incident. In the third quarter of 2023, the company's revenue was 676 million yuan, an increase of 274 million yuan compared with the same period last year, an increase of 68.10% over the same period last year. In the first three quarters of 2023, the company's revenue was 1,906 million yuan, an increase of 669 million yuan over the same period last year, and an increase of 54.07% over the same period last year.

Insulin formulations achieve rapid release, and the product structure is continuously optimized. The current increase in domestic sales revenue is mainly due to the rapid release of domestic insulin products. In the first three quarters of 2023, the company's domestic insulin product sales increased by 70.06% during the same period. At the same time, thanks to the implementation of a special insulin collection project, the company's mealtime (quick-acting) and pre-mixed insulin products were also rapidly released, and sales volume increased 115.57% year over year. As a result, the company's product structure has also been further optimized. From January to September 2022, mealtime (quick-acting) and pre-mixed insulin products accounted for 43% of sales, and sales of meal-time (quick-acting) and premixed insulin products from January to September 2023 accounted for 54%.

The company focuses on R&D innovation and continues to cultivate the diabetes market. In July 2023, the company's GLP-1 receptor agonist GZR18 conducted a head-to-head phase II trial with simetaglutide injections to evaluate drug efficacy in type 2 diabetes, and completed the administration of GZR18 in the first phase IIb clinical trial in China in August 2023 for type 2 diabetes, obesity, and overweight indications. In September 2023, the State Drug Administration accepted the clinical trial of GZR18 oral tablets. Currently, the only companies developing weekly insulin preparations are Novo Nordisk and Lilly. The company's ultra-long-acting weekly insulin preparation, GZR4, completed the administration of the first phase II clinical trial for patients with diabetes in September 2023. Furthermore, in July 2023, the company received the “Drug Clinical Trial Approval Notice” issued by the National Drug Administration for the treatment of moderate to severe plaques of psoriasis in adults that meet the indications of systematic treatment or phototherapy.

International revenue continues to grow, and the export of products overseas can be expected in the future. In terms of products going overseas, the company's marketing applications for three insulin injection-like drugs, glycine, lyophen, and menthol have been accepted by the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA). Furthermore, the company successfully delivered the first batch of insulin for urgent tenders in Brazil. The company signed a commercial agreement with international generic drug giant Sandoz. The agreement stipulates that after the three biosimilar drugs are approved, Sandoz will carry out commercial operations of the drugs in the US, Europe and other specific regions. Ganli Pharmaceutical will be responsible for drug development (including clinical research) and supply matters, and is looking forward to the overseas sales performance of the three insulins.

Investment suggestions: The company's net profit from 2023-2025 is estimated to be 3.66/6.77/1,110 billion yuan, corresponding to PE 73/39/24 times, respectively. The company used insulin collection to rapidly expand its market share, and its main product, insulin preparations, achieved rapid release. Furthermore, the company's listing applications for three insulin biosimilar injections have been approved by the FDA and EMA, and have the potential to go overseas. Therefore, the rating was raised and the company was given a “recommended” rating.

Risk warning: the release of production capacity cannot hedge against the risk of collection and price reduction; risk of product development falling short of expectations; risk of increased market competition; risk of increased market competition; risk of generic drug collection; risk of generic drugs