CF PharmTech, Inc. Issues Profit Warning: Detailed Analysis for Investors

Key Highlights

• Significant decline in revenue and net profit expected for FY2025 compared to FY2024
• Revenue forecast for 2025: RMB410.0 million – RMB450.0 million, down from RMB607.75 million in 2024
• Net profit (IFRS): RMB2.0 million – RMB3.0 million in 2025, compared to RMB21.09 million in 2024
• Adjusted net profit (non-IFRS): RMB30.0 million – RMB35.0 million in 2025, versus RMB51.87 million in 2024
• Multiple factors driving the decline, including pricing pressure, market demand, and increased R&D spending
• Company emphasizes continued normal operations and key milestones post-listing

Detailed Financial Outlook

CF PharmTech, Inc. (“CF PharmTech” or “the Company”) has issued a profit warning for the financial year 2025. The Company expects its revenue to fall substantially, projecting a range of RMB410.0 million to RMB450.0 million, compared to RMB607.75 million in 2024. Net profit attributable to shareholders under IFRS is forecasted to drop sharply to RMB2.0 million – RMB3.0 million in 2025, down from RMB21.09 million in the previous year.

On a non-IFRS basis, which adjusts for one-off listing expenses and share-based payment expenses, the Company anticipates an adjusted net profit of RMB30.0 million – RMB35.0 million for 2025, versus RMB51.87 million in 2024. These figures reflect both operational and non-recurring impacts.

Factors Behind the Decline

1. Reduced Product Pricing:
   The principal product, CF017 (budesonide suspension for inhalation), saw a reduction in average selling price due to the renewal of Volume-Based Procurement (VBP) arrangements. This product accounts for the majority of the Group’s total revenue. Delays in national and provincial drug procurement schedules and adjustments by healthcare institutions caused a temporary slowdown in procurement and delivery during the transition period.
2. Lower Market Demand:
   The overall prevalence of respiratory infections decreased in 2025 compared to the prior year, reducing demand for inhaled formulation products.
3. Sales Network Restructuring:
   CF PharmTech restructured its sales and distribution network in 2025, consolidating sales and marketing functions and increasing collaboration with distributors. Engagement with third-party promoters was reduced, impacting short-term sales and promotional activities.
4. Increased R&D Expenses:
   The Company continued to increase its investment in research and development for innovative drugs, resulting in higher expenses and compressed profit margins.
5. One-off Listing Expenses:
   Non-recurring expenses related to the listing of H Shares on the Hong Kong Stock Exchange in October 2025 impacted net profit under IFRS, though these are excluded from the adjusted net profit measure.

Corporate and Strategic Developments

• Innovative Drug Progress:
  Marketing authorization applications for budesonide nasal spray and investigational new drug applications for ICF004 and ICF001 have been accepted by the National Medical Products Administration. Clinical trial applications for olopatadine hydrochloride and mometasone furoate monohydrate nasal spray have been approved, strengthening the product matrix in respiratory and nasal care.
• VBP Program Expansion:
  Brand volume reporting for CF017 under the national VBP renewal program has been completed, expanding hospital coverage nationwide and extending the procurement cycle to the end of 2028.
• Index Inclusion:
  The Company has been included in the Hang Seng Composite Index and the list of eligible securities for Southbound Trading under both the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect programs, which is expected to enhance trading liquidity of the H Shares.
• H Share Repurchases:
  The Company has conducted repurchases of H Shares under a general mandate granted in December 2025, and may consider further repurchases depending on market conditions and capital arrangements.

Important Considerations for Shareholders

The anticipated decline in revenue and net profit for 2025 is significant and may be considered price-sensitive information. Investors and shareholders should note that the Company’s financial results are still being finalized and may be subject to adjustments. The official audited results will be published by the end of March 2026.

Despite these challenges, CF PharmTech remains committed to its strategic objectives, with ongoing progress in innovative drug filings and expanded hospital coverage under national procurement programs. The Company’s inclusion in major indices and stock connect programs may also positively influence share liquidity and investor interest in the medium term.

Non-IFRS Measures Disclosure

The Company uses adjusted profit/loss (non-IFRS measure) as an additional financial metric to supplement IFRS reporting. This measure adds back share-based payment expenses (non-cash) and listing expenses (non-recurring), facilitating comparisons of operating performance. Investors should note that non-IFRS measures may not be directly comparable to similar measures used by other companies and should not be viewed as substitutes for IFRS-reported results.

Investor Caution

Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company. The details disclosed in this article are based on unaudited management accounts and estimates, which may change upon finalization and audit.

Disclaimer

The information contained in this article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The financial data and forecasts are based on preliminary unaudited management accounts and estimates provided by CF PharmTech, Inc., and may be subject to change following audit and final review. Investors should consider their own investment objectives and consult with professional advisors before making any investment decisions.

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