Company profile: Dongyao Pharmaceutical is a clinical-stage biopharmaceutical company that develops and commercializes innovative oncology drugs and therapies. The company has a comprehensive portfolio of oncology drugs under development for various types of cancer, including various mAbs, ADCs, oncolytic viral drugs, and specialty oncology drugs (such as liposomal drugs). Currently, we have a product portfolio that includes 12 drugs under development, including four clinically active biopharmaceuticals, one ongoing chemical that has been submitted to ANDA, and two ongoing chemistries currently undergoing CMC and BE research. Sino-Thai view: The market demand for bevacizumab antibiotics is strong: the number of cancer cases in China is expected to reach 4.9 million in 2023, and many biologics (such as mAbs) have been shown to have excellent efficacy in cancer treatment. Tubal endothelial growth factor (or VEGF) is a growth factor protein that induces blood vessel growth, and bevacizumab is an anti-VEGF MAb commonly used to treat cancer. Avastin has always been the most widely used anti-VEGF MAB drug. The approved indications in China are mCRC and nsNSclc. The total number of cases of these two indications was 625,000 in 2018, and is expected to increase to 709,000 in 2023. Avastin's patent will expire in 2019, and bevacizumab antibiotic analogues are expected to enter the market and promote rapid market growth. Dongyao Pharmaceutical's fastest-developing core product, TAB008, is a biosimilar of bevacizumab. Phase III clinical trials for indications of non-squamous non-small cell lung cancer (nsNsCLC) are ongoing. A marketing application was submitted in March-April 2020, and launched from the end of 2020 to the beginning of 2021. Currently, its production facility in Suzhou has a design capacity of 16,000 litres. Among them, a 2,000-liter bioreactor is used to produce TAB008 samples. After approval, it can be produced directly, and a sales team has been established. The production scale will be increased further in the future. In terms of business performance: In the 2017-2018 fiscal year and the four months ending 2019, the company received revenue of 51.61 million yuan, 39.22 million yuan and 18.16 million yuan respectively. The revenue was due to various arrangements of strategic business partners, including (1) commercialization of S-1 (Dapeng Pharmaceutical's oncology drug), (2) provision of CDMO and CMO services to biotechnology companies (3) licensing for the development and commercialization of TAB014. The company currently has no commercialized products, so it has not received any revenue from drug sales as of April 30, 2019. There was a loss of 100 million yuan; R&D expenses accounted for 64.8%, 65.5% and 52.3% of total operating expenses respectively. Generally, the cost of phase III clinical trials is much more expensive than previous trials. Therefore, in the future, the company will promote clinical trials of TAB008 and conduct additional clinical trials on more drugs under development, and R&D expenses will increase dramatically. In terms of valuation: Based on the share capital of 570 million dollars after the global public sale, the company's market value is HK$3.73 billion to HK$3.3 billion, which is lower than that of its Hong Kong stock peers. Since the company is not yet profitable, the PE valuation law does not apply. In terms of cornerstone, Shengde Pharmaceutical Company, Vivo Capital, and the Nian Xing Virgin Islands have invested a total of 20 million US dollars. Based on the minimum price, nearly 25% of the shares issued this time are subscribed. Compared to the unprofitable biomedical company Kishi Pharmaceutical (2616 HK), which focuses on oncology drug research and development in Hong Kong stocks, has a market value of HK$10.5 billion, Junshi Biotech (1877 HK) has a market value of HK$22 billion, and Dongyao Pharmaceutical is too small. Furthermore, its core product, the anticancer drug TAB008, and IBI305 of the previously listed Cinda Biotech (1801 HK) are similar drugs. Both companies have an advance layout in terms of production capacity and sales channels. Once future drugs are approved, priority can be given to market dividends. Consider Cinda Biotech (H01) H01 (H01) The stock price performed excellently after listing. Based on the company's position and performance in the industry, we gave it a score of 65 and rated it as a “subscription”. Risk warning: (1) Market competition risk (2) The company is in the midst of losses and revenue is still unstable (3) R&D progress falls short of expectations and results are uncertain