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Huaxia Times Reporter Zhao Wenjuan and Na Beijing Report

In 2025, Baiji Shen Zhou, known as the “King of Innovative Drugs,” undoubtedly made history. The company’s annual report released on the evening of February 26 finally showed a long-anticipated positive figure in the key indicator of “Net Profit Attributable to Owners of the Parent Company”—14.22 billion yuan. From years of massive losses to the first full-year profit, from purely “burning money” on R&D to initially achieving self-sustaining “cash flow,” Baiji Shen Zhou seems to have finally ushered in the dawn of its much-touted “Year of Commercialization.”

However, the capital market responded with a sharp decline, offering a very different interpretation. Before and after the earnings announcement, its stock prices in Hong Kong, A-shares, and U.S. stocks experienced consecutive heavy declines, with significant market value evaporation. Why did this “historic turnaround” turn into a “punching bag” for stock prices? Behind the impressive data of 38.205 billion yuan in revenue, a year-over-year growth of over 40%, lies a sharp 58% quarter-over-quarter drop in Q4 profit and a slowdown in the 2026 growth outlook, which has brought market doubts about the company’s sustained growth to the forefront.

In response to these questions, Huaxia Times reporters sent inquiries to Baiji Shen Zhou but had not received a reply by the time of publication.

Highlight Moments and Market Coldness

Looking at the full year, Baiji Shen Zhou’s 2025 was undoubtedly brilliant. The company’s total operating revenue reached a new high of 38.205 billion yuan, a 40.4% increase year-over-year. More excitingly, net profit attributable to the parent reached 1.422 billion yuan, a qualitative leap from the billions of yuan in losses the previous year. This seemingly marked the beginning of the harvest period for the company’s long-standing “high investment in R&D” model, and the closed-loop logic of global commercialization was preliminarily validated.

(Screenshot from 2025 performance report)

However, the capital market gave a very different interpretation. Before and after the release of the earnings report, Baiji Shen Zhou’s stock prices in the U.S., Hong Kong, and A-shares all fell sharply. On February 26, Hong Kong stocks (06160.HK) plunged 9.16%, breaking the HKD 200 psychological barrier, with market value falling below HKD 300 billion; the next day, it continued to decline by 1.08%. The Sci-Tech Innovation Board (688235.SH) in A-shares also came under pressure, dropping 5.65% on the 26th and another 2.18% on the 27th. The U.S. market was no exception; after a volatile decline on the 25th, it fell sharply by 8.48% on the 26th, closing at $322.37.

“Baiji Shen Zhou’s revenue surged 40% in 2025 and achieved its first full-year profit, but the stock prices in three markets fell significantly after the earnings release. This divergence essentially reflects the collective reassessment by the capital markets of the company’s short-term performance, long-term growth expectations, and valuation logic, rather than a negation of the company’s current operational results,” said Yuan Shuai, Deputy Secretary-General of the Zhongguancun IoT Industry Alliance, to our reporter.

Beneath the dazzling exterior of annual data, market concerns may lie in quarterly fluctuations. Based on its third-quarter net profit of 689 million yuan, the fourth quarter’s net profit is estimated to have plummeted to about 284 million yuan. This means that in the final quarter, the company’s profitability sharply declined by nearly 59% quarter-over-quarter. A “historic turnaround” ending with a quarter of profit halving naturally raises questions about the sustainability of profit quality.

If quarterly fluctuations are just an “underlying disease” of profit quality, then the company’s revenue forecast for 2026 directly triggers concerns about growth prospects. The company expects its new year’s operating revenue to be between 43.6 billion and 45 billion yuan, representing a year-over-year growth of 14.12% to 17.79%. Compared to the 40% increase in 2025, this is nearly halved.

(Screenshot from 2026 performance forecast)

“For high-valuation growth stock investors accustomed to Baiji Shen Zhou’s ‘doubling growth’ narrative, a slowdown to below 20% means the valuation system needs to be reconstructed—shifting from ‘growth stocks’ to ‘value stocks’ usually involves valuation compression,” said Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance. “This is the most core negative factor.”

