as its underlying platform, forming two major business lines: BioMice model animals and preclinical services, and antibody molecule transfer. Preclinical research benefits from rising demand for humanized target models and overseas client expansion, with orders and revenue maintaining a rapid growth trend. Antibody sequence licensing, supported by the "Thousand Mice, Ten Thousand Antibodies" antibody sequence library, continues to gain client recognition. In 2026, the commissioning of the company's new animal facility in Haimen is expected to gradually ease front-end capacity bottlenecks. The company will continue investing in AI to empower the antibody molecule platform business, promoting external licensing of molecular sequences. Both front-end and back-end are expected to maintain rapid growth.

Event

The company released its 2025 annual report and 2026 first quarter report.

In 2025, the company achieved operating revenue of RMB1.379bn, up 40.63% YoY; net profit attributable to shareholders of the parent company was RMB173mn, up 416.37% YoY; recurring net profit attributable to shareholders of the parent company was RMB116mn, up 405.39% YoY. In 1Q26, the company achieved operating revenue of RMB433mn, up 73.68% YoY; net profit attributable to shareholders of the parent company was RMB104mn, and recurring net profit attributable to shareholders of the parent company was RMB91mn; net cash flow from operating activities was RMB145mn, up 325.80% YoY.

Risks:

Risk of antibody molecule licensing and milestone realization falling short of expectations: The company's RenBiologics business revenue is tied to the pace of molecule transfers, platform licensing, and collaboration project progress. If clients adjust their R&D strategies, clinical advancement slows, or transaction timelines fall short of expectations, the company's revenue and profit flexibility will be affected. Risk of animal model and pharmacology/pharmacodynamics service growth falling short of expectations: If the global innovative drug financing environment fluctuates or MNCs and biotechs tighten R&D budgets, demand for the company's animal model and pharmacodynamics services may be affected. Risk of capacity expansion and utilization falling short of expectations: If the commissioning and ramp-up schedule of the Haimen new animal facility or order matching fall short of expectations, revenue recognition and margin performance may be affected. Overseas business expansion risk: The company has a relatively high proportion of overseas revenue. If adverse changes occur in overseas regulations, geopolitics, cross-border delivery, or the exchange rate environment, overseas order acquisition and profit performance may be affected. Risk of intensifying market competition: If domestic and international competitors accelerate their catch-up in model resources, delivery lead times, pricing, or antibody discovery platform capabilities, it may put pressure on the company's business expansion and gross margin. Risk of uncertainty in new drug R&D: There is uncertainty in the partnered antibody molecules' subsequent entry into clinical trials, validation, and commercialization. Project failure, termination, or delay may all affect milestone revenue and long-term sales royalties.

Sensitivity analysis: Currently, the company assumes model animal sales will grow by 48%/40%/30% in 2026-2028, preclinical pharmacology and pharmacodynamics services will grow by 40%/38%/33% in 2026-2028, and antibody development services will grow by 45%/40%/35% in 2026-2028. If the growth rate of preclinical services declines by 10 pcts and the growth rate of antibody development services declines by 5 pcts, the company's corresponding revenue for 2026-2028 would be RMB1.85bn, RMB2.40bn, and RMB2.95bn, representing YoY growth of 34%, 30%, and 23%, with net profit attributable to shareholders of the parent company of RMB320mn, RMB490mn, and RMB680mn, representing YoY growth of 82%, 56%, and 38%.