Wuhan Keqian Biology Co., Ltd. (688526)

Equity analysis report | Industry: Veterinary biological products / Animal health | Report date: September 13, 2026 | 2026-09-11 close (most recent A-share trading day)

This report is automatically compiled and generated by AI based on public information and is for reference only; it does not constitute investment advice.

1. Key Summary

Keqian Biology (688526.SH)'s 2026 interim report shows that the company is under significant operating pressure: first-half revenue was RMB 374 million, down 23.28% year-on-year; net profit attributable to parent was RMB 116 million, down 47.37% year-on-year, with the profit decline clearly larger than the revenue decline; recurring net profit attributable to parent was RMB 85.6968 million, down 54.89% year-on-year. Looking at Q2 alone, revenue was RMB 146 million, down 39.57% year-on-year; net profit attributable to parent was RMB 36.4871 million, down 67.32% year-on-year; recurring net profit was RMB 16.2449 million, down 83.48% year-on-year, weakening further both sequentially and year-on-year — the most decision-relevant fact at present.

The earnings decline was mainly driven by a combination of factors: weak downstream hog farming conditions pressuring demand and prices, the applicable VAT rate for biological products rising from 3% to 13%, and overcapacity and intensifying competition in the animal health industry. Profitability fell markedly: 2026H1 gross margin 59.42% (down 7.86pct year-on-year, falling further to 52.30% in Q2 alone), net margin 30.69% (down 14.31pct year-on-year), weighted ROE 2.77% (down 2.6pct year-on-year). In terms of revenue structure, veterinary biological products revenue was RMB 347 million, accounting for 92.75% of revenue, down 24.83% year-on-year, the main source of the revenue decline.

On the positive side, the company increased R&D investment against the cycle, with 2026H1 R&D investment of RMB 59 million, up 30.66% year-on-year, rising to 15.90% of revenue; the debt-to-asset ratio was only 10.68%, and net operating cash flow was RMB 116 million, still positive despite a 33.54% year-on-year decline, reflecting a sound financial structure. The company is a leader in non-state-mandatory-immunization swine biological products, with the largest domestic market share in swine pseudorabies vaccines for many consecutive years, a market share of over 30% in swine pseudorabies vaccines in 2025 (per AskCI Consulting), and it is also expanding into pet vaccines, ruminant vaccines, diagnostic reagents, and other new directions.

On valuation and market levels, as of the 2026-09-11 close, the share price was RMB 12.48, down 2.12% on the day, total market cap RMB 5.817 billion, PE(TTM) 18.49x, PE(static) 13.89x, PE(dynamic) 25.13x, PB 1.44x, and 52-week change of about -30%. Note that the consensus estimates have been revised down: newly released reports after the interim results from Western Securities (2026-09-06) and Caitong Securities (2026-08-28) lowered their 2026E net profit attributable to parent forecasts to RMB 329–339 million, clearly below the old forecasts of RMB 420–440 million from April–May, while East Money F10's consensus "average over the past six months" of RMB 398.4 million blends old and new forecasts and may be on the high side.

2. Company Overview

2.1 Basic Information

2.2 Main Business and Product Layout

• Swine vaccines (core, mainly non-state-mandatory-immunization swine vaccines)
• Poultry vaccines
• Pet vaccines (expansion direction)
• Diagnostic reagents (expansion direction)
• Ruminant (cattle and sheep) animal vaccines (expansion direction)
• Probiotics (expansion direction)

2.3 Industry Chain Position and Cost-Profit Structure

Keqian Biology is an R&D and manufacturer of veterinary biological products (with non-mandatory-immunization swine vaccines at the core). Upstream are suppliers of biological product raw/auxiliary materials and packaging; downstream are hog/poultry farming enterprises and farmers. The following expands item by item across the upstream cost side, downstream customer side, working capital occupation, and gross margin trend, and provides a smile-curve positioning.