Bai also pointed out that the decline on February 26 was not unique to Baiji Shen Zhou but was part of a broader correction in the Hong Kong biotech sector. It is reported that on that day, over 60% of the 290 stocks in the Hong Kong healthcare sector declined, with 61 stocks falling more than 4%. Among them, Deqi Medicine (06996.HK), Baiji Shen Zhou (06160.HK), and WuXi AppTec (02268.HK) led the decline, dropping 10.44%, 9.16%, and 8.69%, respectively. Sector-wide profit-taking and emotional disturbances undoubtedly intensified individual stock declines.

Fatigue of the flagship, where are the new stars?

The core revenue foundation of Baiji Shen Zhou undoubtedly comes from its two key products: BTK inhibitor Zepzelca (Zanubrutinib) and PD-1 monoclonal antibody Baize’an (Tirrelizumab). However, in this profit turnaround report, both engines show signs of “fatigue” to varying degrees.

The first is the “flagship” product Zepzelca. As the company’s “cash cow,” Zepzelca’s global sales in 2025 reached 28.067 billion yuan, a 48.8% increase, contributing over 70% of Baiji Shen Zhou’s total revenue, illustrating high product dependence. Although this growth rate remains impressive within the industry, it cannot hide the fact that its growth has slowed. Looking back at 2023 and 2024, the global sales of this product doubled consecutively (138.7%, 106.4%).

The slowdown in growth is mainly due to its largest market, the United States.

Data shows that in 2025, Zepzelca’s sales in the U.S. reached 20.206 billion yuan, a 45.5% increase. While still substantial, this is a sharp slowdown from the 107.5% year-over-year growth in 2024. Although Europe and China achieved growth of 66.4% and 33.1%, respectively, their sizes are insufficient to offset the impact of weakening U.S. momentum. This clearly indicates that after reaching a peak, the star product faces dual pressures of base effects and intensified market competition.

It is worth noting that Zanubrutinib remains the most widely approved BTK inhibitor globally, approved in over 75 markets. The company also disclosed that it expects to conduct a mid-term analysis in the first half of 2026 for the phase 3 MANGROVE trial comparing Zepzelca combined with Rituximab versus Bendamustine combined with Rituximab for first-line treatment of mantle cell lymphoma (MCL) adult patients. If successful, this could open new avenues for extending the product lifecycle.

Turning to the other core battlefield, the PD-1 field, Baize’an (Tirrelizumab) also shows signs of growth slowdown. In 2025, its global sales reached 5.297 billion yuan, an 18.6% increase. Over the longer term, 2024’s growth was 17.4%, and 2023’s was 33.1%, indicating that after a high-growth year in 2023, the growth curve has flattened for two consecutive years.

Although Baize’an has been approved in over 50 markets worldwide and is one of China’s representative exports of PD-1 drugs, intense price competition in the domestic PD-1 market, ongoing negotiations with medical insurance, and uncertainties in overseas reimbursement policies continue to compress profit margins. The company plans to submit applications in the first half of 2026 for new indications of Baize’an combined with Bevacizumab for first-line treatment of HER2-positive gastric and esophageal adenocarcinoma in the U.S. and China, and aims to obtain approval for first-line gastric cancer treatment in Japan in the second half of 2026. Whether these developments can break the current growth bottleneck remains to be seen by the market.

As flagship products slow down and the second growth curve has yet to accelerate, Baiji Shen Zhou’s future hope naturally depends on its R&D pipeline. In 2025, the company’s R&D investment still reached 2.146 billion USD, a 10% increase, which is both the foundation of its long-term value and a heavy burden for short-term profitability. The highly anticipated BCL-2 inhibitor Sotorasib (Zepzelca) has been approved domestically and is expected to open the U.S. market, regarded as a potential new growth point. However, the road of new drug development and commercialization is always full of uncertainties—from clinical progress to final approval, and then to becoming the new pillar after Zepzelca—obstacles at the technical, regulatory, market, and geopolitical levels stand in the way. On the tightrope of high R&D investment and market expectations, every step Baiji Shen Zhou takes must be more cautious. After all, the market’s patience for uncertainties is rapidly being consumed by this mixed performance report.