Core views:
The company issued the 2023 performance report announcement: the company achieved revenue of 1,540 billion yuan in 2023, an increase of 5.96% year on year; realized net profit of 2.247 billion yuan, a year-on-year loss reduction of 141 million yuan; realized net profit deducted from non-mother of 2.268 billion yuan, a year-on-year loss reduction of 182 million yuan. The sales revenue of the company's three commercial drugs, Tuoyi, Junmaikang, and Mindewei increased, driving steady growth in the company's performance. At the same time, the company strengthened cost control and focused on the core pipeline, and profit-side losses decreased year-on-year.
PD-1 has broken through overseas, and commercialization is expected to accelerate. According to the company's official website, the company treprilizumab was approved for marketing by the FDA in October 2023 for full-line treatment of advanced nasopharyngeal cancer.
In addition, the United Kingdom, the European Union, Australia, etc. have all accepted marketing applications for triplimab. Through commercialization agreements with Coherus, Hikma, Rxilient, and Dr. Reddy's, the company continues to expand its global commercialization network to help expand overseas sales of treprelimab.
Focusing on the core pipeline, breakthroughs have been achieved in a number of new drugs under development. According to the company's official website, the clinical progress of the pipeline: (1) The global FIC drug anti-BTLA monoclonal antibody Tifcemalimab has entered clinical phase III, and two phase III clinical studies with triplimab to treat LS-SCLC (international multi-center) and cL have now been initiated; (2) the PCSK9 monoclonal antibody marketing application was accepted by the NMPA in April 2023; (3) the first phase III clinical study of IL-17A monoclonal antibodies to treat plaque psoriasis was completed in August 2023 Patients were enrolled; (4) At the same time, the company accelerated the development of early pipelines such as JS107 (CLND18.2 ADC) and JS207 (PD-1/VEGF).
Profit forecasting and investment advice. We expect the company's revenue for 23-25 to be $15.40, 21.86, and $3.101 billion, respectively. Using the risk-adjusted DCF valuation method, the reasonable value of the company's A shares was 54.60 yuan/share. Considering the A/H share valuation premium, it corresponds to HK$21.60 per share for Hong Kong stocks, and maintains the “buy” ratings for A shares and Hong Kong stocks.
Risk warning. The overseas commercialization process fell short of expectations, progress in the research pipeline fell short of expectations, commercialization of new drugs fell short of expectations after marketing, and market competition increased risks.