We are optimistic that the company will break through in overseas markets with its core product Triplet, an inflection point in performance growth brought about by excellent product strength, and maintain a “highly recommended” rating.
Investment logic:
1. Build a world-class team to develop best-in-class products, and transform the company from Biotech to Biopharm. The company quickly recruited troops and brought in a number of heavyweight executives with a global perspective and rich industry experience. Many executives had rich experience in the FDA review. Li Cong and Zou Jianjun joined one after another, and together they achieved a major milestone: the first domestically produced PD-1 monoclonal antibody, triplet, was approved by the US.
2. Focus on triplex entering overseas markets, promoting the expansion of domestic multiple indications, and creating a broad spectrum I-O treatment paradigm. The first is to continue vigorously promoting the overseas listing of Triplex: in addition to being approved in the US, Australia, Europe, and the UK have all accepted applications and are expected to go public next year. The second is to continue to promote the expansion of new indications of trepril in China. There are already 4 indications in the research pipeline that are in the NDA stage. It is expected that next year they will be marketed domestically and all will be covered by health insurance.
3. Focus on covering the two major tracks in the field of oncology and chronic diseases, and continue to advance the clinical progress of various forward-looking products. It mainly targets PD1 resistance, enhances the efficacy of trepril, and focuses on the unmet clinical needs of other cancers: 1) the world's first BTLA monoclonal antibody, claudin18.2-ADC, etc. in combination with triplil; 2) the method of subcutaneous injection of trepril; 3) the advancement of clinical progress of PI3K-α inhibitors. In the field of chronic diseases: the domestic marketing application for PCSK9 inhibitors has been accepted; siRNA targeting AngPTL3 has been clinically approved; in the field of self-immunity, the treatment of moderate to severe psoriasis with IL-17A inhibitors has also entered phase III clinical trials.
4. Empower joint ventures and long-term layout of cutting-edge innovation fields. Join hands with Runjia to create a small nucleic acid innovative drug research and development base to actively promote the progress of PI3K-α inhibitors, PCSK9-siRNA, and AngPTL3-siRNA; and Maiwei Biotech actively promote the overseas commercialization of Junmaikang. Overall, I am optimistic about the layout of Junshi's innovation targets.
Investment advice: According to our pipeline analysis, we give the existing marketed products and phase III clinical pipelines (Triplet, Tifcemalimab, Junmaikang, VV116, etc.) a peak value of 5.5 billion yuan in overseas sales, 5 times PS valuation, and the overseas market valuation of the pipeline can reach about 20 billion yuan. Domestically (trepril, angoricimab (PCSK9), IL17A inhibitors, etc.) gave a 4x PS valuation, and the domestic pipeline market valuation could reach about 34 billion yuan, so we gave the company a reasonable market value estimate of about 54 billion yuan in total.
Profit forecast: We expect the company's revenue for 2023-2025 to be 15.00, 25.00, and 4.250 billion yuan, respectively, with year-on-year growth rates of 3.20%, 66.67%, and 70.00%, respectively, and net profit of -18.98, -7.59, and -46 million yuan respectively. The year-on-year growth rates are 20.52%, 60.01%, and 93.98%, corresponding to the current stock price PE of -22.79, -56.98, and -945.92 times, maintaining the “highly recommended” rating.
Risk warning: risk of clinical failure, risk of increased competition, risk of product sales falling short of expectations, policy risk.