Adi Pharmaceutical: HIV has created a new drug leader, and its performance is expected to meet rapid growth. The company focuses on the field of anti-HIV innovative drugs and human protein, and is committed to creating a complete HIV antiviral drug research and development pipeline and strong commercial operation capacity, while constantly consolidating the advantages in the field of human protein, integrating high-quality resources, and actively distributing upstream and downstream industries. In the field of HIV innovative drugs, the company has successively approved two innovative drugs, enrovirin and enomite, followed by the layout of a number of innovative drugs / generics to create a complete anti-HIV drug pipeline. In 2023, the company adjusted the management team and HIV innovative drug team and implemented equity incentives, which is conducive to the long-term development of the company.

With the steady growth of HIV drug demand, good clinical data and outstanding safety advantages, HIV drug market is expected to occupy an important position in the future. In recent years, the number and treatment rate of HIV patients receiving anti-disease treatment in China continue to increase, and the domestic demand for HIV drugs continues to grow, showing a continuous increase in the proportion of the market scale and the number of users of Medicare drugs and self-financed drugs. The efficacy of enomitine tablets in newly treated and treated HIV patients has been verified by high-level clinical studies, and compared with the current domestic free HIV drug "tenofovir + lamivudine + ifeverent" regimen and integrase inhibitors, it has obvious advantages in safety. On September 1, 2023, National Healthcare Security Administration issued the announcement on the Drug list of the National basic Medical Insurance, Industrial injury Insurance and Maternity Insurance in 2023. We believe that if enomitine tablets successfully enter the health insurance catalogue through negotiation, it is expected to gain clinical recognition by virtue of good evidence-based medicine accumulation and enter a rapid release period.

Earnings forecasts and valuations. We estimate that the company's operating income from 2023 to 2025 will be 465 million yuan, 712 million yuan and 937 million yuan respectively, with year-on-year growth rates of 90.3%, 53.1% and 31.7% respectively, and the net profit will be-39 million yuan, 67 million yuan and 178 million yuan respectively. Based on the closing price on October 27, the corresponding PE is-134.1, 79.1 and 29.8 times, respectively. For the first time, coverage gives a "buy" rating.

Risk hint: enrovir tablets failed in health insurance negotiations, health insurance payment was lower than expected or sales amount was lower than expected. The customer purchase amount of human protein business is lower than expected, and the collection of downstream preparations leads to the pressure on the price of human protein products.