Zai Lab Limited (ZLAB): A Bull Case Theory 

We came across a bullish thesis on Zai Lab Limited on Value investing subreddit by  mrmrmrj. In this article, we will summarize the bulls’ thesis on ZLAB. Zai Lab Limited’s share was trading at $30.00 as of September 4th.

Zai Lab (ZLAB), a $3.3B market cap Chinese pharmaceutical company, is growing revenues at 40%+ and positioned to benefit from the country’s rapidly aging demographics. With China expected to undergo a 30-year “old age” shift, demand for widely used medicines is set to accelerate. ZLAB has secured licenses from leading U.S. and European pharmaceutical companies to distribute some of the most established drugs in China, giving it exclusive rights to supply treatments that are already standard of care in Western markets.

While drug pricing is tightly regulated by the Chinese government, which gradually lowers prices as sales volumes rise, the trade-off is continued volume growth across a massive population, particularly the 300 million people already over the age of 60. This ensures ZLAB will not reach gross margins comparable to Western peers like Merck but provides enormous revenue scalability. The company’s licensed portfolio is expected to expand further with government support, as it maintains both the regulatory approval and financial capacity to pursue additional deals with global pharma giants.

Despite not appearing cheap on conventional value metrics, ZLAB’s compounding growth potential positions it as a long-term winner in the Chinese healthcare market. Revenues have already surged from $145 million in 2021 to an estimated $900 million next year, while the company previously traded at $150 per share during the COVID boom. With strong structural tailwinds, ZLAB is seen by bulls as a potential $30B pharmaceutical champion in China and a 10–15x investment opportunity over time.

Previously we covered a bullish thesis on Teva Pharmaceutical Industries Limited (TEVA) by Kontra in May 2025, which highlighted the company’s shift toward innovative drug development, strong generics base, and operational efficiency. The company’s stock price has appreciated approximately by 11% since our coverage. The thesis still stands as Teva advances its dual-engine model. Zai Lab Limited (ZLAB) shares a similar focus but emphasizes growth opportunities in the Chinese market and licensing strategy.

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Disclosure: None.