Incident: Recently, the company announced a number of business developments. On December 27, the company announced that the innovative drug TRD205 (AT2R receptor antagonist) tablets were IND approved by the China Drug Administration for the treatment of neuropathic pain, and had previously been approved by the FDA; on December 22, the company announced that the first-line phase III clinical trial of anlotinib combined with chemotherapy for advanced soft tissue sarcoma was successfully completed.
Endogenous business reverses in 2024, and growth is expected to be in double digits. There are no large single products in the generic drug sector; many future indications of anlotinib (1L SCLC, liver cancer, kidney cancer, etc.) are in the NDA or phase III stage, and the product life cycle will continue to be extended after approval. The tumor anti-vascular+immune product matrix is expected to hit a sales peak of 10 billion dollars. The F627 whitening needle was successfully negotiated, and bioanalogs (the three major tumor antibodies, RANKL, etc.) were the main driving factors for the double-digit increase in 2024 performance.
BD in&out has blossomed, and the subsequent innovation pipeline has formed an echelon. In 2023, the company introduced multiple products such as Prey Pharmaceutical's FIC antimicrobial peptides, Yifang Biotech's KRAS inhibitors, and Huaning Biotech's GIP/GLP1, and completed the acquisition of Fstar, a dual-antibody platform company. The innovative drug pipeline has formed an echelon. The innovative drug pipeline has 3 NDA statuses, and nearly 10 in phase III clinical stages. The Fstar dual antibody pipeline is clinically active globally, and has the potential to achieve Lisence Out again in the future. The company has plenty of cash and will continue to promote Lisence in transactions in 2024.
Continuously optimizing the asset structure and speeding up repurchases shows the company's operating confidence. In early November, it was announced that all shares of the three commercially distributed companies will be sold, focusing on the core pharmaceutical business and increasing net profit margins. The share repurchase plan was approved on October 3. It is expected that the repurchase scale will not exceed HK$1 billion within the next 12 months, which will be used for possible future share incentive plans.
Profit forecast and rating: The estimated revenue for 2023-2025 will be 302.19/ 338.46/ 38.923 billion yuan, respectively, up 5.0%/12.0%/15.0% year-on-year. Net profit attributable to mother was 26.73/30.54 billion yuan. Considering marginal improvements in the company's endogenous business, BD acquisitions and overseas trips create incremental growth and maintain a “buy” rating.