Incident: Recently, the company released its 2024 semi-annual report. 2024H1, the company has not obtained approval for commercial sales of pharmaceuticals. The company achieved operating income of 0.1097 million yuan; net profit loss to mother of 0.1 billion yuan, loss of 0.165 billion yuan in the same period of the previous year; after deducting non-net profit loss of 0.11 billion yuan, loss of 0.182 billion yuan for the same period last year.

Research and development continues to advance. The new HC-1119 drug marketing application for the core product to treat prostate cancer is being reviewed. CDE has completed the review of the HC-1119 pharmacology and toxicology, clinical, statistics, clinical pharmacology and compliance departments, and the drug registration verification has been completed. HP501 as a single agent for treating hyperuricemia/gout has completed multiple clinical phase I/II trials and is actively promoting phase II/III trials; the clinical phase II trial of HP501 for treating gout-related hyperuricemia was approved by the FDA in December 2023; HP501 China's IND application for combined drug use (combined with xanthine oxidase inhibitors) was approved by the NMPA in April 2024.

Deepen international commercial cooperation and empower global clinical teams. HP518 has completed clinical phase I trials in patients with mCRPC in Australia, and the US clinical phase I study application was approved by the FDA; HP518 for AR-positive triple-negative breast cancer was granted FTD by the FDA in June 2024.

The US clinical phase II trial application for HP501 was approved by the FDA, the Chinese clinical trial application for HP537 tablets was approved by the NMPA, and the US clinical trial application was approved by the FDA. The company is actively developing global business and commercial cooperation, and is seeking a wide range of commercial rights licensing cooperation opportunities.

Investment proposal: Based on platforms such as targeted proteolytic PROTAC technology and deuteration technology, the company focuses on innovative drug research and development in therapeutic fields with significant market potential such as cancer and metabolic diseases. We expect the company to achieve revenue of 0/0.22/0.686 billion yuan in 2024-2026 and maintain the “gain” rating.

Risk warning: risk of changes in industry policies, risk of new drug development, risk of uncertain marketing of products under development, risk of poor progress in internationalization, risk of market competition, etc.