Key points of investment:

Incident: Bailey Tianheng released BL-B01D1 excellent data for UC, BTC, and ESCC. 2024ESMO will be held in Barcelona from September 13th to 17th. Bailey Tianheng and BMS will present an oral report or poster presentation on BL-B01D1 for UC, BTC, and ESCC indications.

Immunotherapy combined with chemotherapy has gradually become the first-line choice for UC, BTC, and ESCC in recent years, but there is a lack of broad-spectrum available drugs for post-treatment where both have failed. BL-B01D1 has shown better disease control (ORR, DCR, PFS) and good safety (controlled hematologic toxicity and extremely low incidence of interstitial pneumonia) compared to other new drugs. We believe it is expected to become the end-line cornerstone drug in these fields in the future.

BMS updates clinical planning for BL-B01D1. BMS released the 2024 ESMO Investor Exchange Document. For BL-B01D1, the company expects to read out the data in 2025 and launch a registered clinical trial in 2025 for BL-B01D1. NCT05983432

Profit forecast. We expect the company to achieve net profit of 4.089/-0.129/-0.905 billion yuan in 2024-2026, corresponding EPS of 10.20/-0.32/-2.26 yuan, respectively. Using the DCF valuation method, the corresponding reasonable stock price was 214.73 to 226.83 yuan, giving it a “superior to the market” rating.

Risk warning: Drug research and development progress falls short of expected risk, drug sales fall short of expected risk, competition increases risk, policy risk;