Core opinion: (Unless otherwise specified, the following currencies are all RMB)
The company announced its 2023 annual report results: revenue of 354 million yuan (+254% year over year, the following are all year-on-year caliber), mainly down payment revenue from CMG901 authorized to AZ; loss of 358 million yuan during the year. Sales costs of $37 million (+1327%) were mainly R&D expenses generated by external licensing; R&D expenses of 596 million yuan (+18%) were mainly due to increased employee costs and increased depreciation for the purchase of new machinery and equipment. Cash and equivalents in hand, time deposits, and financial assets measured at fair value and changes included in profit and loss of $2,719 billion, are relatively well-funded.
CM310 will soon be launched domestically, and several self-exempt pipelines are progressing smoothly. The marketing application for CM310 to treat moderate to severe atopic dermatitis in adults has been accepted by the CDE and included in priority review and approval; phase III treatment of severe atopic dermatitis in adolescents is being enrolled; the domestic phase III treatment of chronic sinusitis with nasal polyps has reached the main end point and is expected to be produced within the year; the treatment of seasonal allergic rhinitis is in phase III; the key phase II/III for which Shijiao is responsible is also in progress. CM326 has completed enrollment in adults for moderate to severe atopic dermatitis stage II and chronic sinusitis with nasal polyps phase IB/IIa. Phase II of CM338 treatment for IgA nephropathy is being enrolled.
Tumors: Phase III of CMG901 has been initiated overseas, and the early pipeline has potential for FIC. CMG901 treatment for recurrent refractory gastric cancer/gastroesophageal adenocarcinoma has been qualified as a fast track and orphan drug by the FDA, and has been recognized as a breakthrough therapy by CDE to treat Claudin18.2 positive gastric cancer with at least first-line treatment failure. According to the Clinicaltrial, AstraZeneca has initiated phase III clinical trials. CM313 treatment for multiple myeloma and systemic lupus erythematosus is stage I. The CD20XCD3, BCMAXCD3, and GPC3XCD3 dual antibodies incubated on our NTCe platform are leading in domestic progress.
Profit forecasting and investment advice. The company's revenue for 2024-2026 is estimated to be 1.50, 4.90, and 783 million yuan. The company lays out differentiated innovation pipelines in the fields of self-defense and oncology, and clinical operation efficiency is high. We continue to be optimistic about the market space for core products. Using the DCF valuation method, a reasonable value of HK$57.73 per share (HKD/CNY=0.9) was obtained, maintaining a “buy” rating.
Risk warning. Risk of R&D failure, product sales falling short of expectations, market competition exceeding expectations, etc.