Zhongjin: Kanglong Huacheng's main business continues to improve, maintaining the rating of "outperforming the industry" for A/H shares.

CICC research report pointed out that Kanglong Huacheng announced a 13-16% year-on-year increase in revenue for 1H25, and the performance forecast meets our expectations. The company's revenue maintains a good growth trend, with both year-on-year and quarter-on-quarter improvement in profitability, and its main business continues to improve. Synergy continues to play out, and we look forward to the realization of CDMO's commercialization capabilities in the later stage. The company adheres to technology-driven strategies and is building a one-stop platform at the forefront of drug research and development. On July 9, 2025, the company signed a comprehensive strategic cooperation agreement with Zhejiang University to jointly establish the "Artificial Intelligence Life Science Joint Research and Development Center." We maintain our profit forecasts for 2025 and 2026 unchanged. The current A-share price corresponds to a 21.6 times/19.8 times price-earnings ratio for 2025/2026, while the H-share price corresponds to a 14.5 times/13.1 times price-earnings ratio for 2025/2026. We maintain a "Outperform Industry" rating for A/H shares.