Event: the company released the semi-annual report of 2023, the company's operating income in the first half of 2023 was 749 million yuan, + 149% compared with the same period last year; the net profit was 208 million yuan, + 679%; and the non-return net profit was 184 million yuan, + 3976% over the same period last year.

Rapid commercialization of Vumetinib: after the first-line indications were approved and successfully included in the health insurance catalogue, the sales of Vumetinib increased significantly. The company's operating income in the first half of the year was 749 million yuan, of which Fumetinib realized product sales revenue of 713 million yuan, + 138% compared with the same period last year. Fumetinib obtained overseas rights authorization to confirm the equivalent authorization income of 35 million yuan. At present, the company's marketing team has covered 30 provinces and cities, with more than 1000 hospitals in the core market area; in addition, the company's business partner, Jiangsu Shanghai Fosun Pharmaceutical, covers more than 2000 hospitals in the vast market.

Focus on the clinical potential of core products, continue to expand the scope of application of vermetini: the company continues to develop vermetini and deeply expand the indications of vermetini. In April 2023, phase III clinical trial IND of vermetini for first-line treatment of exon 20 insertion mutations was approved; in April 2023, phase Ib clinical trial IND of vermetini for advanced or metastatic NSCLC patients with EGFR or HER2-activated mutations was approved In August 2023, Fumetinib was approved for first-line treatment of III phase clinical trial IND in adult patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) with EGFRPACC or EGFR L861Q mutations.

Investment advice: with the approval of the first-and second-line treatment of the blockbuster product Vumetinib, the smooth progress of clinical trials of indications such as adjuvant therapy and exon 20 mutation, as well as the overseas progress of the product, the company is expected to quickly expand its volume at the sales end and open up room for the future. From 2023 to 2025, we expect the company to achieve an operating income of 1.582 million yuan and a net profit of 4.72 million yuan and a net profit of 828 million yuan. The corresponding PE is 27.85, 15.87 and 11.68 times, respectively, maintaining the "over-holding" rating.

Risk hints: the risk of new drug research and development falling short of expectations, the risk of product sales falling short of expectations, the risks brought by pharmaceutical macro policies, etc.