• Main raw materials are serum, adjuvants, culture media, plastic bottles, and rubber stoppers, etc. (per the annual report), which are biological product raw/auxiliary materials + packaging, not bulk resource commodities.
• Supplier concentration: in 2025 the top 5 suppliers made total purchases of RMB 66 million, accounting for 36.67% of total purchases (Supplier 1 at 10.77%, Supplier 2 at 10.61%, the rest each about 5%). This data comes from the Tongdaxin F10 secondary aggregation page (gubit.cn), a single source that could not be cross-verified against the original annual report; refer to the latest annual report.
• Assessment: upstream raw material sources are broad and suppliers are dispersed (the Forward Industry Research Institute's five-forces analysis also states that supplier bargaining power is moderate), and the company is basically a price taker upstream with no significant cost pass-through capability; cost-side reductions rely more on internal process upgrades (such as suspension culture and reduced serum usage).
• Customers are hog/poultry farming enterprises and farmers: large farming groups (direct sales, requiring bidding), medium-sized pig farms, and small farmers (via distribution channels).
• Key customers (company's own statements): long-term cooperation established with large farming enterprises such as Muyuan Foods, Wens Foodstuff Group, New Hope, and Yangxiang Group (2026 interim report).
• Top 5 customers in 2025 had combined sales of RMB 229 million, accounting for 24.13% of operating revenue (Customer 1 at 5.89%, Customer 2 at 5.62%, Customer 3 at 4.30%, Customer 4 at 4.23%, Customer 5 at 4.09%). Source is gubit.cn/Tongdaxin F10, a single source that needs verification against the annual report.
• Sales model: direct sales + distribution; direct sales customers are enterprises with sow herds of over 5,000 head (requiring bidding); distributors use buyout sales, generally cash before delivery. In 2025, direct sales accounted for 67.57% and distribution 30.94% (gubit.cn/Tongdaxin F10 figure).
• Structural bargaining dynamics: downstream farming group concentration is rising, with bidding + credit terms, and farming enterprises have certain bargaining power over vaccine manufacturers (Forward five-forces analysis); during industry downturns, price competition is intense and homogeneous capacity is in oversupply. As a leader in non-mandatory-immunization swine vaccines, Keqian lacks strong pricing power over large downstream group customers.
• Gross accounts receivable balance: approximately RMB 451 million at end-2024 (bad debt provision ratio of about 25.78%), approximately RMB 363 million at end-2025 (provision ratio of about 21.35%); these absolute figures come from the annual report's accounts receivable notes, and the consolidated/parent-company scope could not be fully distinguished; it reached approximately RMB 399 million at end-H1 2025; refer to the latest annual report. Structure (end-2025, parent-company scope): receivables from direct sales customers approximately RMB 275 million (75.85%, provision of 6.01%); receivables from distribution customers only approximately RMB 12 million (3.44%, provision of 15.54%). The top five accounts receivable totaled approximately RMB 137 million, accounting for 37.68% of the accounts receivable balance. In 2025 a debt restructuring occurred: restructuring of receivables from Customer A and Customer B, with total bad debt provisions written off of RMB 28.9842 million (Customer A write-off of RMB 19.5208 million, Customer B write-off of RMB 9.4634 million). Assessment: the distribution side's cash-before-delivery makes receivables a very small share, while direct sales to large customers with credit terms makes receivables the bulk with a bad debt rate as high as 20%+, indicating that during downturns the accounts receivable risk mainly comes from large direct-sales farming customers, and the company is in a relatively unfavorable position in the working capital bargaining with downstream.
• Supplier side: in 2025 the top 5 suppliers' combined purchases accounted for 36.67% of total purchases (gubit.cn/Tongdaxin F10 secondary aggregation, single source, could not be cross-verified against the original annual report; refer to the latest annual report); customer side: in 2025 the top 5 customers' combined sales were RMB 229 million, accounting for 24.13% of operating revenue (same as above, single source, needs verification against the annual report). Industry concentration reference: at end-2024 there were 196 veterinary biological product enterprises nationwide; animal vaccine CR3 was about 22.14%, CR5 about 32%, CR7 about 42%, reflecting low industry concentration (Xinzhupai survey, Forward Industry Research Institute, 2023 data).

Keqian Biology sits toward the upper position between upstream R&D-driven, high-gross-margin biological product manufacturers and midstream farming service providers: its gross margin (60–70%) is far above the industry average (51.24% for the whole industry in 2024, China Veterinary Drug Association), but upstream are dispersed raw/auxiliary materials (moderate bargaining power) and downstream are farming groups with rising concentration and bargaining power (long receivables terms, bad debt rate of about 21–26%). In essence, it earns a technology premium through R&D — new products — product mix upgrades, rather than through upstream price squeezing or downstream channel strength. Whether the gross margin can continue to improve in the future depends on ① product mix upgrades driven by the ramp-up of high-end new products such as multivalent/multi-combination and Class 1 new drugs, ② incremental growth from new tracks such as pet vaccines and ruminant vaccines, and ③ process cost reduction; it does not rely on cost pass-through. During downturns its performance is highly synchronized with the hog farming cycle (2026H1 revenue -23.28%, net profit attributable to parent -47.37% is clear evidence).

