Hua Medicine (2552) H2 2025 earnings summary

Executive summary

• Achieved record profitability in 2025, driven by strong dorzagliatin sales, full in-house commercialization, and a one-time release of contract liability after ending the Bayer partnership.

• Revenue surged 93% year-over-year to RMB 492.9 million, with over 4 million packs sold and gross margin improving.

• Built a robust in-house sales and marketing team, expanding dorzagliatin's reach to over 500,000 patients through 3,000+ channels.

• Advanced global footprint with dorzagliatin registration and approval in Hong Kong, ongoing efforts in Macau, Seoul, Southeast Asia, and US clinical trials.

• Launched an AI-driven digital platform and expanded R&D for new indications and combination therapies.

Financial highlights

• Revenue grew 93% year-over-year to RMB 492.9 million, with gross profit margin improving by 8.2 percentage points to 59.9%.

• Selling expense ratio declined to 33.6%, and R&D expense ratio dropped to 29.5% in 2025.

• Achieved first full-year net profit of RMB 1.11 billion, supported by a one-time release of RMB 1.2 billion in deferred income from the Bayer agreement.

• Cash position at year-end 2025 was RMB 1.09 billion, supporting ongoing expansion and R&D.

• EPS: Basic RMB 1.12, Diluted RMB 1.10.

Outlook and guidance

• Revenue targets set at RMB 900 million for 2026, RMB 1.35 billion for 2027, and RMB 1.8 billion for 2028, with stock option vesting tied to these targets.

• Gross profit margin expected to reach 70%-75% in the next 1-2 years.

• Selling expenses projected to stabilize around 33%-35% of sales, with R&D at ~30% and administration at 20%-25%.

• NDA submission for dorzagliatin and metformin FDC targeted for 2027; US Phase Ib data readout for 2nd generation GKA expected mid-2026.

• Company expects to become profitable by 2027.