On February 26, before market opening, MEDTIDE (03880) issued a profit alert for the 2025 fiscal year. According to the announcement, the company anticipates revenue to be between 555 million and 585 million yuan, representing a year-on-year increase of 25.5% to 32.3%. Concurrently, the company expects net profit for the period to reach 200 million to 230 million yuan, marking a substantial surge of 237.8% to 288.5% compared to the previous year. In the announcement, MEDTIDE attributed the robust revenue growth to the successful implementation of its "Follow the Molecule" strategy, the advantages of its integrated CRDMO platform, timely project delivery, and excellent execution.

With both annual revenue and profit showing significant increases, MEDTIDE naturally received a positive response in the secondary market that day. The company's stock price rose rapidly after opening, reaching an intraday high of HK$27 within the first hour of trading, with a maximum gain of 6.72%. Although the stock price fluctuated afterwards, it remained above the day's average price line, ultimately closing up 5.85%. However, this upward momentum lasted only a single day. On the trading day following the profit alert, MEDTIDE's stock price opened lower and fell rapidly during the morning session, with losses reaching as much as 6.58%, nearly erasing all gains from the previous day.

Taking a longer-term view, after hitting an intraday high of HK$41.72 last August, MEDTIDE's stock price has been on a downward trajectory, falling to a low of HK$21.50 within six months, effectively halving in value.

Did the unlocking of cornerstone investor shares lead to accelerated outflows of major capital? On December 30 of last year, MEDTIDE's cornerstone investor share lock-up period expired. Prior to this, the company's stock price had experienced a three-month decline influenced by sector-wide volatility, with the average daily price stabilizing below the IPO price of HK$30.60 from late November to early December. It wasn't until December 15, fifteen days before the lock-up expiration, that MEDTIDE's stock price began to rebound, recording eight consecutive days of gains in a steady climb.

Although the proportion of shares locked up by cornerstone investors was not particularly high compared to other companies facing similar unlock events—in its June IPO, MEDTIDE attracted two cornerstone investors who subscribed for a total of approximately 2.565 million shares (worth $10 million), accounting for 15.27% of the global offering and 1.81% of the total shares post-offering—the market reaction was telling. On the day of the unlock and the following day, MEDTIDE's stock price closed up a modest 0.94% and 1.20%, respectively. However, the stock price peaked at only HK$30.50 during this period, still failing to reclaim the IPO price. Furthermore, although the price saw a sustained slight rally before the unlock date, it failed to continue its upward momentum after reaching the upper Bollinger Band, and no significant increase in trading volume was observed to support a breakout, resulting in what is technically considered a "false breakout" on the Bollinger Band indicator. Consequently, after confirming a lack of buying support from outside investors on December 31, MEDTIDE's stock price experienced a rapid decline over the next three trading days and continued to fluctuate between the middle and lower Bollinger Bands as the bands widened.

Between January 2 and February 9, sentiment among existing shareholders clearly shifted from consensus to divergence. Capital flow data indicated significant outflows of large block orders during the stock's gradual decline, with nearly HK$4 million in net outflows from the market throughout February. Broker trading data showed that the top five selling brokers were Wan Hai, Futu Securities, Everbright, Interactive Brokers, and GF Securities, selling 372,100, 198,200, 171,000, 150,700, and 120,200 shares respectively. On the buying side, the top five brokers were Soochow, Guoyuan, HSBC, China Merchants Securities, and Standard Chartered, purchasing 424,500, 372,100, 88,200, 81,800, and 51,100 shares respectively.

Could the profit alert rescue the falling stock price? On February 5, MEDTIDE's stock price closed down 5.56%, hitting a new all-time low of HK$21.50 intraday. Simultaneously, the stock price fell below the lower Bollinger Band, signaling an oversold condition. Consequently, on February 6, the stock price began to show signs of a technical rebound, returning to the middle Bollinger Band within four trading days. However, market sentiment remained subdued, and the stock price subsequently fluctuated around the middle band without further upward progress. It was against this backdrop that MEDTIDE announced its annual profit alert. Yet, the positive news appeared insufficient to lift the stock out of its slump.