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

The latest financial report is the 2026 interim report (disclosed 2026-08-26), with financial data as of 2026-06-30. 2026H1 recurring net profit attributable to parent was RMB 85.6968 million, down 54.89% year-on-year; Q2 alone recurring was RMB 16.2449 million, down 83.48% year-on-year. 2026H1 gross margin 59.42% (down 7.86pct year-on-year, Q2 alone gross margin 52.30%); net margin 30.69% (down 14.31pct year-on-year); diluted EPS RMB 0.248; weighted ROE 2.77% (down 2.6pct year-on-year); debt-to-asset ratio 10.68%; net operating cash flow RMB 116 million, down 33.54% year-on-year; R&D investment RMB 59 million, up 30.66% year-on-year, rising to 15.90% of revenue. Revenue structure (2026 interim report): veterinary biological products RMB 347 million (92.75% of revenue, down 24.83% year-on-year), others RMB 21 million (5.71%), other supplementary RMB 5.8 million (1.54%). Reasons for the earnings decline (consistently stated in multiple research reports): weak downstream hog farming conditions pressuring demand and prices; the applicable VAT rate for biological products rising from 3% to 13%; overcapacity and intensifying competition in the animal health industry. FY2025 and FY2024 data are consistent with stockanalysis.com's FY2025 Revenue 949.74M/Net income 418.72M. FY2024 net profit shows a difference between RMB 382.4 million (domestic figure) and RMB 375.08 million (S&P Capital IQ figure, via marketscreener), suspected to be a difference in attributable/consolidated scope or retrospective adjustment, a minor uncertainty; refer to the company's annual report. 2026Q1 data was only seen in second-hand citations from brokerage research reports/Securities Star and was not directly checked against the exchange's original text, but the values are consistent across multiple sources. Sources: East Money, Jiemian News, Caitong Securities 2026-08-29, Huaan Securities 2026-09-03, East Money F10 earnings forecast page, stockanalysis.com.

The company's 2026H1 results came under significant pressure, with revenue of RMB 374 million, down 23.28% year-on-year, net profit attributable to parent of RMB 116 million, down 47.37% year-on-year, and recurring net profit attributable to parent of RMB 85.6968 million, down 54.89% year-on-year, with the profit decline clearly larger than the revenue decline, mainly affected by a combination of factors including weak downstream hog farming conditions pressuring demand and prices, the applicable VAT rate for biological products rising from 3% to 13%, and overcapacity and intensifying competition in the animal health industry. Looking at Q2 alone, revenue was RMB 146 million, down 39.57% year-on-year; net profit attributable to parent was RMB 36.4871 million, down 67.32% year-on-year; recurring was RMB 16.2449 million, down 83.48% year-on-year, weakening further both sequentially and year-on-year, reflecting increased operating pressure in Q2. In terms of profitability, 2026H1 gross margin was 59.42% (down 7.86pct year-on-year), net margin 30.69% (down 14.31pct year-on-year), and weighted ROE 2.77% (down 2.6pct year-on-year), all falling markedly from the same period last year. Structurally, veterinary biological products revenue was RMB 347 million, accounting for 92.75% of revenue, down 24.83% year-on-year, the main source of the revenue decline. On the positive side, the company increased R&D investment against the cycle, with 2026H1 R&D investment of RMB 59 million, up 30.66% year-on-year, rising to 15.90% of revenue, helping to solidify long-term competitive advantages and position for new growth directions such as pet vaccines. The debt-to-asset ratio of 10.68% is at a low level, and net operating cash flow of RMB 116 million, though down 33.54% year-on-year, remains positive, reflecting a sound financial structure. Overall, the company's short-term results are doubly constrained by the industry cycle and the tax rate adjustment, and going forward attention should be paid to marginal improvements from a recovery in downstream farming conditions, the ramp-up of new vaccine products, and the pet vaccine layout.

