The Zhitong Finance App learned that CCB International released a research report stating that while maintaining Rongchang Biotech's (09995) “outperforming the market” rating, the target price was reduced by 47% from HK$49.3 to HK$26. The company's results for the fourth quarter of 2023 fell short of expectations, with a net loss of 520 million yuan, far short of the bank's forecast of 366 million yuan. The overall revenue for 2023 was RMB 1.08 billion, up 50% year on year, in line with the forecast.

The bank pointed out that sales growth momentum of Rongchang biological products continues, but R&D costs are rising. Rongchang Biotech's total product revenue in 2024 is expected to increase 44% year-on-year, slightly worse than 50% in the same period last year. The bank lowered Rongchang Biotech's revenue forecast for the 2023, 2024 and 2025 fiscal years by 3%, 2%, and 2%. The adjusted net loss forecast for the company for fiscal year 2023 will increase from RMB 1.3 billion to RMB 1.5 billion, from RMB 1 billion to RMB 1.3 billion in fiscal year 2024, and from RMB 334 million to RMB 610 million in fiscal year 2025.

Furthermore, there is an excess credit balance in Rongchang Biotech Debt Refinancing. The bank expects Rongchang's net debt ratio to reach 71.7% by the end of 2024 and 144.4% by the end of 2025. As of mid-January 2024, Rongchang Biotech has obtained credit lines worth RMB 4 billion from certain lenders to cover its high operating expenses, including R&D costs and capital expenses.