Technology as the source, more than innovation, the company's development into the fast lane. Founded in 2009, based on the core endowment of gene editing, we developed a variety of special model mice, and established a comprehensive pharmacological platform in 2015 to combine the advantages of animal models to start preclinical research and services; at the same time, actively extend to the downstream field of innovative drug research and development, established Youhe Medicine in 2016, cut into innovative drug research and development, and put into operation Haimen Animal Center in the same year, with an annual production capacity of 800000 mice. Based at home and abroad, the company established BiocytogenBoston Corp in 2018 to expand its business in the United States and started the process of internationalization; in 2019, it developed mega-base scale chromosome editing technology and released a fully humanized mouse model, which once again strengthened its competitiveness in the industry; in 2020, it put forward the plan of "thousands of mice" for the first time, which is still in steady progress; in 2021, a number of innovative pipelines made breakthroughs in clinical progress. Successfully listed on Hong Kong stocks in September 2022.

Three major gene editing techniques to create an independent development of all-human antibody transgenic mouse platform RenMice. Bai Oseatu has developed powerful gene editing platforms SUPCE, CRISPR/EGE and ESC/ HR. Compared with other common gene editing techniques that can only edit gene fragments of less than 30000 bases at a time by using plasmids, the proprietary SUPCE technology developed by the company can achieve chromosome editing on the scale of millions of bases with high stability and repeatability. The RenMice platform includes two all-human transgenic mouse platforms RenMab and RenLite. RenMab mice can produce a rich antibody library, have a complete and powerful immune response similar to that of wild mice, and can also carry out drug target knockout.

RenLite mice can be used to produce a variety of bispecific antibodies with high affinity and bispecific ADC, which can perfectly solve the mismatch between light chain and heavy chain in bispecific antibody platform, thus greatly reducing the difficulty of CMC process development.

Thousands of mice, unique and innovative large-scale antibody drug discovery program. Biosetto plans to complete the development of antibodies with more than 1000 potential targets in the next three to five years, from which hundreds of PCC antibody molecules are expected to be found. By the last feasible date of the prospectus, Byosaitu has knocked out more than 980 targets according to the ten-thousand-mouse antibody plan, of which more than 280 targets have entered the antibody immunization stage and more than 40 targets have entered the molecular screening stage. There are three modes of cooperation among our partners, namely, general co-development, intellectual property co-development and antibody discovery services licensed under RenMice, which authorizes the transfer of potential therapeutic antibody molecules to partners or cooperates with them to generate revenue from the antibody development division. As of June 2022, the company has cooperated / transferred 28 antibody molecules, including 6 new partners and 11 new antibody transfer / cooperative development from January to June 2022.

Preclinical CRO business: steady growth in three major sectors. Preclinical pharmacological efficacy evaluation income accelerated. From 2020 to 2021, the company's preclinical pharmacological efficacy evaluation income was 0.75 yuan and 106 million yuan respectively, up 40.11% from the same period last year. 65 million yuan in the first half of 2022, an increase of 49.22% over the same period last year; gross profit margin rose steadily, with gross profit margins of 64.60% and 65.30% in 2020-2021 rising to 69% in the first half of 2022. Model animal revenue maintained a high growth rate. From 2020 to 2021, the company's model animal sales revenue was 0.66 yuan and 108 million yuan respectively, an increase of 63.09% year-on-year growth of 73 million yuan in the first half of 2022, an increase of 63.72% over the same period last year. Gross profit margin remained basically stable, with gross profit margins of 72.20% and 76.60% respectively in 2020-2021 and 75.00% in the first half of 2022. The gene editing business was adjusted by strategy, and the income growth rate fluctuated. From 2020 to 2021, the company's gene editing income was 0.69 yuan and 51 million yuan respectively, down 25.75% from the same period last year. 29 million yuan in the first half of 2022, an increase of 24.90% over the same period last year. The main reason is that the company has strategically shifted its gene editing capabilities to internal research and development in order to accelerate its strategy of finding antibodies and focusing on finding antibodies. The gross profit margin remained basically stable, with a gross profit margin of 47.30% and 46.90% in 2020-2021 and 44.00% in the first half of 2022.

Profit forecast and valuation suggestion: we use the segment valuation method. We value the preclinical CRO business at 5.3 billion yuan in 2022, the antibody development business at 3.5 billion yuan, the self-developed pipeline business at 3 billion yuan, and the preclinical CRO, antibody development and self-developed pipeline business with a combined valuation of 11.8 billion yuan, calculated at the exchange rate of RMB to HK $1.1031. We give the hundred Olympic Games a list price of HK $32.59, which is 25.34% higher than the company's closing price of HK $26.00 on December 1, 2022, and is rated as "better than the market" for the first time.

Risk hint: industry competition aggravates risk, pharmaceutical investment and financing magnanimity, overseas cost rising risk, technology iteration risk, persistent loss and short-term cash dividend risk.