3.2 Earnings Forecast

The above is the multi-institution consensus estimate (latest East Money F10 cross-section, as of about 2026-09-11): 2026E given by 12 institutions, 2027E by 12 institutions, 2028E by 11 institutions. Forecast ROE: 2026E 9.12%, 2027E 9.96%, 2028E 10.81%; net assets per share 2026E RMB 9.38. Important note: the previous month's forecast EPS on that page showed 2026E was once RMB 0.9227 and 2027E RMB 1.0645, meaning the consensus estimate had already been revised down after the interim report disclosure (0.9227→0.8642); an earlier cross-section showed 2026E at RMB 0.9036, 2027E at RMB 1.0491, and 2028E at RMB 1.2060, further confirming the downward revision trend. Individual brokerage forecasts (net profit attributable to parent, RMB 100 million): Western Securities 2026-09-06 forecast 2026E 3.39/2027E 3.94/2028E 4.46 (Buy); Caitong Securities 2026-08-28 forecast 3.29/3.96/4.71 (Buy); Pacific Securities 2026-06-15 forecast 3.91/4.37/4.94 (Buy); Huachuang Securities 2026-05-12 forecast 4.08/5.06/5.85 (target price RMB 17.60); Dongxing Securities 2026-05-05 forecast 4.34/5.21/5.90; Shenwan Hongyuan 2026-05-01 forecast 4.39/4.65/5.30; CITIC Securities 2026-04-16 forecast 4.22/5.07/5.71 (target price RMB 19.00); CICC 2026-04-10 forecast 2026E 4.36 (target price ≤ RMB 18.00, Outperform/Overweight); Sealand Securities 2026-04-09 forecast 2026E 4.22 (Buy); Kailuan Securities 2026-04-08 forecast 4.25/5.30/6.30+ (Buy). Key uncertainty: the new forecasts released after the interim report (late August–early September) are clearly lower (RMB 329–339 million), while the old forecasts from April–May cluster at RMB 420–440 million. The consensus "average over the past six months" blends old and new forecasts (RMB 398.4 million), which may overstate the current true expectation level; it is advisable to use the recent one month (Western, Caitong) figure of RMB 330–340 million as the upper-bound reference. Sources: East Money F10, Tonghuashun, Securities Star research report express/Pacific Securities research report, Western Securities research report.

3.3 Valuation Levels and Institutional Ratings

As of the 2026-09-11 close, Keqian Biology's share price was RMB 12.48, down 2.12% on the day, total/float market cap RMB 5.817 billion (fully floated, total share capital 466.1 million shares). Valuation multiples: PE(TTM) 18.49x (consistent across Sina, East Money, Cailian Press), PE(static) 13.89x, PE(dynamic) 25.13x, PB 1.44x, P/S (TTM) 6.96x; 52-week high RMB 18.13/52-week low RMB 11.65. Based on consensus forward PE: about 14.4x for 2026E, about 12.4x for 2027E, about 10.8x for 2028E (calculated using RMB 12.48/corresponding EPS). On valuation percentiles (third-party model, price basis is somewhat stale, for reference only): the Securities Star tool page shows PB of about 1.62 at the 5.07% percentile since listing and PE of about 16.44 at the 6.51% percentile, with a DCF fair value of about RMB 13.79 — the page's current price of RMB 14.88 is an old snapshot, inconsistent with the September 11 price of RMB 12.48, and is for directional reference only. Note: the institutional consensus blends newly released post-interim forecasts (RMB 330–340 million) with old forecasts from the annual report/Q1 report period (RMB 420–440 million); the average of RMB 398.4 million may be on the high side, and if calculated using the recent lower forecasts of RMB 330–340 million, the 2026E dynamic PE would be above the aforementioned 14.4x, and the valuation margin of safety should be judged prudently in light of earnings downgrade risk. All prices and valuation multiples are snapshots as of the 2026-09-11 close, with financial data as of 2026-06-30. Sources: Sina Finance, East Money, Cailian Press, stcn, Securities Star tool page.

4. Recent News and Announcements

4.1 Keqian Biology's 2026 First Extraordinary Shareholders' Meeting Resolutions Approved

Keqian Biology's 2026 first extraordinary shareholders' meeting reviewed and approved two proposals, with the share repurchase and cancellation proposal receiving 98.91% approval and the registered capital change proposal receiving 99.18% approval. The relevant announcements were released in September 2026, along with the legal opinion of Beijing Jiayuan Law Firm on this extraordinary shareholders' meeting.

4.2 Keqian Biology Plans to Repurchase and Cancel 2025 Employee Stock Ownership Plan Shares and Notify Creditors

Keqian Biology issued an announcement on the repurchase and cancellation of 2025 employee stock ownership plan shares and notification to creditors; the proposal was reviewed and approved at the 2026 first extraordinary shareholders' meeting, with the share repurchase and cancellation proposal receiving 98.91% approval.

4.3 Keqian Biology 2026 Interim Results Briefing Announcement

Keqian Biology issued an announcement on its 2026 interim results briefing; the specific holding time, participating personnel, and exchange content minutes were not detailed in the research notes.

4.4 Keqian Biology's 2026 First-Half Net Profit RMB 116 Million, Down 47.37% Year-on-Year

Keqian Biology's 2026 interim report shows first-half operating revenue of RMB 374 million, down 23.28% year-on-year; net profit attributable to parent of RMB 116 million, down 47.37% year-on-year; financial expenses up 39.87% year-on-year. Operating pressure was mainly affected by the downstream farming downturn and weak demand, but the company increased R&D investment against the cycle.

