Incident: The company released its 2023 annual report. During the reporting period, the company achieved revenue of 1,083 billion yuan, an increase of 40.26% over the previous year; realized net profit attributable to mother - 1,511 billion yuan; and realized net profit deducted from non-mother - 1,543 billion yuan. Product revenue for the full year of 2023 reached 1,049 million yuan, an increase of 42.13% over the previous year; according to the official WeChat account, titasip and verdicitumab each achieved sales of more than 500 million yuan.
Many clinical trials of tetacipr and verdicitumab are being carried out in an orderly manner at home and abroad.
Titacept: Systemic lupus erythematosus (SLE) has been approved in China, and NDA has been submitted for rheumatoid arthritis (RA), and phase 3 clinical trials are ongoing for indications such as myasthenia gravis (MG), primary dry syndrome (PSS), immunoglobulin A nephropathy (IgA nephropathy), and optic neuromyelitis spectrum disease (NMOSD). Phase 3 clinical trials of systemic lupus erythematosus (SLE) have progressed smoothly overseas, and phase 3 clinical trials of primary dry syndrome (PSS), myasthenia gravis (MG), and immunoglobulin A nephropathy (IgA nephropathy) have been approved by the FDA.
Verdicitumab: Clinical trials have been carried out for late-line treatment of urothelial cancer (UC) and gastric cancer (GC) in China. Clinical trials have been carried out, such as combined triplimab UC first-line stage 3, combined treprilizumab and chemotherapy/trastuzumab gastric cancer stage 2/3, and the single drug HER2 low-expression breast cancer stage 3. The combination of cardonilizumab has been approved for clinical use in phase 2/3 of gastric cancer. Overseas single-drug UC second-line key phase 2 and PD-1 monoclonal antibody UC first-line phase 3 continue to be promoted.
Many innovative drugs will continue to advance in the future, and the product pipeline is rich in potential. Phase 3 clinical trials of wet senile macular degeneration (WamD) and diabetic macular edema (DME) of RC28 are progressing smoothly in other follow-up pipelines; multiple clinical trials such as MSLN ADC drug RC88, Claudin18.2ADC drug RC188, and DR5 ADC drug RC248 continue to advance in the ADC pipeline, which is expected to further consolidate the company's dominant position in the ADC field; in addition, PD-1/VEGF dual antibody RC148, IL-15/IL-15rα Fc fusion protein Clinical development of RC198 etc. is also underway in Phase 1; overall, the company's future product pipeline has great potential.
Investment advice: We expect the company's revenue from 2024 to 2026 to be 1,689 billion yuan, 2,399 billion yuan, and net profit of -81 billion yuan, -360 million yuan, and 650 million yuan respectively. Considering the volume potential of the company's marketed/upcoming products and rich clinical research and development pipeline, we believe that the company's future development prospects are promising. According to the DCF model, a target price of 72.73 yuan for 6 months will be maintained.
Risk warning: Risk of clinical trial progress falling short of expectations, risk of clinical trial failure, risk of product sales falling short of expectations.