Building a leading competitive advantage in the "Nephrology Flagship" sector, valuation restructuring of CONSUN PHARMA (01681) is underway.

On April 21st, CONSUN PHARMA (01681) held a celebration ceremony and investor exchange meeting in Shenzhen for the Hong Kong stock connect targets. During this event, the Chairman of the Board and President An Meng, along with several core executives, shared the company's business performance and strategic planning, and engaged in in-depth discussions with investors about the company's future growth potential. Undervalued leader in the nephrology sector, "connect" brings incremental funds As CONSUN PHARMA enters its thirteenth year of development since its IPO, the market is focusing on the new vitality of this old pharmaceutical company. On March 9th, according to the adjustment notice for the Hong Kong stock connect targets, 42 companies were newly added to the list, including CONSUN PHARMA. Since joining the connect, as of April 29th, southbound funds have held over 22 million shares of the company. However, the company's PE (TTM) valuation is only 11.21 times, significantly lower than the industry average PE of 19.29 times. It is evident that there is still a significant gap in recognition and valuation of CONSUN PHARMA by the current capital market. From a fundamental perspective, benefiting from the boost of its core product, Urea Clear Granules, and continuous efforts in various specialties, the company is expected to achieve a revenue of 3.42 billion yuan by 2025, a year-on-year increase of 15.2%, and a net profit increase of 18.4% to reach 1.08 billion yuan. The impressive performance is one of the core reasons why CONSUN PHARMA is attracting funds through the Hong Kong stock connect. In terms of profitability, in 2025, the company achieved a gross profit margin of approximately 78.0%, a net profit margin of 31.5%, and an ROE as high as 25.0%. Compared with peers in the A-share pharmaceutical industry and the Hong Kong Chinese medicine sector, CONSUN PHARMA's key indicators are significantly higher than the industry median level, and the company's ROE is also far above the industry average. (Note: The Hong Kong Chinese medicine refers to the Hithink RoyalFlush Information Network's industry secondary components of Chinese medicine, and the A-share Chinese medicine refers to the Shenwan Industry Secondary Components of Chinese Medicine. The above data is from listed companies that have disclosed their annual reports by the end of April 30th.) According to the financial report, in 2025, the company achieved operating cash flow of 1.21 billion yuan, a year-on-year increase of 11.5%. The year-end cash and cash equivalents were approximately 4.38 billion yuan, accounting for over 90% of net assets, laying a solid foundation for long-term value development with ample cash flow. It is worth noting that the company has maintained a generous dividend policy since its listing, with cumulative dividends exceeding 3.3 billion Hong Kong dollars, and the annual dividend payout ratio has continuously increased from 30% and reached over 50% in 2025. According to the management, the company's ample cash reserves will support potential investments, mergers and acquisitions, or business development, and will continue to increase research and development innovation investment in the future. As of the close on April 29th, CONSUN PHARMA's total market value was approximately 13.456 billion Hong Kong dollars (approximately 11.783 billion yuan). After deducting cash, this market value essentially only reflects the cash flow value of its flagship product, while the potential of its products and pipeline are in a "zero valuation" state, indicating that there is still significant room for the stock price to rise. Building a nephrology flagship, promising future growth As the leading enterprise in the domestic nephrology field, CONSUN PHARMA showcased a comprehensive development blueprint during the event to "build a nephrology flagship and become a leading first-class pharmaceutical company in multiple specialties". With impressive financial data, clear product layout, forward-looking research and development innovation, and steady internationalization pace, the company outlined a clear path of high-quality development. Nephrology is CONSUN PHARMA's core business, and in 2025, the company achieved sales revenue of 2.4 billion yuan, a 20.3% year-on-year growth, firmly establishing its position as a leader in the Chinese kidney disease market, making its future development one of the most hot topics of attention. During the event, the company forecasted that the sales of its core nephrology medicines, Urea Clear Granules and Kidney Benefiting Dampness-clearing Granules, will reach 3.5 billion yuan in the future, with the potential to surpass 5 billion in the long term. Additionally, products like Rosuvastatin Capsules and Englitazone Tablets have been successively approved for market launch, building a comprehensive product matrix of Chinese and Western medicines in nephrology. Furthermore, with the introduction of in-hospital formulations, the company successfully introduced "Astragalus Arrow Granules" for the treatment of diabetic nephropathy from the China-Japan Friendship Hospital, and "White Flower Purple Lotus Granules" for the treatment of lupus nephritis from the First Affiliated Hospital of Sun Yat-sen University, enriching the nephrology product pipeline. In terms of innovative chemical drugs, CONSUN PHARMA is strategically positioning high-end innovative drug pipelines in nephrology, with clinical research on SK-08 and SK-09 currently underway. It is anticipated that CONSUN PHARMA's investments in traditional Chinese medicine in-hospital formulations and nephrology innovative chemical drugs will nurture new flagship varieties in the future. On the business expansion front, the company revealed that it has established a professional BD center, with team members having backgrounds in multinational pharmaceutical companies and top consulting firms. The company has utilized AI to establish a BD database and actively communicates with global pharmaceutical companies, with multiple high-quality projects under negotiation. In the future, it will enrich its pipeline quickly through a combination of self-research and introduction, to create a comprehensive Chinese and Western combined nephrology treatment solution. From the perspective of risk-return ratio, CONSUN PHARMA has a strong downside safety cushion and high upside elasticity. In the short term, the steady sales of its core products and the strong cash flow brought by subsequent volume expansion have built a solid valuation base. However, the current valuation is seriously misaligned with its leading position and growth potential. Looking ahead, the company will continue to lead the nephrology track and is now at a critical point of revaluing from a domestic leading company to a global nephrology pharmaceutical company. As the company's strategies continue to be implemented, global capital may systematically revalue its value, and it is expected to see the "Davis double hit" of performance and valuation in the future.