Event: the company recently released its 2023 semi-annual report, with revenue of 239 million yuan (yoy+223.59%) in the first half of 2023; net profit of-10 million yuan (2022H1 is-68 million yuan); non-return net profit of-23 million yuan (2022H1 of-76 million yuan); R & D investment of 41.66 million yuan (2022H1 of 44.52 million yuan), accounting for 17.45% of revenue, of which expended R & D investment was 2974 yuan (2022H1 is 3001 yuan). The sales expenses were 50.85 million yuan, an increase of 56.11% over the same period last year, and the management expenses were 50 million yuan, an increase of 20.07% over the same period last year.

Comments:

Revenue increased by 224%, due to an increase in orders for two new HIV drugs + humanized protein crude products on December 30, 2022. The three-in-one compound single tablet preparation, ANV+3TC+TDF,ACC008, was officially approved for the market for indications for patients with primary treatment. In the first half of the year, the sales revenue of the two new drugs of HIV reached 32.83 million yuan (7.86 million yuan for yoy+317.7%,2022H1). Through strategic cooperation with Nanjing University Pharmaceutical Co., Ltd., the income of human crude protein 2023H1 is 172 million yuan (yoy+323.5%,2022H1 is 40.52 million yuan). The sales income of general pharmaceuticals is also faster than that of 2022H1.

The results of ACC008 used in III stage of menstrual patients show that the curative effect is similar to that of Jiefukang, and it has advantages in the safety of blood lipids and so on.

ACC008 has completed a 48-week major effectiveness study in a phase III clinical trial with Jefu Kang in June 2023 for treated patients, and is preparing to submit an NDA application to CDE. The phase III clinical results show that compared with the imported anti-AIDS drug Jefu Kang, ACC008 can maintain long-lasting viral inhibition and has the same efficacy for HIV-infected people who have been treated with viral suppression. in terms of safety, they are similar in the safety of liver and kidney, while ACC008 has advantages in cardiovascular metabolic safety indexes such as blood lipids, body weight and uric acid.

Profit forecast: we estimate that the company's operating income from 2023 to 2025 will be 570 million yuan, 770 million yuan and 885 million yuan respectively, and the net profit will be-9 million yuan, 125 million yuan and 165 million yuan respectively.

Risk factors: the risk of industry policy; the risk that the clinical progress of the project under research is not as expected; the risk that product sales are not as expected; the risk of intensified market competition.