Hua Medicine (2552) investor relations material

Executive summary

• Achieved a 74% year-over-year revenue increase to RMB378.9 million in 1H2026, with a 73% rise in sales volume and strong commercialization progress, supported by an expanded sales team and improved collaboration across functions.

• Gross profit rose 99% to RMB234.3 million, with gross margin improving to 61.8% from 54.2% due to scale efficiencies and expanded production.

• Net loss narrowed significantly to RMB30.2 million, reflecting improved operational efficiency and excluding prior year’s one-off Bayer contract gain.

• Cash balances remained robust at RMB1,072.9 million as of June 30, 2026, supporting ongoing R&D and commercialization initiatives.

• Expanded market presence in Hong Kong and Macao, leveraging regulatory reforms and new guidelines to reach broader patient populations.

Financial highlights

• Revenue reached RMB378.9 million in 1H2026, up 74% year-over-year, with gross profit at RMB234.3 million and gross margin at 61.8%.

• Selling expenses increased with sales team expansion, stabilizing at 33%-35% of revenue.

• R&D expenses were RMB66.8 million, with administrative expenses at RMB67.3 million and their ratio to revenue declining.

• Commercialization profit doubled to RMB107.4 million, and adjusted net loss narrowed by RMB29.4 million.

• Cash and cash equivalents stood at RMB1,072.9 million as of June 30, 2026.

Outlook and guidance

• Targeting close to RMB1 billion in annual revenue for 2026, with expectations to exceed this in 2027 based on current trends and employee incentive-linked targets.

• Continued robust sales growth and geographic expansion planned, including Southeast Asia, Belt and Road markets, and global partnerships.

• NDA submission for dorzagliatin/metformin FDC planned for 2027, with ongoing clinical progress and IND filings for new indications.

• U.S. clinical program for 2nd generation GKA progressing, with topline data expected in 2H2026.

• Anticipates break-even by year-end 2026 and profitability in 2027 through disciplined execution and innovation.