Alice announced 2024 interim results. In the first half of 2024, the company's operating income was 1.58 billion yuan, +110.6%: net profit to mother 0.66 billion yuan, +214.8%; non-return net profit of 0.65 billion yuan, and +251.9%. In a single quarter of 2024Q2, the company's revenue was 0.83 billion yuan, +76.6%, month-on-month +12.2%: net profit to mother 0.35 billion yuan, year-on-year +101.7 %, +14.4% month-on-month; net profit without return to mother was 0.35 billion yuan, +110.8% year-on-year, +14.8% month-on-month.

Revenue growth was driven by continued release of vometinib, and sales expenses were well controlled to promote cost reduction and efficiency. The company's sales revenue of 1.555 billion yuan in the first half of 2024 was 1.555 billion yuan, which is the foundation for rapid revenue growth. In terms of expenses, the company's 2024Q2 sales expense ratio was 7.0%, down 7.3 percentage points from the same period last year, and 5.1 percentage points lower than 2024Q1:4.0% 1 reduced 2.7 percentage points compared to the same period last year and 0.8 percentage points compared to 2024Q1; R&D expenses rate 8.1%: 25 percentage points lower than the same period last year, 0.6 percentage points lower than 2024Q1. The absolute value of R&D expenses was 0.067 billion yuan. The company continues to promote cost reduction and efficiency, and the net profit margin for the single quarter continues to increase. The net profit margin for the 2024Q2 single quarter reached 42%

The R&D project is progressing smoothly. Internal and external research pipelines are abundant. In terms of internal research, the company's main product, vometinib, 2O exon insertion mutation NSCLC first-line treatment indications, was included as a breakthrough treatment. The Sichuan clinical trial for patients with non-squamous NACLC with unknown GFR-sensitive mutations was approved by IND. The company's self-developed KRASG12D inhibitor AST2169 liposome phase I clinical trial was approved. External introduction: The company and Heju announced that they will launch clinical research on the combined use of oral PD-L1 small molecule ABSKO43 and vormetinib to treat NSCLC, announced the introduction of the next-generation EGFR oral small molecule inhibitor AST2303 from Heyu, and have submitted an IND application

Maintain “Highly recommended investment ratings. Alisvometinib is continuing to be released at a high rate, while actively expanding indications through clinical trials, and cooperating with ARRVENT to complete overseas travel: at the same time, it is actively expanding the research pipeline through endogenous R&D and external cooperation. We expect that Alice's net profit for 2024-2026 will be 1.07 billion yuan, 1.42 billion yuan, and 1.62 billion yuan, respectively, +65%, 33%, and 15% compared with the same period. Compatible PE is 23x, 18x, and 15x, respectively. Maintain a “Highly Recommended” investment rating.

Risk warning: risk of R&D falling short of expectations, risk of sales falling short of expectations, risk of changes in the payment environment, risk of foreign cooperation, etc.