4.5 Keqian Biology's Recent Main Capital Flows

On September 11, 2026, Keqian Biology's main capital saw net buying of RMB 2.7881 million; the share price fell 2.35% this week, with main capital net inflow totaling RMB 1.5527 million.

4.6 Keqian Biology Institutional Research Views

Multiple institutions issued research reports noting that Keqian Biology's short-term results are under pressure due to the downstream farming downturn and weak demand, but R&D investment increased against the cycle, and they recommend paying attention to the growth potential of new vaccine products.

4.7 Shareholder Dynamics and Reduction/Repurchase Plans

The research notes mention that the latest shareholder dynamics and reduction/repurchase plans were searched, involving holding analyses of shareholders Jin Meilin, Chen Huanchun, and Wuhan Huazhong Agricultural University Asset Management Co., Ltd., but no detailed data such as specific increase/decrease quantities, proportions, or amounts were provided.

5. Share Price Trend and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

As of the 2026-09-11 close, Keqian Biology (688526.SH) closed at RMB 12.48, down 2.12%, with turnover of RMB 19.4629 million and a turnover rate of only 0.33%, a typical low-liquidity small-cap stock. The price is below both the 50-day (RMB 12.88) and 200-day (RMB 14.48) MAs and clearly below the chip cost average (RMB 14.84), with considerable trapped-position pressure above. MACD crossed below the 0 axis with both lines on 09-07, RSI(14) at 46.92 is in the neutral-to-weak zone with a death cross on 09-10, and the daily "bear point" since 08-27 remains unresolved, so short-term bearish momentum has not yet exhausted. On the capital side, main capital (super-large + large orders) saw net inflow of +RMB 2.7881 million on 09-11, but the 5-day total is only about +RMB 1.55 million, essentially offsetting, with an unclear direction; the margin financing balance of about RMB 167 million is at a one-year high, while the short-selling balance is extremely small. The shareholder structure is highly concentrated in the founding team/university asset platform (top ten totaling about 73.89% as of 2026-03-31; the top ten float shareholders' holdings were basically unchanged as of 2026-06-30), institutions are mainly passive index funds with low active public fund participation, free float is on the order of about 24%, and combined with the low 0.3% turnover, daily trading is thin, the order book is shallow, and slippage risk is relatively high. Combining technical and capital factors, the stock is in a weak consolidation pattern in the short term, and the direction choice still awaits confirmation from volume and key levels.

5.3 Short-Term Outlook (Next Week, Scenario Projection, for Reference Only)

⚠️ Risk warning: the following content is merely a subjective scenario projection based on historical prices, technical indicators, and capital data; the listed "weights" are empirical subjective judgments, not statistical probabilities, and certainly do not constitute any buy or sell advice.

① Key Technical Levels

② Next-Week Scenarios (Subjective Weights, Not Statistical Probabilities)

• Scenario A: Weaker downside (relatively high subjective weight, about 40% (empirical subjective judgment, not statistical probability)): MACD crossed below the 0 axis with both lines on 09-07, RSI death-crossed below 50 on 09-10, the daily "bear point" since 08-27 remains unresolved, and the price is below the chip cost average, so bearish momentum has not yet exhausted. Trigger conditions: an intraday effective break below 12.42–12.44 without volume contraction versus the recent monthly average (about RMB 23 million) could lead to a rapid probe of the strong support zone of 11.9–12.1; if strong support is breached, the direction points to the 52-week low of 11.65.
• Scenario B: Range consolidation (moderate subjective weight, about 40% (empirical subjective judgment, not statistical probability)): the 5-day main capital figures are essentially offsetting (about +RMB 1.55 million), with no one-sided capital direction, and turnover continues at extremely low levels (<RMB 25 million), so the price will likely oscillate repeatedly within the 12.4–13.0 box. Trigger conditions: no new news, turnover maintained around RMB 20 million, and the price consolidating narrowly between 12.4 and 12.9.
• Scenario C: Rebound and strength (relatively low subjective weight, about 20% (empirical subjective judgment, not statistical probability)): if the farming/animal health sector strengthens overall, or company-level catalysts emerge (such as African swine fever vaccine progress, pet vaccine approval, repurchase and cancellation announcements), combined with the main capital (super-large + large orders) net inflow already seen on 09-11, a short-term rebound could be triggered. Trigger conditions: volume expansion (turnover expanding to above RMB 35 million) and a firm hold above 12.9–13.0, with the rebound target pointing to the 13.5 area above; but note the medium-term MA and chip cost pressure in the 14.48/14.84 area.

