The share of innovation has reached a new high, and the cost rate has been steadily declining. The company issued a performance announcement for the 2023 semi-annual report: revenue of 3.379 billion yuan (YoY +25.2%, the following are all year-on-year), mainly due to the rapid release of innovative drugs. Revenue from innovative drugs was 2,413 billion yuan (+36.6%), accounting for 71.4%, breaking a new high. R&D, sales, and management expenses were 776 million yuan (+19.1%), 1,247 million yuan (+21.2%), and 257 million yuan (+36.2%), respectively. The cost rates were 23.0%, 36.9%, and 7.6%, respectively, with a steady decline. Net profit related to operations was 395 million yuan (+0.4%).
Cornerstone innovative drugs continue to be released, and income from cancer self-exemption has risen sharply. By sector: Revenue from the neurological system sector was 1,055 million yuan (-1.5%), accounting for 31.2% of total revenue, mainly affected by the price reduction of Xianbixin injection; revenue from the oncology sector was 783 million yuan (+34.8%), accounting for 23.2%, mainly due to the 51% year-on-year increase in Endo sales; revenue from the self-exemption sector was 659 million yuan (+30.0%), accounting for 19.5%, mainly due to the year-on-year increase in Edxin; revenue from other fields was about 882 million yuan (+63.0%), accounting for 26.1%, mainly driven by the amount of Xianoxin.
Self-developed BD dual drive, the pipeline continues to be enhanced in the later stages. (1) Tumors: The NDA for ES-SCLC patients used by Cosela for second-line chemotherapy has been accepted by the CDE, and the company has submitted a real estate application, which will further reduce production costs; it was announced on August 20 that the company has obtained commercialization rights for CMAB009 in mainland China from Maibo Pharmaceutical, and the NDA has also been accepted by the CDE; phase III of suvicitazumab has reached LPI and is expected to be NDA next year; (2) Non-tumors: First, the NDA under the tongue has been accepted by CDE for treatment of ischemic stroke; Idorsia introduced Daly Rayson, It is the only DORA type of insomnia drug approved by EMA to improve daytime function, and is expected to receive an NDA next year.
Profit forecasts and investment recommendations. The company's EPS is expected to be 0.49/0.55/0.63 yuan/share in 23-25, respectively. The company's innovation and transformation were successful, and the cornerstone innovative drug was growing steadily. It gave 25xPE for 2023, and maintained a “buy” rating for a reasonable value of HK$13.65 per share (HKD/CNY = 0.9).
Risk warning. R&D progress fell short of expectations, product promotion fell short of expectations, and medical insurance price reductions exceeded expectations.