Incident: The company released its 2024 semi-annual report, achieving operating income of 0.41 billion yuan (-10.16%), net profit of 0.08 billion yuan (-14.73%) attributable to shareholders of the parent company, and 0.07 billion yuan (-12.18%) of net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss.

The medication used by Sulling dogs is being supplemented with relevant research. In 2023, “Su Ling” successfully passed medical insurance negotiations and medical insurance payment restrictions were lifted. The company focused on core terminals and continued to expand the market share and advantages of “Su Ling”.

The application for the registration of viper hemagglutinin for dogs for injections was accepted in 2023. Currently, the relevant research on venomous viper hemagglutinin for dogs is being completed as required.

KC1036 esophageal squamous cell carcinoma phase III clinical progressed rapidly, and thymic tumor phase II clinical enrollment was completed. KC1036 is undergoing clinical research on various indications such as digestive system tumors and thymic tumors. The phase III clinical trial for advanced esophageal squamous cell carcinoma was completed and is currently progressing smoothly; first-line clinical treatment of locally advanced or metastatic esophageal squamous cell carcinoma with PD-1 antibodies is also being enrolled; based on the safety, efficacy and population pharmacokinetics characteristics of KC1036 in adult patients with advanced solid tumors, IND has been approved and has now been reviewed by the Ethical Review Committee; it has now been reviewed by the Ethical Review Committee; the phase II clinical trial for patients with advanced thymic tumors is in 2023 First completed in February For example, the test subjects were enrolled. Currently, all subjects have been enrolled.

The Phase III clinical trial of Jincao Tablets, a Class 1.2 innovative traditional Chinese medicine, has reached the main end point and will soon be declared for marketing. The Phase III clinical trial of Jincao tablets was designed as a multi-center, randomized, double-blind, placebo parallel controlled trial. The main efficacy index was the loss rate of pain after 12 weeks of treatment. In March 2024, this study was completed. The results showed that the pain loss rate of Jincao tablets reached the end of the main study during the 12-week treatment period; the safety and tolerability of Jincao tablets were good, and the incidence of adverse events was low. In July 2024, the results of the ZY5301II phase clinical study were published online in a sub-journal of the leading international medical journal “JAMA”.

Profit forecasting and investment advice. Net profit due to mother for 2024-2026 is estimated to be 0.13 billion yuan, 0.17 billion yuan, and 220 million yuan, respectively, and the corresponding PE is 29X/22X/17X, respectively. With the rapid growth of the company's stock of products such as Su Ling, and taking more measures to improve the layout of the innovative system, KC1036 has shown excellent clinical efficacy and maintained a “buy” rating.

Risk warning: market competition risk, drug price decline risk, new drug development risk.