③ Capital and Liquidity Background

On turnover rate, 09-11 was 0.33%, and typical daily turnover in recent months was mostly in the low range of 0.19%–0.38% (e.g., 0.38% on 05-27, 0.19% on 05-29, 0.24% on 08-12); on turnover value, recent single-day levels were roughly between RMB 11 million and RMB 24 million (RMB 11.6831 million on 05-29, RMB 23.6397 million on 05-27, RMB 19.9544 million on 09-07, RMB 19.4629 million on 09-11), with the 20-day average volume at about 1.871 million shares, equivalent to an average daily turnover of about RMB 23 million. On capital, main capital (super-large + large orders) saw net inflow of +RMB 2.7881 million (+14.33%) on 09-11, but the 5-day total is only about +RMB 1.55 million, with an unclear direction; the margin balance is about RMB 167 million (about 2.87% of float market cap, at a one-year high), and the short-selling balance is extremely small (about RMB 475,000). On shareholder concentration (lagged data, be sure to note the timeliness): the top ten shareholders are almost entirely the founding team/university asset platform (top ten totaling about 73.89% as of 2026-03-31, disclosed on 2026-04-30; the top ten float shareholders' holdings were basically unchanged as of 2026-06-30, disclosed on 2026-08-27), institutions are mainly passive index funds with low active public fund participation (about 75 public funds holding only about 3.0581 million shares as of 2026-06-30, about 0.66% of float A shares), no significant presence of long-term institutions such as social security funds or QFIIs is seen, and free float is on the order of about 24%; the above shareholder/institutional data are as of 2026-03-31 and 2026-06-30 respectively, with the latest disclosure lagging 2–5 months, during which the chip structure may have changed; for the latest data, refer to the company's latest periodic report. In summary, low turnover + low free float + shallow order book mean that at support levels of 12.4 and below, there may be two-way extremes of "volume-less decline/amplified slippage" or "rapid rebound on small buying," with poor quote and trade stability, and it is not appropriate to project using large-cap liquidity assumptions.

Volume confirmation signal: using the stock's own recent norm (daily turnover of about RMB 20 million, turnover rate 0.3%) as the baseline — if a single day's turnover continues to expand to above RMB 35 million (equivalent to a turnover rate rising above 0.6%) and the price simultaneously holds above 12.9–13.0, this can be regarded as a confirmation signal of actual capital entry; conversely, if turnover remains below RMB 15 million when the price breaks below 12.4, it is mostly a low-volume drift lower, with low directional confirmation.

④ Points to Watch (Observation Ideas Only, Not Trading Instructions)

• Watch the closing validity of the two boundaries of 12.42–12.44 (first support) and 12.9–13.0 (short-term resistance), and whether a break below/above is accompanied by turnover expansion (observation idea, not a trading instruction).
• Watch the 52-week low of RMB 11.65, the lower edge of the box; if strong support of 11.9–12.1 is breached, simultaneously watch whether volume expands (observation idea, not a trading instruction).
• Watch volume signals: whether single-day turnover can expand to above RMB 35 million and whether the turnover rate rises to 0.6%, as a verifiable reference for whether capital is truly entering (observation idea, not a trading instruction).
• Watch whether MACD forms a golden-cross repair below the 0 axis, whether RSI can return above 50, and the traction on the stock from company-level announcements/catalysts (repurchase and cancellation, employee stock ownership plan, responses to inquiries related to the African swine fever vaccine, etc.) and overall capital flows in the farming/animal health sector (observation idea, not a trading instruction).

The above scenario projection is based on the 2026-09-11 closing data and historical prices and technical indicator calculations; short-term share prices will also be disturbed by multiple factors such as news, capital flows, and the broader market environment. Technical indicators themselves have lag and limitations, do not guarantee future actual trends, and do not constitute buy or sell advice. Please make independent judgments based on the latest market information and bear investment risks yourself.

6. Industry Landscape and Competitor Analysis

6.1 Industry Status

China's veterinary biological products industry has low growth (2018–2024 sales scale CAGR of only 2.49%) and low concentration (animal vaccine CR3 about 22.14%, CR5 about 32%, CR7 about 42%, 2023 data); during industry downturns, price competition is intense and homogeneous capacity is in oversupply. Keqian Biology is a domestic leader in non-state-mandatory-immunization veterinary biological products, with the largest domestic share in swine pseudorabies vaccines for many consecutive years.

