Events: The company released its 2023 three-quarter report. The first three quarters of 2023 achieved revenue of 302 million yuan (+124.91%), net profit of the mother - 32 million yuan, net profit after deduction of net profit - 46 million yuan; 23Q3 achieved revenue of 63 million yuan (+4.17%), net profit of the mother - 23 million yuan, net profit of 23 million yuan, and net profit of non-refunded net profit - 23 million yuan.

Actively promote the progress of the core research pipeline: As of 2023Q3, the company has obtained the results of a head-to-head phase III clinical study on anomitib tablets (converted treatment of HIV-1 infected people with viral suppression) and the imported original drug integrase inhibitor Iconpropib. Clinical research data show that for HIV-1 infected people who have obtained viral suppression through treatment, anomitite tablets can maintain viral suppression for a long time and are quite effective. They are comparable in terms of liver and kidney safety, and have advantages in cardiovascular metabolic safety indicators such as blood lipids, body weight, and uric acid. The company is preparing to submit a marketing license application for the new indication to the Drug Evaluation Center of the State Drug Administration. The company will continue to promote coverage and dosage of enovirin-containing programs (enovirin tablets, enomitib tablets) on the basis of continuously accumulating high-level evidence-based medical evidence in China.

Strengthen talent team building and appoint a number of senior managers: As of 2023Q3, the company has successively introduced a number of marketing and management talents with solid business ability and rich experience, including senior vice presidents, marketing directors, financial directors, and HR directors in charge of commercialization of innovative HIV drugs. The company's new management team has been adjusted; at the same time, through the launch of a new stock incentive plan, the company fully incentivizes outstanding core employees, including marketing, to complete various key tasks and grow with the company. In the next phase, the primary goal is to achieve sustainable profit and performance growth, continuously improve the governance structure, standardize operations, and fulfill social responsibilities.

Investment suggestions: The company targets major diseases such as AIDS and inflammation, is guided by unmet clinical needs, and is committed to innovative drug research and development. We expect the company to achieve operating income of 335/4.62/614 million yuan and net profit of 0.74/0.17/113 million yuan in 2023-2025, covering the first time, and giving it an “increase in holdings” rating.

Risk warning: sales fall short of expectations; clinical progress falls short of expectations; risk of policy fluctuations.