Luye Pharma Group (2186) H1 2026 earnings summary

Executive summary

• Revenue for H1 2026 declined by 5.6% year-over-year to RMB3,002.1 million, mainly due to lower sales of product know-how.

• Net profit increased by 6.5% to RMB380.8 million, with profit attributable to shareholders up 24.8% to RMB390.5 million, reflecting improved operational efficiency and product mix.

• EBITDA rose 3.9% to RMB1,251.2 million, and basic EPS was RMB9.78 cents.

• No interim dividend was declared for the period.

Financial highlights

• Gross profit decreased by 11.8% to RMB1,902.3 million, with gross margin at 63.4%.

• Other income and gains surged 130.8% to RMB456.6 million, mainly from fair value changes in financial instruments and exchangeable preference shares.

• Selling and distribution expenses fell 21.5% to RMB800.2 million, while administrative expenses rose 3% to RMB325.0 million.

• Other expenses increased 86.8% to RMB397.9 million, driven by higher R&D costs and losses on convertible bonds.

• Finance costs decreased by 10.1% to RMB304.3 million.

• Effective tax rate increased to 26.1% from 21.9%.

Outlook and guidance

• Anticipates US FDA approval for denosumab injections (BA6101, BA1102) in H1 2027 and UK launches in H2 2026.

• NDA for Ruoxinlin (GAD indication) in China expected approval in H1 2027.

• Multiple clinical trial milestones and regulatory submissions expected in the next 12–18 months, including key data readouts in 2027.

• Focus on rapid commercialization of new products and expansion in high-margin international markets.

• Ongoing cost optimization and product mix improvements expected to drive sustained profit growth.