6.2 Competitive Landscape

• Industry size and structure (China Veterinary Drug Association data, cited from the company's annual report): as of end-2024, there were 196 veterinary biological product enterprises nationwide, 2,255 valid product approval numbers, and 22,700 employees.
• Full industry in 2024: sales of RMB 15.401 billion, gross output value of RMB 17.206 billion, gross profit of RMB 7.892 billion, average gross margin 51.24%, total assets RMB 61.692 billion; 2018–2024 sales scale CAGR of only 2.49% (low growth).
• By animal species in 2024: poultry RMB 6.600 billion (42.85%), swine RMB 5.978 billion (38.82%), cattle and sheep RMB 1.854 billion (12.04%).
• Competitive tiers/shares (Xinzhupai survey, Forward Industry Research Institute, 2023 data): Yebio 8.8%, China Animal Husbandry 7.7%, with Ringpu Biology, Keqian Biology, China Animal Husbandry, and Tecon Biology all in the 5%–6% range; animal vaccine CR3 about 22.14%, CR5 about 32%, CR7 about 42%, reflecting low industry concentration. From 2015 to 2022, the share of non-mandatory-immunization products in veterinary biological products rose from 40% to 69.16%.
• Keqian's market position (company's own statements, 2024 interim report and subsequent annual reports): ranked second in sales revenue in the non-state-mandatory-immunization veterinary biological products market from 2018 to 2023; ranked first in sales revenue in the non-state-mandatory-immunization swine biological products market. Ranked first domestically in swine pseudorabies vaccine market share for eight consecutive years from 2016 to 2023; ranked first domestically in market share for swine mycoplasma pneumonia vaccines and swine gastroenteritis/diarrhea combination vaccines for five consecutive years.
• 2025 (AskCI Consulting figure): swine pseudorabies vaccine market share over 30%, listed as a leader in non-mandatory vaccines.

6.3 Main Competitors

Keqian Biology centers on high-gross-margin non-mandatory-immunization swine vaccines (gross margin significantly above the industry average of 51.24% and the comparable company average of about 54–57%, as demonstrated in the company's 2023 review inquiry response), ranking first in the non-mandatory-immunization swine vaccine sub-segment; however, relative to full-category leaders such as Yebio and China Animal Husbandry, its revenue scale is relatively small and its products are concentrated in swine vaccines, with downstream being increasingly concentrated farming groups and upstream being dispersed raw/auxiliary material suppliers, so its bargaining power on both the upstream and downstream ends is not prominent, its performance is highly synchronized with the hog farming cycle, and it fluctuates more during industry downturns.

7. Risk Warnings

• Risk of weak downstream hog farming conditions: 92.75% of the company's revenue comes from veterinary biological products (2026 interim report), with customers mainly large farming groups such as Muyuan Foods, Wens Foodstuff Group, New Hope, and Yangxiang Group as well as small and medium-sized farmers; performance is highly synchronized with the hog farming cycle, with 2026H1 revenue -23.28%, net profit attributable to parent -47.37%, and recurring -54.89%; if farming conditions remain weak, the company's demand and prices will continue to come under pressure.
• Risk of continued erosion of profitability from the VAT rate increase: the applicable VAT rate for biological products rose from 3% to 13%, directly suppressing gross and net margins; 2026H1 gross margin 59.42% (down 7.86pct year-on-year), falling further to 52.30% in Q2 alone, and net margin 30.69% (down 14.31pct year-on-year); the tax rate factor's impact on profit is persistent and non-operating in nature.
• Risk of accounts receivable and collection from large direct-sales customers: the gross accounts receivable balance at end-2025 was about RMB 363 million, of which receivables from direct sales customers were about RMB 275 million, accounting for 75.85%, with a bad debt provision ratio of about 21–26%; in 2025 a debt restructuring already occurred for receivables from Customer A and Customer B, with total bad debt provisions written off of RMB 28.9842 million (Customer A write-off of RMB 19.5208 million, Customer B write-off of RMB 9.4634 million), and the top five accounts receivable totaled about RMB 137 million, accounting for 37.68% of the balance; during downturns, collection and bad debt risks from large customers are prominent.
• Risk of customer concentration and insufficient bargaining power: in 2025 the top 5 customers had combined sales of RMB 229 million, accounting for 24.13% of operating revenue (Customer 1 at 5.89%, Customer 2 at 5.62%), with direct sales at 67.57% and distribution at 30.94%; rising downstream farming group concentration plus bidding and credit terms leave the company lacking strong pricing power over large group customers, and the top five customer share data comes from a single second-hand source, gubit.cn/Tongdaxin F10, and needs verification against the latest annual report.
• Risk of intensifying industry competition and low concentration: at end-2024 there were 196 veterinary biological product enterprises nationwide and 2,255 valid product approval numbers, with animal vaccine CR3 about 22.14%, CR5 about 32%, and CR7 about 42%, reflecting low industry concentration; 2018–2024 sales scale CAGR was only 2.49%, and during downturns price competition is intense and homogeneous capacity is in oversupply; relative to full-category leaders such as Yebio and China Animal Husbandry, the company has a smaller revenue scale and concentrated products, limiting its ability to withstand price wars.
• Risk of consensus earnings downgrades and confusing valuation measures: post-interim reports from Western Securities (2026-09-06) forecast 2026E net profit attributable to parent of RMB 339 million and Caitong Securities (2026-08-28) forecast RMB 329 million, clearly below the old forecasts of RMB 420–440 million from April–May; East Money F10's consensus "average over the past six months" of RMB 398.4 million blends old and new forecasts; if calculated using the recent lower forecasts, the 2026E dynamic PE would be above the static figure of about 14.4x, and earnings misses could trigger further downgrades and valuation compression.
• Risk that new products and new tracks underperform expectations: the company's expansion directions such as pet vaccines, ruminant (cattle and sheep) animal vaccines, diagnostic reagents, and probiotics, as well as high-end new products such as multivalent/multi-combination and Class 1 new drugs, are key assumptions for gross margin improvement (from 65.07% in 2024 back up to 70.66% in 2025) and medium- to long-term growth; if new product approvals, ramp-up progress, or the competitive landscape of new tracks fall short of expectations, the growth logic will be difficult to realize.
• Risk of data source and scope uncertainty: data such as the top 5 suppliers' purchase share of 36.67% and the top 5 customers' sales share of 24.13% come from the gubit.cn/Tongdaxin F10 secondary aggregation page and could not be cross-verified against the original annual report; the company's end-2025 accounts receivable consolidated/parent-company scope could not be fully distinguished; FY2024 net profit shows a difference between RMB 382.4 million (domestic figure) and RMB 375.08 million (S&P Capital IQ figure); for related data refer to the company's latest annual report.

