Asymchem Laboratories (Tianjin) Co., Ltd. provided earnings guidance for the six months ended June 30, 2024. For the period, the company expects net profit attributable to shareholders of the Company to be approximately RMB 480.00 million to RMB 550.00 million, representing a decrease by approximately 67.39% to 71.54% compared to approximately RMB 1,686.37 million for corresponding period in 2023; Basic earnings per share of the Company to be approximately RMB 1.36 per share to RMB 1.56 per share compared to approximately RMB 4.65 per share for the corresponding period in 2023. Main reasons for the estimated change in interim results for the reporting period: In the first half of 2024, the Company recorded operating revenue of approximately RMB 2.660 billion to RMB 2.740 billion, representing a year-on-year decrease of 40.72% to 42.45%, which was mainly due to no delivery of similar large orders during the Reporting Period as compared with the corresponding period last year.

During the Reporting Period, under condition of continuous downturn in biopharmaceutical financing environment both domestically and internationally, excluding the impact of large orders delivered during the corresponding period last year, the operating revenue of the Company achieved a slight growth, and the small molecule CDMO business still maintained year-on-year growth. As the recovery of domestic biopharmaceutical financing was slower than expected, the income from emerging businesses recorded a year-on-year decrease in operating revenue. In the first half of 2024, the net profit attributable to the shareholders of the Company amounted to approximately RMB 480 million to RMB 550 million, representing a year-on-year decrease of 67.39% to 71.54%.

The higher decrease as compared with operating revenue was primarily due to (1) the higher gross profit margin of large orders delivered in the corresponding period in the last year; (2) the decrease in revenue from emerging businesses and the relatively low capacity utilization rate of some businesses in developing period, coupled with lower gross profit margin for emerging businesses resulting from fierce competition in the domestic market; (3) the fact that despite the Company's efforts to strictly control costs and expenses, it is difficult to keep pace with the decline in revenue in a short period; (4) the relatively stable research and development expenses as compared to the corresponding period last year due to the Company's focuses on future development, and continues investment in research and development of new technologies and exploration of new businesses. Overall, despite facing numerous challenges, the trend of specialization in the international pharmaceutical industry has not changed fundamentally, and the continued prosper of polypeptide, ADC, small nucleic acid and other drug categories has brought new opportunities and expanded market space. In 2024, the Company accelerated its overseas expansion and construction of polypeptide production capacity, continuously increased its business development efforts, and achieved a year-on-year growth of over 20% in new orders.

Additionally, there was a significant quarter-on-quarter growth in the second quarter compared to the first quarter, with order growth from customers in the European and American markets outpacing the overall order growth rate of the Company.