occurrences

On April 25, 2023, the company released its quarterly report for 2023. 1Q23's revenue was 92.4 million yuan, an increase of 169.06% over the previous year; the net profit returned to/after deducting non-net profit was 5503/47.8 million yuan, an increase of 78.98%/106.73% over the previous year. The performance was in line with expectations.

reviews

Paclitaxel micellar is included in the guidelines, and sales are about to accelerate. (1) Compared with 34.34 million in 1Q22, 1Q23 sold nearly 100 million yuan of paclitaxel polymer micelles in a single quarter. After deducting non-net profit, the increase was determined. (2) Since its launch in October 2021, the product has been included in a number of authoritative diagnosis and treatment guidelines: on April 24, 2023, it received Level I recommendation from the “Chinese Society of Clinical Oncology (CSCO) Non-small Cell Lung Cancer Diagnosis and Treatment Guidelines (2023)”. We believe that as more guidelines are recommended, product influence and in-hospital sales are expected to increase and accelerate.

R&D has been strengthened, pipelines are abundant, and growth momentum is sufficient. (1) The company has carried out more than 20 phase II/III clinical trials for the core product paclitaxel polymer micelles. The cancers involved include breast cancer, lung cancer, pancreatic cancer, stomach cancer, bile duct cancer, colorectal cancer, esophageal cancer, head and neck cancer, and ovarian cancer. Among them, the expanded indication phase III trial for breast cancer and the phase III trial for advanced lung squamous cell carcinoma, combined PD-1 (treprilizumab) and white purple combined with PD-1 have all been approved for clinical trials.

(2) The company is also developing two types of targeted paclitaxel polymer micelles. One is a targeted PMC (targeted peptide-coupled nanocicular) drug developed for the treatment of pancreatic tumors; the other is a targeted AMC (targeted small molecule coupled nanomicular) drug developed for the treatment of prostate tumors and pancreatic tumors. The two drugs greatly increase the concentration of the drug in tumor tissue by modifying targeted peptides or small molecules on the surface of paclitaxel nanomicelles and through an actively targeted nanopharmaceutical delivery system to enhance the efficacy.

Production capacity is ready, and paclitaxel levels are sustainable. (1) In terms of capacity construction, the new production line set up in the company's existing plant has completed all hardware construction, with an annual production capacity of 1 million paclitaxel polymer micelles for injection. It is expected that it will be officially commercialized in mid-2023. As the company advances in the fund-raising project for 5 million paclitaxel polymer supporting facilities, product marketing demand will be guaranteed with sufficient production capacity. (2) Product commercialization continues to advance. The company has its own sales team of more than 120 people, and paclitaxel micelles have been successfully installed on the Internet in 27 provinces and cities across the country. We believe that as the product enters the authoritative clinical guideline recommendations and other catalysts accelerate admission to hospitals, the addition of the in-hospital sales market will accelerate the company's sales growth compared to the previous sales market dominated by DTP pharmacies.

Profit Forecasts, Valuations, and Ratings

We maintain our profit forecast. The revenue for 2023/24/25 is estimated to be 498/8,66/1,353 million yuan, an increase of 111%/73%/57% over the previous year; the net profit of the mother was 3.04/558/896 million yuan, an increase of 112%/84%/61% over the previous year. Maintain a “buy” rating.

Risk warning

Risks such as reliance on a single product, failure to meet expectations in commercialization, and reduction in holdings by major shareholders.