China Biopharmaceutical (01177) Interim Report Observation: All in AI and Globalization Dual Engine Launched

For a traditional pharmaceutical company that already has a huge commercialization scale, the real difficulty has never been to increase revenue, but to find a source for the next round of growth.

China Biopharmaceutical (01177) is entering such a critical phase. In the past few years, the company's innovative business is entering a period of concentrated cashing in on the expansion of innovative drug pipelines by continuing to increase investment in R&D; by the first half of 2026, with the approval of innovative products such as lovaxitinib, peleganam, and naltimidine, and the further expansion of core product indications such as anlotinib, coumosil, and zonitinib.

At the same time, Sanofi and AstraZeneca's two overseas licensing deals totaling up to 3.43 billion US dollars have also enabled “internationalization” to actually begin to transform for the first time from strategic planning to performance-level increments.

On August 19, China Biopharmaceutical officially announced its 2026 interim results. The data showed a rare high growth trend. Not only did revenue reach a record high of 19.44 billion yuan, up 10.6% year on year, but the adjusted net profit from the core business also achieved a steady increase of 3.34 billion yuan, with a year-on-year growth rate of 92.3%.

After successfully setting the “innovation” label in the past ten years, this established pharmaceutical company, managed by a young team led by Xie Qirun and Xie Chengrun, handed over an answer questionnaire using “deep AI empowerment” and “comprehensive upgrading of internationalization” as the twin engines in the first half of 2026.

Evolution to AI Native, from improving R&D efficiency to restructuring the entire industry chain

If “innovation” is the key word for the past ten years, then “All in AI” is the strategic origin of the group's next ten years.

Zhitong Finance App learned that at this interim results meeting, Zhongsheng revealed its strong accumulation in the field of artificial intelligence for the first time: it has invested about 600 million yuan in AI infrastructure and platform construction in the past three years, and the scale of investment is among the highest among domestic pharmaceutical companies.

As CEO Xie Chengyun said, AI is not an independent business or project within Zhongsheng, but rather a “capability layer” superimposed on R&D, production, and commercialization. This “AI Native” concept is transforming the group's huge pipeline scale and professional data into real productivity.

On the R&D side, the AI-assisted drug development platform built by Zhongsheng has covered the six major platforms of small molecules, ADC, siRNA, OAPD, molecular glue, and TME. It spans various treatment fields such as tumors, cardiovascular/metabolism, breathing/self-immunity, surgery/analgesia, etc., and deeply empowers the early development of 25 pre-IND and clinical-stage pipelines.

Among them, the increase in R&D efficiency brought about by AI is disruptive: in the field of small molecules, the number of compounds required to synthesize PCC was drastically reduced from hundreds in the past to 50-100; in oral proteolytic agent (OAPD) platforms, development time was drastically shortened from 2 years to a minimum of 8 months.

The realization of AI's commercial value is not only reflected in laboratories. The Zhitong Finance App learned that TQC3721 (PDE3/4 inhibitor), an innovative drug for chronic obstructive pulmonary disease, was recently authorized to AstraZeneca at a total price of 1.9 billion US dollars, and AI technology was deeply applied during clinical development. Through a self-developed model patient screening pilot, 30 subjects were matched in the first week after the model was deployed at a clinical center, which is equivalent to the number of people enrolled in the center in the past 2 months. At the same time, intelligent and centralized monitoring is carried out through RBQM and SDR/SDV agents, saving 35% of manual inspection workload and 30% of costs. Through AI application, TQC3721 suspension phase III clinical time was shortened by 10%-15%, and the first phase development of the dry powder inhaler also obtained data several months ahead of schedule through AI enablement, speeding up external licensing.

The company revealed that in the clinical phase, AI has brought about a leap in efficiency, and the phase III clinical period is expected to be shortened from the past 2-3 years to 1.8-2.5 years, significantly speeding up the marketing process of major drugs.

Xie Qirun pointed out that the huge accumulation of mesoscience data is a core barrier to making self-developed models more accurate. In the future, the company will continue to explore cutting-edge fields such as central nervous system (CNS), and use AI to open up the “impenetrable drug” ceiling that traditional pharmaceuticals cannot reach.

In addition to R&D, AI's transformation of production and operation has also been very effective. In the production of strategic products such as Andevil, the application of AI tools in cell culture monitoring and purification risk assessment has helped increase antibody production by 20%, reduce biopharmaceutical manufacturing costs by 20%, and directly increase product gross profit.

