Tiger Pharmaceuticals: China's leading clinical CRO enterprise, rapid expansion driven by integration+internationalization strategy.

Since its establishment in 2004, the company has continued to be deeply involved in the field of clinical CRO, cultivating two major segments: clinical trial technical services (CTS) and clinical trial related services and laboratory services (CRLS), to provide full-process, one-stop new drug development solutions. The company has a professional management and technical team, persists in international expansion, and the main business grows steadily.

Clinical trial activities in China remain active, and the clinical CRO industry continues to grow by picking up innovative policies.

Looking at demand, global biomedical investment and financing has bottomed out and the trend is picking up in demand for innovation. High-quality innovative drugs in China have been recognized globally, clinical trial activities in China are still strong, and demand for CROs will rise steadily. In terms of supply, the clinical CRO market continues to expand and the penetration rate continues to grow. In the future, China's clinical CRO market concentration will continue to increase, the head-scale effect will gradually become prominent, and leading companies such as Tiger will continue to increase the international competitiveness and market share of clinical CRO services. On the policy side, the country attaches great importance to the development of the innovative pharmaceutical industry. Pharmaceutical policies are recovering marginally, supporting the high-quality development of innovative drugs throughout the entire chain from R&D, approval, admission, and payment, and local pharmaceutical industry funds have also been established and invested one after another, driving the recovery of domestic biomedical investment and financing and demand.

Consolidate the leading position in China, actively expand overseas markets, and ensure service quality and profitability with an efficient management system. 1) Deeply cultivate core clinical CRO services and empower customer projects with high quality. The company provides full-process clinical research and development solutions for innovative drugs and innovative devices. The number of clinical trial projects at home and abroad is growing rapidly, and businesses such as registration services, medical writing, medical translation and pharmacovigilance continue to develop, continuously improving full-chain service capabilities.

2) Coordinate the efficient promotion of clinical trials with full chain service capabilities around clinical trial layout. The company's digital business is developing rapidly, and overseas BD and domestic services continue to sink; SMO services cover a wide range of clinical trial centers in China, and the number of ongoing projects is growing rapidly; Fangda laboratory testing and drug discovery and development are two-wheel drive to build global laboratories to empower customers, and revenue growth is expected to recover after production capacity climbs. 3) Internal construction+external merger and acquisition layout global service network, professional team and delivery quality are highly recognized by global customers. The company cooperates with more than 1,300 domestic clinical trial institutions, and the service network covers most key cities in China; at the same time, it actively participates in global clinical research, expands overseas operation teams and branches, and continues to strengthen global service capabilities.

The company has established a team of highly qualified and specialized employees, with strong profit-side adjustment capabilities under the asset-light operating model. Ongoing orders are steadily improving, and high-quality and diversified customer orders drive long-term performance growth.

Investment advice: The company is a leading clinical CRO outsourcing enterprise in China. While maintaining a leading domestic market share, the company accelerates the development of overseas markets. As the service layout in all fields deepens, business synergy continues to be reflected. We expect the company to achieve revenue of 8.283/9.636/11.288 billion yuan in 2024-2026, with a year-on-year increase of 12.2%/16.3%/17.1%, respectively, and net profit of 2.23/2.603/3.097 billion yuan, up 10.1%/16.7%/19.0% year-on-year respectively. The corresponding PE is 20/17/14 times, covered for the first time, and given a “recommended” rating.

Risk warning: risk of declining demand, risk of overseas policy, risk of business expansion, risk of technological iteration, risk of changes in the industry investment and financing environment.