Introduction to this report:

The company is based on innovation at the source, and its core products are entering the global market. Sulvortinib and golisitinib have entered the harvest period one after another. Early pipelines were abundant and full of potential. They were covered for the first time, and were rated for increasing holdings.

Key points of investment:

Covered for the first time, an increase in holdings rating is given. Based on innovation at the source, the company has built a differentiated pipeline with global competitiveness. The core products sulvortinib and golisitinib have entered the harvest period one after another.

The company's revenue for 2024-2026 is estimated at 0.467/0.973/1.582 billion yuan, respectively. Combining the absolute valuation method and the relative valuation method, the target price was 61.82 yuan. Covered for the first time, an increase in holdings rating is given.

Suvortinib broke through an intractable mutation in lung cancer, and the global market gradually entered a harvest period. EGFR ex20ins is an intractable NSCLC mutation. Traditional EGFR-TKI has limited efficacy, and there is a shortage of clinical medication.

Suvortinib accurately inhibits this EGFR refractory mutation subtype and has been recognized as a breakthrough treatment in China and the US. The second-line registered clinical WU-KONG6 (domestic) and WU-KONG1B (international) all showed the best potential in the world. After approval for domestic marketing, it ushered in rapid release, and has already been declared for listing in the US; in addition, suvortinib is further developing international multi-center registered clinical trials to expand the first-line EGFR ex20ins market to give full play to the best potential in the same category. Suvortinib was approved domestically in August 2023, and the company achieved revenue of 0.338 billion yuan in 2024Q1-Q3, +744% over the same period. It is mainly driven by this product, and the rapid volume growth trend is expected to be maintained.

Golisitinib has achieved a new breakthrough in the field of PTCL, providing new treatment options. The treatment of PTCL is highly dependent on chemotherapy. There is no effective means for late-line treatment, and the survival of relapsed/refractory patients is poor. Golisitinib is a next-generation JAK1 inhibitor. Based on an innovative mechanism at the source, clinical breakthroughs have been achieved against r/r PTCL. The international multi-center registered clinical JACKPOT8 study has achieved excellent curative results. The clinical benefits are significantly superior to other existing treatments, and it has entered clinical guidelines. Golisitinib was approved for listing in the Chinese market in June 2024, providing further performance growth, and is expected to enter the commercialization stage overseas.

The early R&D pipeline is abundant, and the production of global pioneers continues to be produced. DZD8586 is the world's first LYN/BTK inhibitor developed by the company. Early data is impressive. It has broad application potential for B-NHL in DLBCL, CLL/SLL, etc., and provides new ways to overcome BTK inhibitor resistance, which is expected to fill clinical gaps. Furthermore, various early clinical pipelines such as DZD6008, DZD2269, and DZD1516 continue to advance, and it is expected that the world's first or the world's best molecular potential will be verified one after another.

Risk warning. Clinical trial progress falls short of expectations; risk of failure in new drug development; risk of falling short of expectations in marketing and sales; risk of falling short of expectations in international business progress.