A rising star in the field of pandermatology and nursing. For the first time, Kodi is a rising star in the field of pan-dermatology and nursing in China. In the short term, hair pipeline brand potential increases, core product implementation contributions increase, and skincare brands are also expected to achieve rapid volume release under the company's marketing; in the medium to long term, differentiation promotes the active epitaxial expansion of superimposed companies in an orderly manner, which is expected to bring high growth. We expect the company's net profit to be -19.82/-497/-341 million yuan in 2023-2025, corresponding EPS of -6.52/-1.63/-1.12 yuan, a reasonable valuation of 7.9 billion yuan based on the DCF valuation method, and the total market value/R&D expenditure in 2022 is average in the industry. We believe that the company's valuation is cost-effective, covered for the first time, and given a “buy” rating.

Comprehensive coverage+differentiated layout creates a leading integrated dermatology platform, commercialization progresses smoothly, and the overall market space for pan-dermatology and nursing is broad. The company has built a leading integrated dermatology platform through comprehensive coverage+differentiated layout. (1) Hair: A comprehensive layout+differentiated rich product matrix has been established, and the GMV of the hair pipeline reached 16.7 million yuan+ (+234%) during the 2023 Double 11 period. Among the core products, French white tube (with the largest market share in Europe) focuses on “refreshing” differences; CU-40102 is expected to become the first topical finasteride product in China, with obvious improvement advantages. (2) Skin: Dermatology drugs are arranged with differentiated products with low side effects, low restrictions, and high stability. CU-10201 is expected to become the first topical minocycline product in China; skincare products cooperate with the high-end skincare brand Omar to combine excellent product power and marketing capabilities to push the skincare pipeline GMV to reach 24.8 million yuan + during the 2023 Double 11 period. (3) Fat & local anesthesia: Localized fat reduction is accurately cut into the innovative mechanism product CU-20401 (safe, painless advantage); lidocaine butacaine products are scarce in local anesthesia layout.

Deepen the barriers of R&D+consumption, and academic resources effectively empower C-side sales research and development: the company relies on unique CATAME? The technology platform builds competitive product pipelines, and deepens technical barriers such as dosage form development and efficient drug administration; at the same time, the company has an excellent core team with a global perspective, a large number of scarce technical talents, and equity motivation+independent training to enhance the stickiness of R&D talents. Terminal sales: With commercialization as the core and driver, a reasonable organizational structure ensures that all platforms and links support and collaborate around commercialization. The company has keen demand insight and marketing sense, and has reached strategic cooperation with multiple e-commerce platforms; at the same time, it has accumulated industry-leading academic PI resources based on the innovation pipeline, and is expected to use the influence of authoritative experts to efficiently empower C-side sales.

Risk warning: R&D progress blocked, sales falling short of expectations, uncontrolled expenses, medical incidents, regulatory changes.