Goldman Sachs: Give a "buy" rating to Pharmaron Beijing (03759) with a target price of HK$30.7.

Goldman Sachs Group, Inc. released a research report stating that Pharmaron Beijing (03759) has reached a cooperation agreement with Eli Lilly (LLY.US) to support the local supply of Orforglipron in China. Eli Lilly is expected to invest $200 million in Pharmaron Beijing to support its technological capabilities, and as the project progresses, there is potential to further expand the scope of cooperation. Pharmaron Beijing is rated as a "buy" in the Hong Kong stock market, with a target price of 30.7 Hong Kong dollars; in the A-share market, Pharmaron Beijing (300759.SZ) is rated as "neutral" with a target price of 38 yuan. At the same time, Eli Lilly plans to invest a total of $3 billion over the next ten years, expanding its supply chain capacity in China with multiple local companies, with the goal of establishing a localized manufacturing and supply system for oral solid preparations, focusing especially on building production capacity for Orforglipron. Eli Lilly China has submitted an application for the market approval of Orforglipron for the treatment of type 2 diabetes and obesity to the National Medical Products Administration by the end of 2025. The report believes that Lilly's commitment to local capital expenditure reflects its confidence in the long-term growth potential of the obesity drug market in China. In terms of the fundamental impact on Pharmaron Beijing, a more substantial assessment of its profitability contribution and strategic significance will depend on further disclosures. The management is expected to provide more details, including the cooperation model, potential order size, and commercial trajectory of Orforglipron after approval in China, at an upcoming earnings conference call. Nevertheless, the report anticipates a positive market reaction for Pharmaron Beijing, as the partnership emphasizes Lilly's recognition of Pharmaron Beijing as a qualified partner within the local GLP-1 supply chain.