The company's recent situation
The company recently issued an announcement that the CU-30101 (topical lidocaine tinocaine cream) drug marketing license application was accepted by the State Drug Administration. Furthermore, as of July 30, the company had repurchased 0.5858 million shares, accounting for about 0.19% of the total issued share capital, demonstrating management's confidence in the company's future development. Looking forward to the future, we believe that the company has good commercialization capabilities, and that various pipelines are expected to be launched in 2H24-25, and we are optimistic about the company's medium- to long-term growth space.
reviews
1. The online listing application for table hemp tubes was accepted, and the repurchase showed management's confidence. According to the company's announcement on July 31, the marketing license application for CU-30101 (topical lidocaine decaine cream) was accepted by the National Drug Administration in July after reaching the main end of the phase III clinical trial on January 31, 2024, and progress exceeded expectations. Due to the unique pharmacokinetic properties of its ingredients, the lidocaine and tetracaine combination formula of CU-30101 can produce a rapid and long-lasting anesthetic effect. Lidocaine diffuses faster and more widely than tetracaine, while tetracaine is more lipophilic than lidocaine and can be concentrated in the stratum corneum of the epidermis. Currently, there are no compliant lidocaine products in the domestic market. We believe that the launch of subsequent products is expected to occupy a new blue ocean in the compliance market for topical anesthetic creams. Furthermore, since announcing the share repurchase plan on July 12, the company has repurchased 0.5858 million shares as of July 30, accounting for 0.19% of the total issued share capital, and the total amount of capital paid was HK$4.2072 million (not including transaction fees), demonstrating management's confidence in the company's future development.
2. The business data for the first half of the year performed well, reflecting the company's ability to commercialize. According to the company's announcement and official account, the company's 1Q24 revenue was 34.1 million yuan, or +123%. Among them, Bailleul's French small white tube Q1GMV increased 60% +, and the ROI exceeded 2.6, which turned a loss into profit for the first time without employee compensation; during the “618” period, the company's GMV exceeded 56.2 million yuan, an increase of nearly 5 times. Among them, the GMV for the hair line and skin care product line respectively exceeded 21.5/34.7 million yuan, reflecting the company's good online operation and commercialization capabilities.
3. A variety of pipelines are expected to be launched in 2H24-25, and we are optimistic about medium- to long-term growth space. ① The NDA for topical use of minocycline (CU-10201) was accepted in September 23 and included in the priority review process, and the results of its phase III clinical trial in China were recently published online in the authoritative international dermatology journal JEADV. The company is expected to be approved in 2H24; ② the NDA for topical finasteride (CU-40102) in mainland China was accepted in January 24, and the company is expected to be approved in 25; ③ lidocaine (CU-30101) is expected to be approved in 25. Furthermore, pipelines for thyroid hormone receptor agonists, recombinant mutant collagenase, and novel small-molecule drugs for external use are progressing smoothly. We are optimistic about the company's medium- to long-term growth space as a skin management platform.
Profit forecasting and valuation
Maintain revenue and profit forecasts for 2024-25. Maintaining an outperforming industry rating, taking into account changes in market risk appetite and the decline in the sector's valuation center, the target price was lowered by 13% to HK$11.0 according to the DCF model, which has 45% room to rise compared to the current stock price.
risks
Product commercialization falls short of expectations; clinical progress falls short of expectations; risk of medical malpractice.