Main points of investment

Revenue from core products continues to grow steadily. In the first half of 2023, the company realized operating income of 478 million yuan, compared with 341 million yuan in the same period in 2022, an increase of 40.28% over the same period last year. The net profit was 95 million yuan, deducting 84 million yuan from non-parent net profit, compared with-7 million yuan in the same period in 2022. In the second quarter, the operating income was 270 million yuan, an increase of 68.50% over the same period last year and an increase of 30.45% over the same period last year.

The net profit of returning to the mother is 61 million yuan. Operating income in the first half of the year increased by 40.28% over the same period last year, mainly due to steady growth in sales of the two major commercial products during the reporting period.

With the gradual recovery of diagnosis and treatment demand and the listing of pre-filling needles, the market penetration of Yisepu continues to increase. The listing of Yisaipu pre-filling needle in March promoted the rapid growth of Yisep's sales revenue, which reached 304 million yuan during the reporting period, an increase of 24.98% over the same period last year. Septin-Inituximab successfully renewed the contract and was reimbursed for the lifting of the restriction on the use of vinorelbine in combination with chemotherapy for the treatment of advanced breast cancer.

The clinical pipeline of autoimmunity is progressing smoothly. Phase III clinical trial of 608 (IL-17A) in the treatment of moderate and severe plaque psoriasis was completed in April. Phase III clinical data are expected to be read out by the end of the year, and 2024H2 is expected to apply for BLA. The treatment of chronic sinusitis with nasal polyps was approved by NMPA in April. The first patient with chronic sinusitis with nasal polyps was enrolled, and the COPD II phase IND application was accepted. The II phase clinical trial of moderate and severe atopic dermatitis reached the main clinical end point in August, and it is expected that 23H2-24H1 will open a three-phase registered clinical trial. The II phase clinical trial of severe asthma with SSGJ-610 eosinophilia was completed in July. The II phase clinical trial of SSGJ-613 in the treatment of acute gouty arthritis reached the main end point in July.

Profit forecast and valuation: with the expansion of the core product market and the lifting of health insurance restrictions, the company's revenue will continue to grow; the company's core strategy of self-immunity product pipeline continues to make rapid progress. We forecast that from 2023 to 2025, the company's income will be 1.031 billion yuan, 1.18 billion yuan and 1.345 billion yuan respectively, corresponding to 0.18,0.22,0.27 yuan per share respectively.

Risk tips: product sales are not as expected, R & D progress is not as expected, market competition is intensified, the risk of a sharp decline in prices, and so on.