At the management level, through process disassembly and AI, repetitive tasks are taken over, and parts with clear rules, high repetition, and verifiable parts are handed over to AI, and people are shifting to judgment, collaboration, and responsibility. “Cost reduction and efficiency” driven by digital strategies is being transformed into a real increase in profits.

Brand Renewal and Two-Way BD Cycle: SBP Group Begins the First Year of Globalization

In June 2026, the Zhengda Tianqing Global R&D Headquarters in Minhang, Shanghai was officially completed and opened, beginning a new transformation from deep local cultivation to global layout. 2026 was also defined by Zhongsheng as “the first year of full internationalization”, and its signature move was to officially launch SBP Group as a unified global brand image.

Among them, “Science (Science), Breakthroughs (Breakthroughs), and Patients (Patients)” represented by SBP symbolizes the company's leap from a leading innovative pharmaceutical company in China to a participant in the global innovation ecosystem. What supports this vision is phenomenal external licensing transactions totaling about 3.5 billion US dollars in the first half of the year, and the increasingly mature “two-way BD” cycle.

In the first half of the year, Zhongsheng continued to win endorsements from the world's top pharmaceutical companies through innovation at the source. In March, global rights in lovaxitinib, the world's first JAK/ROCK dual-target inhibitor, were authorized to Sanofi, and the total amount of 1.53 billion US dollars set a new record in the domestic transplantation field.

Subsequently, the TQC3721 overseas equity deal with AstraZeneca was the highest single product deal in the domestic respiratory sector in the past three years at US$1.9 billion. Up to now, the Group has completed 4 major external licenses, with a total transaction scale of over 7 billion US dollars, and a total down payment exceeding 1 billion US dollars. This means that Zhongsheng's R&D strength and production quality control have been fully certified by the world's top MNC, and BD is moving towards “normalized export.”

While good news of “going global” is spreading frequently, “bringing in” has also entered the harvest period. Among them, the deep strategic cooperation between Zhongsheng and GSK was another highlight of the first half of the year. According to the Zhitong Finance App, in May and July, the company successively obtained commercialization rights in mainland China for GSK's hepatitis B functional cure product Bepirovirsen and two major respiratory products, Quanzaille and Orexin.

Among them, bepirovirsen is expected to become the world's first approved functional cure for hepatitis B, and it has shown an excellent functional cure rate in B-Well series phase III clinical trials. As mature products with total global sales of over £3.5 billion in 2025, Quan Zaile and Olesin will include all of their revenue into Zhongsheng's revenue, directly boosting performance.

Today, this “high globalization+high localization” double layout forms a unique internationalization path for Zhongsheng: at the product level, building a basic global innovative asset market through “self-development+BD+ mergers and acquisitions”, such as dual antibodies, ADC, and small nucleic acid platforms completed after the acquisition of Lixin and Hejia;

At the operational level, the company relies on the Shanghai R&D Center as its global headquarters to select partners in detail according to regional localization capabilities to achieve a new international narrative of “efficiency first”. When multinational giants such as Sanofi, AstraZeneca, MSD, Boehringer Ingelheim, and GSK successively used real money to vote for middle school students, the certainty of their second international growth curve is already extremely high.

Summarize

Up to now, under the two major strategic banners of AI and internationalization, the thickness of mesoscience's pipeline in the four core treatment fields of oncology, liver disease/cardiovascular metabolism, respiration/self-immunity, and surgery/analgesia is being transformed into intensive commercialization results. Among them, the company has approved a total of 20 national Class 1 or Class 2 innovative drugs for marketing. It is estimated that by 2030, the total number of innovative drugs will reach nearly 50.

Looking at the 2026 interim report, China Biopharmaceuticals is showing a kind of “rare vitality.” After successfully completing the intergenerational change of management, the company not only maintained the basic market market, but also took the lead in competition for innovative drugs going overseas and technology differences through all-round “All in” of AI technology and “deep upgrading” of the internationalization path.

While the market is still measuring a pharmaceutical company through traditional financial indicators, Zhongsheng has transformed AI into real value chain output and opened up a cycle of value sharing with the world's top pharmaceutical companies. With the normalization of external licensing revenue and the accelerated implementation of various FIC/BIC products, the international story belonging to the SBP Group has only just opened the homepage. This established pharmaceutical company, which is deeply involved in innovation and fully embraces AI, is probably one of the targets worthy of attention in the current Hong Kong stock pharmaceutical sector.