8. Conclusion and Outlook

From a growth logic perspective, the company's core highlights are: first, a solid leadership position in the non-mandatory-immunization swine vaccine sub-segment, ranking first domestically in swine pseudorabies vaccines for many consecutive years with a market share of over 30% in 2025, with variety and R&D barriers; second, the ramp-up of high-end new products such as multivalent/multi-combination vaccines and Class 1 new drugs is expected to drive product mix upgrades, with gross margin recovering from 65.07% in 2024 to 70.66% in 2025, demonstrating the supportive role of mix upgrades on gross margin; third, the layout in new tracks such as pet vaccines, ruminant vaccines, diagnostic reagents, and probiotics, together with 2026H1 R&D investment up 30.66% year-on-year and rising to 15.90% of revenue, reserves incremental growth for the medium to long term. In addition, the company's debt-to-asset ratio is only 10.68% and operating cash flow is positive, giving it the financial resilience to ride through cycles.

From a risk perspective, the company's performance is highly synchronized with the hog farming cycle, as evidenced by 2026H1 revenue -23.28% and net profit attributable to parent -47.37%; whether it can improve in the short term depends on a recovery in downstream farming conditions, the ramp-up of new vaccine products, and the absorption of the tax rate adjustment impact. On the channel side, the top 5 customers had combined sales of RMB 229 million in 2025, accounting for 24.13% of revenue, with direct sales at 67.57%, and large farming groups have certain bargaining power through bidding and credit terms; on the receivables side, the gross accounts receivable balance at end-2025 was about RMB 363 million, of which receivables from direct sales customers were about RMB 275 million, accounting for 75.85%, with a bad debt provision ratio of about 21–26%, and in 2025 a debt restructuring occurred with total bad debt provisions written off of RMB 28.9842 million, indicating collection risk from large customers during downturns.

At the industry level, China's veterinary biological products industry had a 2018–2024 sales scale CAGR of only 2.49%, with animal vaccine CR5 at about 32% and low concentration; the whole industry's average gross margin in 2024 was 51.24%, and during industry downturns price competition is intense and homogeneous capacity is in oversupply. Relative to full-category leaders such as Yebio and China Animal Husbandry, the company has a smaller revenue scale and products concentrated in swine vaccines, with no prominent bargaining power on either the upstream or downstream end. On valuation, if calculated using the lower post-interim forecasts (RMB 330–340 million), the 2026E dynamic PE would be above the consensus figure of about 14.4x, and the margin of safety should be judged prudently in light of earnings downgrade risk.

Data Sources

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• Keqian Biology - Receivable Customer B | 8,750,261.93 | Debt restructuring | Cash recovery | Debt restructuring not yet carried out when the original bad debt provision was made
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• Keqian Biology: Wuhan Keqian Biology Co., Ltd. 2025 Audit Report_Jiufang Zhitou - distribute profits based on the shares in ... to all shareholders a cash dividend of RMB 6.4 per 10 shares (tax included)
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