The public subscription funds have already formed a group to rush in. What clues are hidden behind the issuance of the new 'weight-loss drug king' Jiuyuan Genetics?

Jiuyuan Gene is a very interesting stock, combining the dual attributes of an institutional stock and a speculative stock. It has the stable profitability and high-growth characteristics that institutions favor, with expectations of doubling future performance, making its investment value obvious. Moreover, its valuation is incredibly low, which is quite touching. At the same time, hidden details in its issuance structure subtly hint at a speculative nature, such as broker allocations, making it worth a closer analysis.

The preliminary conclusion is that all signs indicate Jiuyuan Gene has the potential for a significant rally. Below are the five major bullish logics supporting my view that Jiuyuan Gene is poised for a big surge:

1. Fundamentals: Stable profitability, already an industry leader, and now at the tipping point of high-growth performance explosion.
The company is profitable, with profits exceeding 100 million yuan for several consecutive years, unlike loss-making 18A companies. In the first half of this year alone, net profit surpassed 100 million yuan, which is rare in the Hong Kong stock market's healthcare sector. It has two core flagship products: one is the already profitable star bone repair product "BoneGuide," and the other is the weight-loss wonder drug semaglutide under development. Once approved, performance is expected to double in the next year or two.

BoneGuide contributed 700 million yuan in revenue last year, with a high gross margin of nearly 80%. Its market share ranks first, exceeding the combined total of the second and third players, at 21.8%. Domestically, there are no real competitors. Its leading position is solid, and with the second-ranked Shanxi Aoru exposed for illegal practices, competitors' scandals have handed market share to Jiuyuan. BoneGuide is expected to maintain an annual growth rate of 30%.

The prospects for the weight-loss drug semaglutide pipeline are even broader. The original drug is from Denmark's Novo Nordisk, which has sold out and remains on the FDA shortage list. No domestic manufacturer has released a generic version yet. Therefore, the competition for domestic generics boils down to two factors: speed (who gets approval first) and commercialization capability (production capacity and sales channels to meet massive demand). Jiuyuan leads domestically in both areas, with the fastest clinical progress and the first NDA submission. Cornerstone investors like Fosun Pharma, Alibaba Health, and Jointown are all strong in drug sales. Once approved, market penetration will be swift. Fosun Pharma's overseas channels are also robust, allowing Jiuyuan to capitalize on Novo Nordisk's supply shortages. Future performance growth won't disappoint, with expectations of doubling in three years.

Novo Nordisk has sold over $20 billion this year, nearly surpassing Merck's Keytruda, making it the potential "new drug king." Comparing Jiuyuan's fundamentals to Kelun-BoTai's, it's clear Jiuyuan is a serious candidate for institutional research.

Additionally, the market potential for these two products is vast, in the billions or even tens of billions, with historical opportunities abroad and a blue ocean domestically.

2. Valuation: Compared to peers, Jiuyuan's IPO valuation is significantly lower.
The IPO valuation is just 2.9 billion HKD at the midpoint, with a 2025 forward PE of around 13x. Once semaglutide boosts performance in 2026, the 2026 forward PE could drop below 10x. For a profitable pharma company, this is far below the industry average of 30x for 2025 forward PE, making it a bargain.

3. Share Structure: H-share lock-up, controllable float, and insider buying.
H-share insiders are locked up for a year, and foreign shares applying for full circulation have a 12-month lock-up. With a market cap of 2.8-3 billion HKD, the issuance is only about 500 million HKD, and cornerstone investors account for 64.14%. Combined with non-tradable H-shares, the float is just 180 million HKD, under 200 million.

Major shareholders include Huadong Medicine and former chairman Li Bangliang, holding nearly 40%. The IPO introduced cornerstones like the Hangzhou government, industry players Fosun Pharma, Alibaba Health, Jointown, and Nanjing Jianyou, as well as financial investor DT Capital (specializing in healthcare). Notably, individual cornerstone investor Wu Qiyuan, chairman of Junting Hotel and a former Huadong Medicine engineer, is also a Jiuyuan co-founder, signaling insider confidence. With such heavyweight backers, secondary market support is likely.

4. Underwriters: Solid "CITIC, CMB" + speculative "Ruibang, Baihui."
The underwriting syndicate includes five brokers: steady performers CITIC and CMB, alongside speculative players Ruibang and Baihui, offsetting the weak link of Huatai.

Ruibang has underwritten Guanglian Tech, Jingfa Property, Auto Street, EDA Group, and Fujing China, with strong post-listing performance except for Jingfa's slow start.

Baihui is even more impressive, with a track record of hot IPOs like Guanglian Tech, Jingfa Property, Auto Street, EDA Group, Fujing China, Jinko Electronics (up 47.65% on debut), Huahao Zhongtian Pharma-B (up 30% on debut), and last year's 17x speculative star Changjiu Co. and rally king Yaoshibang.

5. Bullish Outlook: HK Connect candidate, high reward potential.
Huadong Medicine is a darling of mainland institutions, especially in healthcare and beauty sectors, attracting consumer-focused investors. With broad institutional coverage, Jiuyuan's quality makes it a natural HK Connect candidate.

Forward-looking institutions may already be positioning at the IPO stage, akin to Laopu Gold, paying a 30-40% premium to IPO pricing. At under 3 billion HKD, HK Connect inclusion could double the stock's value. While we retail investors can't wait that long, we can participate early for smaller gains. Rumors suggest strong institutional demand, possibly crowding out retail allocations, as seen in heavy first-day subscriptions.

In summary, with multiples rising and funds piling in, my conclusion is to go all-in. I've placed a top bid and recommend others allocate as much as they can. With growth fundamentals and speculative appeal, Jiuyuan is a future feast.

$JIUYUAN GENE(02566.HK) $FOSUN PHARMA(02196.HK) $ALI HEALTH(00241.HK) $Jointown(600998.SH) $HUADONG MEDICINE(000963.SZ) $NKF(603707.SH)