Key takeaway

In 1H26, the company generated revenue of RMB7.595bn and Non-IFRS adjusted net profit attributable to shareholders of the parent company of RMB909mn. Revenue and adjusted profit growth both accelerated, while profitability continued to improve. The company further raised its full-year revenue growth guidance to 15%-20%. Revenue and orders from laboratory services maintained steady growth. As projects in the CDMO backlog advanced, CDMO revenue grew 32.8% YoY in 1H26, while new orders increased by more than 50%. The gross margin of the clinical trial segment stabilized and recovered. With more CDMO projects scheduled for delivery in 2H26, latestage projects transitioning to commercialization, and new capacity gradually coming online, the company’s revenue mix and profit margins are expected to continue improving.

Event

PHARMARON releases 1H26 results

In 1H26, the company generated operating revenue of RMB7.595bn, up 17.9% YoY. Net profit attributable to shareholders of the parent company reached RMB750mn, up 7.0% YoY. Non-IFRS adjusted net profit attributable to shareholders of the parent company reached RMB909mn, up 20.3% YoY. New orders increased by more than 30% YoY, while revenue from the top 20 pharmaceutical companies grew 32.0% YoY. The company raised its full-year 2026 revenue growth target to 15%-20%.

In 2Q26, the company generated revenue of RMB4.017bn, up 20.2% YoY and 12.3% QoQ. Net profit attributable to shareholders of the parent company reached RMB415mn, up 4.8% YoY and 23.7% QoQ. Adjusted net profit attributable to shareholders of the parent company reached RMB503mn, up 23.8% YoY.

Risks:

Risk of weaker-than-expected industry demand recovery: The global biomedical investment and financing environment remains uncertain. If financing continues to be sluggish or large pharmaceutical companies shrink their R&D budgets, it may lead to reduced customer orders or delayed projects, thereby affecting the company's revenue growth.

Risk of commercial project ramp-up falling short of expectations: Although the company's first API project for the US market has been approved, the commercial production ramp-up is affected by multiple factors such as customer terminal sales and supply chain stability. If the ramp-up pace is slower than expected, it will adversely affect the revenue and gross margin improvement of the CDMO segment.

Geopolitical and trade policy risks: The company's overseas revenue accounts for over 80%. If any of the following situations occur—such as significant changes in laws, regulations, industrial policies, or political and economic conditions in countries and regions where the company operates globally, or disruptions caused by unforeseen factors such as geopolitical tensions, war, trade sanctions, or other force majeure events—there could be potential adverse impacts on the company’s ability to conduct and sustain its international business operations.

Exchange rate fluctuation risk: The company's revenue is mainly denominated in foreign currencies such as USD and EUR, while costs are mainly denominated in RMB. RMB appreciation will have a negative impact on revenue and gross margin. In 2025, the company has carried out hedging operations such as forward foreign exchange settlement and sales, but it still cannot completely avoid the risk of exchange rate fluctuations.

Merger and acquisition integration and goodwill impairment risks: The company has completed multiple acquisitions in recent years, including Haixin Zhihui and Biortus. If the operation of the acquired targets falls short of expectations, it may face the risk of goodwill impairment, which will in turn affect the current profit.