Alice released its 2023 mid-year report: the company's operating income for the first half of 2023 was 749 million yuan, +149%; net profit attributable to mother was 208 million yuan, +679%; net profit after deducting non-return net profit of 184 million yuan, +3976% year on year.
23Q2 The company's operating income was 472 million yuan, +150% year on year, +71% month on month; net profit returned to mother was 174 million yuan, +251% year on year, +398% month on month; net profit after deducting non-return net profit of 164 million yuan, +251% year on year, +720% month on month.
Revenue side: Rapid release of fumetinib drives rapid revenue growth of the company. Alice 23H1 had revenue of 749 million yuan, of which volmetinib achieved product sales revenue of 713 million yuan, +138% over the same period last year. Vumetinib obtained an overseas equity license to confirm a reciprocal license revenue of 35 million yuan. First-line treatment of vumetinib was covered by medical insurance during the reporting period. At the same time, the company's sales team and sales channels were gradually improved to achieve a rapid increase in sales volume.
Profit side: Expenses are well controlled and profitability is improved. The company's gross profit margin for the 2023Q2 single quarter was 95.6%, a slight decrease compared to the same period last year. The 2023Q2 sales expense ratio was 44.3%, down 5.8 percentage points from the same period last year, and 13.9 percentage points from 23Q1. The 2023Q2 management expenses rate was 6.7%, down 5.3 percentage points from the same period last year, and 1.6 percentage points from 23Q1. The company's sales expenses and management expenses are well controlled. In terms of R&D expenses, the company spent 50 million yuan on R&D expenses in 23Q2, +26.2% over the same period last year. In terms of net interest rate, the company's 23Q2 gross profit margin reached 36.8%, an increase of 10.6 percentage points over the previous year, and a significant increase in profitability.
Preliminary clinical data on 20 exon insertion indications have been published, and the potential is huge and the future can be expected. A summary of vumetinib for EGFR ex20ins indications and post-line data was published in WCLC. 30 people were enrolled in 1L treatment (240 mg), and 49 people were enrolled in post-line treatment (240 mg, 24 people with 160 mg). 1L treatment ORR 69%, mPFS 10.7m; post-line treatment 240 mg group ORR 50%, mPFS 7.0 m; post-line treatment 160 mg group ORR 41%, mPFS 5.8m. Currently, the first-line standard treatment for NSCLC for EGFR ex20ins is still chemotherapy, and vumetinib has significant advantages over chemotherapy. The company is currently conducting a phase II registered clinical study on 20 exon insertion indications for second-line treatment. A phase III registered clinical study on first-line treatment indications is currently ongoing, and the future can be expected.
Maintain a “Highly Recommended” investment rating. We are optimistic about the continued growth of the long life cycle of fumetinide indications. We expect the company's net profit to be $3.0, 5.1, and 700 million yuan respectively in 2023-2025, +133%, +68%, and +38%. The corresponding PE is 41x, 24x, and 18x, respectively. According to the DCF model, Alice's valuation is 15.9 billion yuan, maintaining a “highly recommended” investment rating.
Risk warning: Risk of R&D falling short of expectations, risk of sales falling short of expectations, risk of changes in the payment environment, risk of increased competition, etc.