The company is an innovative pharmaceutical company focusing on antibody drugs. Its core product, GR1501, has excellent curative efficacy and good safety. Currently, it has submitted an NDA application for moderate to severe plaque psoriasis, which is expected to be approved in early 2024, becoming the first domestically produced IL-17A monoclonal antibody to be marketed; in addition, the indications for central axial spondyloarthritis are progressing in an orderly manner, and the company is expected to be approved for listing in 2025. GR1801 is the world's first passive immune double antibody against rabies. It is in phase III clinical trials and is expected to be approved for sale in 2025. It has various differentiated comprehensive advantages, and is expected to lead to an increase in the penetration rate of passive immunity against rabies in China and the replacement of some traditional passive immunization agents in the future, with huge market potential. In the fields of self-immunity and oncology, the company has also laid out a number of other innovative targets with potential. Research and development is progressing well, and the market space is broad. Using the absolute valuation method, we use the DCF model to estimate the company's reasonable equity value of 15.620 billion yuan, corresponding to the target price of 43 yuan in 2023, covering the first time, and giving it a “buy” rating.

Company profile: A new antibody company with a complete industrial chain layout. The company is an innovative biopharmaceutical company driven by antibody drug discovery technology. In terms of drug development, the company has formed five major technology platforms to help the company continuously and efficiently produce better drug candidate molecules. Currently, the company has entered the clinical stage of 7 drugs. According to the company's prospectus, it is expected that in the next few years, new products or new indications will be approved every year, driving the company's revenue-side growth. The company's equity structure is stable, and the management team is rich in experience, which is expected to lead the company's strong development. The company has formed a complete industrial chain layout in the entire antibody drug development process to ensure that the R&D process and commercial production are autonomous and controllable.

GR1501: The first domestically produced IL-17A monoclonal antibody declared for marketing, with the potential to become a major product exceeding 3 billion yuan. The company's GR1501 has two main indications, namely psoriasis and central axial spondyloarthritis. The psoriasis market in China is vast, and the share of biologics is relatively low. According to Frost & Sullivan data (quoted from Quanxin Biotech's prospectus), China's biologics accounted for 29.3% of the psoriasis drug market in 2021, and it is expected that this ratio will exceed 50% in 2030, so there is plenty of room for improvement. Biologics have excellent efficacy and good safety in treating moderate to severe psoriasis. Among them, IL-17A monoclonal antibody is used as an example. In terms of PDB sample hospital sales data, it has an absolute advantage over other interleukin inhibitor sales data. The company's products, as the same target drug, are expected to benefit from the good market recognition of IL-17A monoclonal antibody; for moderate to severe plaques, GR1501 has submitted a listing application in 2023. According to the company's prospectus, the company is expected to be approved for listing in early 2024, and is expected to become the first domestically produced model IL-17A monoclonal antibody has a first-mover advantage. On the other hand, there is a large unmet clinical demand for axial spondyloarthritis in China. If the indications for GR1501 axial spondyloarthritis are approved (the company expects 2025), the potential market space for the product will be further broadened — we expect the peak sales of GR1501 to reach 3.3 billion yuan.

GR1801: Innovative passive immunity against rabies, with huge market potential. The number of people exposed to grade III rabies in China is large, reaching 16 million. Among them, the proportion receiving passive immunization agents is low, only 15% (according to the company's prospectus), so there is plenty of room for growth. Antibody-type passive immunization preparations have comprehensive advantages such as good efficacy and safety, large-scale production, and stable and uniform quality. In the future, they are expected to replace traditional passive immunization products and open up domestic passive immunization market space for rabies. GR1801 is the world's first dual antibody used in this field. It has good efficacy and safety, and the molecular design conforms to WHO recommendations, and has great market potential. According to the company's prospectus, the company expects GR1801 to be approved for listing in 2025, and we estimate that the peak sales value is expected to reach around 1.2 billion yuan.

Self-exempt pipeline: covering a variety of self-exempt indications, the market potential is huge. GR1802 is a new-generation IL-4R monoclonal antibody that can be used for various autoimmune diseases; the product has advanced in the indications for adult asthma, moderate to severe atopic rhinitis, and chronic sinusitis with nasal polyps, and is expected to occupy a place in the market in the future.

GR1603 is an IFNAR1 monoclonal antibody independently developed by the company. It mainly covers systemic lupus erythematosus. The clinical progress is high, and it is expected to become the first domestically produced IFNAR1 monoclonal antibody.

Tumor pipeline: a variety of innovative double antibodies to explore CD3 targets in depth. GR1803 is a BCMA×CD3 double antibody. The molecular design is differentiated, has its own characteristics, and preclinical data have shown good efficacy.

GR1901 is the first domestically produced CD123×CD3 double antibody to enter the clinical stage. It is used in acute myeloid leukemia (AML). There are no domestic biologics approved for AML. If GR1901 is approved for marketing, it is expected to fill the gap in the domestic market.

Risk factors: the company's drug review takes a long time, and the marketing time falls short of expectations; the risk of R&D progress falling short of expectations or R&D failure; the risk of commercial sales of the company's products falling short of expectations; the risk of increased market competition; the risk of increased market competition; the risk of uncertain inclusion of the company's core products in the national health insurance catalogue; and the risk of changes in industry policies exceeding expectations.

Profit forecasting, valuation and ratings: The company is an innovative pharmaceutical company focusing on antibody drugs. The core product GR1501 has excellent curative efficacy and good safety. Currently, an NDA application for moderate to severe plaques has been submitted. According to the company's prospectus, it is expected to be approved in early 2024, becoming the first domestically produced IL-17A monoclonal antibody to be marketed; in addition, indications for central axial spondyloarthritis are progressing in an orderly manner, and the company is expected to be approved for listing in 2025. GR1801 is the world's first passive immune double antibody against rabies. It is in clinical phase III. According to the company's prospectus, it is expected to be approved for listing in 2025. It has various differentiated comprehensive advantages, and is expected to bring about an increase in the penetration rate of passive immunity against rabies in China and some replacement of traditional passive immunization preparations in the future, with huge market potential. In the fields of self-immunity and oncology, the company has also laid out many other innovative targets with potential. Research and development is progressing well, and the market space is broad. Using the absolute valuation method, we use the DCF model to estimate the company's reasonable equity value of 15.620 billion yuan, corresponding to the target price of 43 yuan in 2023, covering the first time, and giving it a “buy” rating.