Results for the first half of 2024: The company's 2024H1 revenue was 54.68 million yuan, mainly CMG901's first R&D milestone revenue; sales expenses were 21.293 million yuan; management expenses were 71.032 million yuan, down 9% year on year; R&D expenses were 0.334 billion yuan, up 40% year on year; net loss 0.337 billion yuan. As of June 30, 2024, the balance of current assets was $2.788 billion. The Chengdu production base can provide a total production capacity of 18,600 liters, which can meet the commercial production of 5-15 antibody drugs at the same time, and plans to continue to expand production; the commercial team is expected to exceed 200 people in 2024, giving priority to covering the two major departments of dermatology and rhinology.

CM310, IL-4Rα (, IL-4Rα) was approved immediately: 1) The NDA for treating moderate to severe atopic dermatitis (AD) in adults was accepted by the CDE in December 2023, and is expected to be approved in Q4 in 2024; 2) NDA applications for the treatment of allergic rhinitis and chronic sinusitis with nasal polyps were each accepted by CDE in the first half of 2024; 3) Registered clinical trials for the treatment of moderate to severe atopic dermatitis in adolescents will be initiated in 2024 Q1; Phase II/III clinical research.

CMG901 (CLDN 18.2 ADC) Global FIC Phase III is in progress: 1) The company and AstraZeneca reached an exclusive global licensing agreement for CMG901/AZD0901. Under the license agreement, AstraZeneca will be responsible for global R&D, production, and commercialization. KYM Biosciences Inc., a subsidiary of Connoah, has a total transaction amount of more than 1.1 billion US dollars, as well as low double-digit tiered royalties. The first $10 million milestone payment was received on 2024 H1. 2) Gastric cancer indications have obtained FDA orphan drug qualification and fast track qualification, and the first case of administration has been completed in the international multi-center phase III study.

The innovation pipeline is rich, focusing on preventing diseases:

1) CM326 (TSLP): In cooperation with Shiyao Group, a phase II trial for the treatment of moderate to severe asthma was initiated in March 2023; enrollment of patients in phase II clinical trials with indications of chronic sinusitis with nasal polyps was initiated in April 2024;

2) CM313 (CD38 antibody): Phase IB/IIa trials for systemic lupus erythematosus (SLE) are being actively promoted; it is planned to promote registered clinical trials for recurrent or refractory multiple myeloma (RRMM).

3) Multiple double antibodies are being investigated: CM355 (CD20/CD3) was promoted in phase I/II clinical trials in the first half of 2024. Currently, IV dose escalation has been completed, and SC is currently undergoing patient evaluation; CM336 (BCMA/CD3) is undergoing clinical phase I/II trials for recurrent or refractory multiple myeloma; CM350 (GCP3/CD3) is undergoing phase I/II trials for solid tumors; CM380 (GPRC5DXCD3) declared IND in July 2024; CM369 (CCR8 antibody) Phase I trials are ongoing.

Innovative Dual Defense completed overseas BD: In July 2024, Belenos Biosciences CM512 and CM536 were successfully authorized as exclusive global interests. Conoa will collect a down payment of 15 million US dollars and recent payments, as well as about 30% of Belenos' equity as consideration. Milestone payments can reach up to 0.17 billion US dollars and can collect net sales shares.

Profit forecast: Based on the company's latest performance and product pipeline implementation, we expect the company's 24-26 revenue to be 0.14, 0.445, and 1.298 billion yuan, up -60.46%, 217.55%, and 192.06%; 24-26 net profit to mother is -0.602, -0.597, and -0.216 billion yuan, up -67.52%, 0.89%, and 63.79% year-on-year.

Maintain a “buy” rating.

Risk warning: Risk of clinical progress falling short of expectations, risk of clinical failure, risk of sales falling short of expectations, policy risk, etc.