Incidents:
Recently, the company announced its 2023 annual performance forecast. It is expected to achieve operating income of about 1,541 billion yuan (about 6.02% YoY), net profit to mother of about -2250 million yuan (loss of about -5.78% YoY), and R&D expenses of about 1,964 billion yuan (YoY -17.63%).
Comment:
Achieved a year-on-year increase in revenue, a year-on-year reduction in losses, and a marginal improvement in performance. During the reporting period, the company's revenue increased, mainly due to the increase in sales revenue of commercial drugs compared to the same period last year. The company achieved revenue of around 550 million yuan in 2023Q4, with both month-on-month and year-on-year growth. By the end of the reporting period, the company had Tuoyi? , Jun Maikang? With Min Devi? There are three commercial drugs. Drug sales revenue continues to grow, and the company's own hematopoietic capacity has been further strengthened. The company is currently still in a state of loss, but losses decreased year-on-year during the reporting period. The main reason is that the company strengthened control of various expenses while increasing revenue, optimized resource allocation, and focused on a more promising R&D pipeline. Revenue increased year over year, loss decreased year on year, and performance improved marginally.
The company's R&D side ushered in many positive developments, and the pipeline continued to advance. During the reporting period, the company's R&D side ushered in many positive changes: Core Product Tuoyi? More than 40 clinical studies with more than 15 tumor indications have been carried out worldwide. Currently, 7 indications have been approved domestically, and 6 indications have been included in the medical insurance catalogue. At the same time, 3 new NDAs have been accepted by the NMPA, and it is expected that 10+ domestic indications will be approved in the future. Overseas, treprilizumab has been successfully approved for marketing by the FDA, achieved the milestone of domestically produced innovative drugs, and has accumulated external licensing in more than 50 countries. It is expected that it will continue to reap milestones and sales shares. The international multi-center phase III clinical study of anti-BTLA monoclonal antibody (Tifcemalimab) for the treatment of limited-stage small cell lung cancer has completed the world's first patient enrollment and first administration (the first in the world); the phase III clinical study for the treatment of classic Hodgkin lymphoma has officially started. It is expected that the company's R&D pipeline will continue to make positive progress.
Focus on the company's recent multilateral catalysts and performance-side improvements. Treprizumab is expected to be approved for first-line kidney cancer and triple-negative breast cancer in 2024. If approved, it will be the first domestically produced PD-1 monoclonal drug approved for this indication. As 3 first-line indications are included in the new medical insurance catalogue (implementation began in January) and subsequent multiple indications continue to be approved, it is expected that the domestic Tuoyi sales performance side will continue to improve.
At the same time, relevant marketing applications submitted by treprilizumab in the UK, the European Union and Australia have been accepted, and it is expected that it will continue to expand overseas markets and realize the value of the product.
Profit forecast and valuation: The company focuses on the development of innovative drugs in oncology and other fields. The potential is expected. It is expected to achieve revenue of 15.41/18.47/2,840 billion yuan in 2023-2025, with earnings per share -2.41/-1.13/-0.28 yuan/share, maintaining a “buy” rating.
Risk warning: R&D pipeline progress falls short of expected risks, commercialization falls short of expected risks, etc.