"Science and Technology Innovation Board Daily" reported on December 2nd (Reporter Zheng Bingxun): "The company achieved stable growth in new signed orders in the first half of the year. Currently, there are plenty of orders on hand, providing solid support for the company's future performance development."

During the performance briefing for the third quarter of 2024 held today, Chairman Li Qian of Sunshine Pharmaceuticals (688621.SH) explained that the growth in revenue for the first three quarters mainly came from the contribution of new signed orders in the first half of the year.

In the first three quarters of this year, Sunshine Pharmaceuticals achieved a revenue of 0.917 billion yuan, an increase of 32.47% year-on-year, and a net income attributable to the parent company of 0.208 billion yuan, an increase of 21.40% year-on-year.

Li Qian further revealed that from the situation of new orders in the first half of the year, the proportion of innovative drug services is increasing. In particular, the revenue from innovative drug clinical services has grown rapidly. The revenue from clinical trials and bioanalytical services in the first half of the year reached 0.217 billion yuan, accounting for nearly 40% of the overall revenue.

Data shows that Sunshine Pharmaceuticals is a comprehensive preclinical and clinical drug development services CRO, with main business covering integrated research and development services for innovative drug development, generic drug development, and consistency evaluation. The services mainly include drug discovery, pharmacology and pharmacodynamics, pharmaceutical research, clinical research, and bioanalysis.

It should be pointed out that in the intensified competition in the domestic CRO industry, Sunshine Pharmaceuticals' overall profit capability has declined. In the first three quarters of this year, the gross profit was 0.478 billion yuan, with a gross margin of 52.15%, a decrease of 4.53 percentage points and 3.84 percentage points compared to the full year of 2023 and the first half of 2024.

However, Li Qian also revealed that compared to the past, the competitive environment in the Chinese CRO industry has eased, but the concentration is increasing. Due to policies such as consistency evaluation, medical insurance reimbursement, and volume-based procurement, small enterprises are facing significant market survival pressure and gradually exiting the competition.

"At the same time, as the aging of the Chinese population intensifies and the number of cases accepted by the National Medical Products Administration's Drug Evaluation Center increases, the market demand continues to grow, injecting sustained vitality into the CRO industry," Li Qian said.

Li Qian stated that in the face of the current industry competition, Yangguang Nuoye is increasing its research and development investment, developing new products with independent intellectual property rights. In the first three quarters of 2024, Yangguang Nuoye's total R&D investment was 0.12 billion yuan, a year-on-year increase of 43.76%, accounting for 13.04% of revenue, an increase of 1.03 percentage points year-on-year.

"Science and Technology Innovation Board Daily" journalists found that Yangguang Nuoye established a holding subsidiary in June this year, further expanding the CRO business from the human medicine field to the animal medicine field, seeking new growth points for performance. Li Qian revealed that Yangguang Nuoye has already signed service orders with many large animal pharmaceutical companies such as Zhejiang Anglikang Pharmaceutical and Shandong Deqing Pharmaceutical. "The company has initiated research on more than 30 varieties, and it is expected that these products will bring stable business income to the company."

According to the "2023-2024 China Pet Industry White Paper (Consumer Report)", the scale of urban pet (dog and cat) consumption market in 2023 was 279.3 billion yuan, an increase of 3.2% compared to 2022. By 2023, the scale of China's pet pharmaceutical market had reached 27.3 billion yuan, and the number of pet cats and dogs is also growing rapidly.

According to the China Animal Husbandry Association's "Animal Medicine Industry Development Report" statistics, China's animal medicine market sales have increased from 46.61 billion yuan in 2018 to 67.345 billion yuan in 2022, with a compound annual growth rate of 10.06%. During this period, 355 domestically approved new animal medicines, with over 70 new animal drugs approved each year.