Incident: The company released the 2023 annual report and the 2024 quarterly report, with revenue of $1,503 million (YoY +3.38%), net profit attributable to mother of 2.283 billion yuan (YoY +4.38%), net profit excluding non-attributable net profit of -2298 million yuan (YoY +6.23%); 1Q24 achieved revenue of 381 million yuan (YoY +49.24%), net profit attributable to mother of $283 million (+47.92% YoY).

Tripley is growing rapidly and going overseas is progressing smoothly. The company's 3 drugs are in the commercialization stage. The company's revenue in 2023 was 1,503 billion yuan, of which product sales revenue was 1,191 billion yuan, an increase of 58% over the previous year. Tripley's revenue was approximately $919 million, up about 25% year over year.

1) Treprilizumab (PD-1, Tuoyi) began to grow at an accelerated pace thanks to the approval of new indications and medical insurance. In Q1 2024, Trepril's revenue was about 307 million yuan, an increase of about 56.82% over the previous year. Seven of Tuoyi's indications have been approved for marketing in China, and 6 are covered by national health insurance. Overseas progress is progressing smoothly. In October 2023, the FDA approved a full line of treatment for nasopharyngeal cancer. In addition, listing applications in the European Union, the United Kingdom, Australia, and Singapore have been accepted, and the company has reached commercial cooperation in more than 50 countries.

2) New indications for treprilizumab have been successfully developed, and it is expected to usher in accelerated dosage: 1) The broad layout of perioperative indications. In December 2023, adjuvant treatment for lung cancer was approved as an exclusive indication; post-operative adjuvant treatment for liver cancer and perioperative treatment of esophageal squamous cell carcinoma has been completed; 2) In April 2024, first-line treatment for renal cell cancer was approved and marketed; 3) In July 2023, breast SNda for triple-negative breast cancer was accepted by the NMPA; 4) In July 2023, extensive single-cell small-cell lung cancer SnDA acquisition for line therapy NMPA accepted; 5) In September 2023, first-line melanoma phase III clinical trials reached the main research endpoint.

3) Remidevil deuterium hydrobromide tablets (Mindevil): The product was conditionally approved for marketing by NMPA in January 2023, and covered by medical insurance in January 2024. The admission process is progressing steadily, and by the end of 2023, it had entered more than 2,300 hospitals. Adalimumab (Junmaikang): By the end of 2023, the product had completed tenders in 26 provinces and was admitted to 173 hospitals, covering 1,316 pharmacies.

The R&D pipeline is progressing smoothly, and growth is sustainable. Currently, nearly 30 of the company's products under development are in the clinical stage, and more than 20 are in the pre-clinical stage. By the end of 2023, (1) the world's first anti-tumor anti-BTLA monoclonal antibody tifcemalimab (TAB004/JS004) independently developed by the company had initiated 2 phase III clinical trials for limited-stage small cell lung cancer and classic Hodgkin lymphoma (cL); (2) recombinant humanized anti-PCSK9 monoclonal antibody injection, angorizimab (project code: JS002) was accepted by the NMPA; (3) recombinant humanized anti-IL-17A (monoclonal antibody) (JS005) Entered phase III clinical trials for moderate to severe plaque psoriasis. (4) In terms of early pipeline, the company will focus on promoting products such as Claudin18.2 ADC drugs (JS107), PI3K-α oral small molecule inhibitors (JS105), siRNA drugs targeting ANGPTL3 (JS401), anti-CGRP monoclonal antibodies (JS010), CD20/CD3 bispecific antibodies (JS203), PD-1/VEGF bispecific antibodies (JS207), and PD-1 monoclonal antibody subcutaneous injection preparation (JS001sc).

Profit forecast. We expect the company's 24-26 revenue to be 2,434, 34.24, 4.827 billion yuan, and net profit of -1,225 million yuan, -3.53, and 511 million yuan. We believe that the company's products have progressed a lot, and at the same time have a rich innovation pipeline, maintaining a “buy” rating.

Risk warning: health insurance price reduction risk; industry competition increases risk; risk of epidemic; product development and clinical progress fall short of expectations.