The company's stock price has fluctuated greatly recently due to factors such as the adjustment of competitors' health insurance prices. We believe that the company's fundamentals are currently stable, that competitive price cuts have a manageable impact on sales expectations of spoxibizumab, and that the global value of several early pipelines is remarkable, maintaining a “buy” rating.

Sales of supibalizumab are expected to be strong, Hengchang

Recently, the market is concerned that Dapituo's medical insurance renewal price reduction will have an adverse impact on the sales of supipimab, and we believe that there is no major adjustment to the sales forecast for supipimab: 1) The company has prepared a plan for dabitol's price reduction in advance. Considering that the sales target of supitumab in 2025 is self-funded patients, we expect the company to still have curative effects and price advantages among self-funded patients after making the adjustments, and there has been no change in patient coverage; 2) The overall price adjustment of IL-4Rα monoclonal antibodies will help improve and extend patient penetration rate; 3) According to Frostosha According to Levin and the Health and Health Commission data, in addition to about 20 million patients with moderate to severe AD, there are about 20 million patients with crSwnP, and the number of SAR patients is also at the level of 10 million. Considering that spiquimab is leading the progress of various indications, we expect that multiple indications will bring more potential than competitors.

Early pipelines have significant global value

The company's many products have gone overseas, and overseas value is expected to gradually show as clinical progress: 1) According to Pharmaceutical Rubik's Cube data, CMG901 is currently the fastest progressing CLDN18.2 ADC in the world. 2L+ GC indications are in phase III globally, and 1L GC and PDAC are being explored in phase II clinical trials. With the return of the rights of other authorized competitors to go overseas, the global competitive pattern or further optimization; 2) The company is leading the global R&D ranking in the field of self-defense. TCE and free immunity are all products that will become NewCo in the next few years Options; in addition, early data on CM313 (CD38 monoclonal antibody) treatment for SLE/ITP is available. Currently, only 3 CD38 antibodies are undergoing IST clinical research with self-exempt indications. Biogen purchased Hi-Bio with fizetumab as a single-core pipeline for 1.8 billion dollars in the middle of this year, which also supports the global value of CM313 from the side. We are optimistic about its potential to go overseas.

Catalytic cashout can be expected

We expect the company to welcome multiple catalysts in the next 12 months: 1) the treatment of allergic rhinitis is expected to be approved within the next 1 year; 2) the company is expected to launch CM313 phase II clinical trials for SLE, ITP, and IgAN on 1H25; 3) CM512 and CM336, which have obtained overseas authorization to go overseas, are expected to launch overseas phase I/II clinical trials in 2025.

Profit forecasting and valuation

Based on the sales expectation of spiquimab without major adjustments, we maintained the 24-26 EPS forecast at (2.54)/(3.29)/(2.05), and the target price based on DCF was HK$60.93 (WACC: 11.4%, sustainable growth rate of 2.5%). Maintain a “buy” rating.

Risk warning: 1) The drug has not achieved the expected positive clinical results; 2) Drug commercialization uncertainty.