Where did third-quarter results differ from expectations?

  • Third-quarter revenue in 2026 was 1.788 billion yuan, up 24% year over year but 10% below market consensus; core operating profit was 304 million yuan, up 81% year over year and 11% below consensus.
  • Net profit attributable to shareholders was 332 million yuan, up 81% year over year and 28% above consensus, mainly thanks to 128 million yuan in net non-recurring gains after tax, primarily from changes in the fair value of financial assets and disposal gains. Excluding non-recurring items, net profit attributable to shareholders was 203.5 million yuan.

Why was overall revenue still weak despite the recovery in the small-molecule business?

  • Bernstein estimates that third-quarter small-molecule CDMO revenue was 1.168 billion yuan, up 28% year over year, a marked rebound from the 5.4% year-over-year decline in the first half of 2026; revenue from the business rose 6% from the second quarter.
  • Emerging-business revenue was 619 million yuan, up 18% year over year, with growth markedly slower than 114% in the third quarter of 2025 and 72.5% in the first half of 2026. It also fell 12% from the second quarter. The slowdown in emerging businesses offset part of the contribution from the small-molecule recovery, and overall revenue fell 1% from the second quarter.

Did the improvement in margins continue?

  • The third-quarter gross margin was 41.1%, above 40% a year earlier but below 42% in the second quarter. The R&D expense ratio fell to 6%, from 10% a year earlier and 7% in the second quarter.
  • The administrative expense ratio rose to 15%, compared with 11%–12% in the previous two quarters and 14% a year earlier. The core operating margin was 17%, up 5 percentage points year over year but down 3 percentage points from the second quarter.

What does maintaining full-year guidance mean for the fourth quarter?

  • Management maintained its guidance for full-year 2026 revenue growth of 19%–22%. Bernstein estimates that this implies fourth-quarter revenue of 2.5 billion–2.7 billion yuan, up 25%–34% year over year and approximately 42%–53% from the third quarter.
  • Based on orders in hand, management expects fourth-quarter deliveries to increase substantially from the third quarter; following the sequential weakening in third-quarter revenue, full-year guidance requires a marked acceleration in year-end deliveries.
  • Bernstein maintained its Outperform rating on Asymchem, with a target price of 205 yuan for its A shares and 163 Hong Kong dollars for its H shares.