Returning to the announcement, while the company reported a 25.5% to 32.3% year-on-year revenue increase and a dramatic 237.8% to 288.5% surge in net profit, it also noted that after excluding one-off financial gains and losses, its adjusted net profit for the period was in the range of 200 million to 230 million yuan, but the year-on-year growth rate narrowed significantly to just 16.3% to 33.7%. MEDTIDE explained that the 2025 figures included a fair value gain on financial liabilities measured at fair value through profit or loss, resulting from the conversion of redeemable liabilities into equity upon its H-share listing, whereas a fair value loss was recorded for this item in 2024. This indicates that a substantial portion of the near-tripling net profit growth stemmed from non-operational accounting changes, rather than a proportional improvement in core business profitability.

Such performance has, to some extent, heightened investor concerns about the peptide CDMO industry and its players. Looking at the downstream market, according to Frost & Sullivan data, the global peptide drug market, measured by sales revenue, grew from $60.7 billion in 2018 to $89.5 billion in 2023, representing a compound annual growth rate (CAGR) of 8.1%, and is projected to further expand to $261.2 billion by 2032, with a CAGR of 12.6%. Within this, the Chinese peptide drug market grew from 48.2 billion yuan in 2018 to 59.7 billion yuan in 2023, a CAGR of 4.4%, and is expected to reach 251.2 billion yuan by 2032, a CAGR of 17.3%.

While the market marvels at this "blue ocean" opportunity, leading companies and some investors within the sector have quietly entered a "strategic reassessment phase." On August 5 last year, while announcing its Q2 results, Pfizer unexpectedly announced the termination of eight clinical-stage projects, including its final GLP-1 receptor agonist, PF-06954522, signaling its complete exit from the GLP-1 pipeline after all three of its candidates were discontinued. If Pfizer's pipeline cuts represent a strategic retreat from the GLP-1 arena, then just two days later, Eli Lilly, despite reporting strong Q2 2025 results, saw its stock price plummet 14% in a flash crash, partly due to disappointing clinical data for its oral weight-loss drug Orforglipron, triggering panic selling. Behind this lies the dual pressures of intensifying competition and shrinking profit margins in the GLP-1 market.

Nevertheless, giants in the GLP-1 space are simultaneously intensifying competition and engaging in a "capacity race." In response to explosive global demand for GLP-1 therapies, pharmaceutical companies worldwide are fiercely competing to expand peptide CDMO capacity. While leading domestic CDMO players are accelerating production expansion, originator companies like Eli Lilly are also building their own manufacturing capabilities. For example, in the peptide segment, Nuotai Bio's new Jinde facility workshop seven commenced operations, adding 220,000 liters of GMP-grade capacity. Sinotau's "Innovative Peptide Drug CDMO and API Industrialization Project" saw workshops 106, 107, and 108 gradually begin production, which upon full operation will add 395 kilograms of peptide API capacity.

Currently, the planned GLP-1 peptide API capacity in China is approximately 33-40 tons. However, according to CICC estimates, the global API demand for semaglutide and tirzepatide is projected to be only about 50 tons by 2030, suggesting that global supply could significantly exceed short-term demand. As signs of a potential "price war" emerge in the industry, leading domestic CDMOs and multinational giants can accelerate technological iteration while securing high-quality CDMO resources through in-house capacity builds and long-term partnerships. In contrast, new entrants and smaller players are likely to face increasing pressure on their market space.

With global GLP-1 peptide API capacity expected to reach saturation between 2025 and 2026, industry consolidation within the peptide CDMO sector appears inevitable. Against this backdrop, how MEDTIDE can maintain its competitive position and fundamental stability will likely be a key focus for investors.