occurrences
Recently, the company announced its 2023 annual results. During the reporting period, the company achieved operating income of 556.6 million yuan (+4.6% YoY), loss of about 145 million yuan (-54.0% YoY), and R&D expenses of 217 million yuan (YoY -18.8%).
Comment:
Losses narrowed sharply year over year, and revenue increased year over year. The company's losses narrowed by about 54% in 2023, mainly due to increased product sales revenue, lower sales costs due to improved inventory management, and increased other income and earnings such as diluted equity proceeds from Sagimet Biosciences' initial public offering on the NASDAQ stock market in 2023. Meanwhile, the company has repurchased and cancelled nearly 75 million shares (nearly HK$130 million) since 2023, continuing to boost investor confidence.
The company focused on the core pipeline and made significant progress in various products such as NASH/Acne. The company's pipeline progressed smoothly, and multiple products achieved breakthrough progress: ASC41 (THR-beta) non-alcoholic fatty liver disease (NASH) phase II clinical data was released, 93.3% of patients had a relative reduction of 30% or more from the baseline, leading the research progress. Excellent data highlights global competitive advantage. Phase II clinical enrollment is being accelerated; the ASC40 (FASN) NASH 52 weeks II clinical trial was successful, reaching both NASH improvement and fibrosis; Acne phase II clinical trials achieved major and secondary efficacy. End point: Phase III clinical enrollment was accelerated; more than 120 cases of recurrent glioma have been enrolled in phase III clinical trials.
Multiple pipelines continue to advance, and it is expected that the value of the product will continue to be realized.
More than one milestone event is expected to be completed in 2024 and will continue to enhance the company's value. It is recommended to focus on related catalysis. Multiple milestones are expected to be completed this year: ASC41 NASH completes phase II clinical enrollment; ASC40 NASH submits US phase IIb trial data to China's NMPA to communicate the registered clinical plan; ASC40 acne completes phase III enrollment; ASC40 glioblastoma announces phase III clinical analysis data; and ASC61 (PD-L1) continues to conduct US phase I MAD clinical research. Multiple clinical progress progress and data publication. It is recommended to focus on relevant pipeline catalysis.
Profit forecasting and valuation: The company focuses on drug development in the fields of viral diseases, non-alcoholic steatohepatitis, and tumors, with promising potential. It is expected to achieve revenue of 0.03/0.04/029 billion yuan in 2023-2025, with earnings per share -0.25/-0.30/ -0.37 yuan/share, covering the first time, giving the company an “increase in wealth” rating.
Risk warning: R&D falls short of expectations, commercialization falls short of expected risks, etc.