Incident: On August 6, 2021, the company announced that its wholly-owned subsidiary Ramey Hong Kong plans to purchase 230,000 of its common shares from Replicor for $13 per share, and is expected to cooperate more extensively in the commercial development of the Chinese market for hepatitis B drugs.

Strengthen the domestic Hepatitis B drug sector by subscribing for shares in Replicor:

Remy Hong Kong, a wholly-owned subsidiary of the company, plans to subscribe for 230,000 shares of Replicor common stock at $13/share to enhance commercial development of the domestic hepatitis B drug market between the two parties. Replicor is committed to developing broad-spectrum antiviral drugs based on nucleic acid polymers (NAP). The proposed equity purchase will help strengthen the company's strategic layout in liver disease fields including but not limited to CHB (chronic hepatitis B) and NASH (non-alcoholic fatty liver disease).

The clinical effect of the NAP broad-spectrum antiviral drug Rep2139 in the treatment of hepatitis B is obvious:

Replicor began focusing on NAP drug development for chronic hepatitis B in 2008 and optimized the current NAP candidate, Rep2139. According to the company announcement, 90% of the 40 patients receiving the combination of Rep2139+ tenofovir+ interferon showed a significant decrease in HBsAg (hepatitis B surface antigen). The Rep2139 treatment group achieved a 50% functional cure after one year of follow-up after the end of treatment, and the efficacy of Rep2139 was superior.

Investment advice: It is estimated that in 2020-2022, net profit attributable to the mother will be 501 million yuan, 109 million yuan and 143 million yuan respectively, up 115.6%, 113.8%, and 31.7%, respectively; the purchase will be given an investment rating of -A.

Risk warning: risk of new drug development falling short of expectations, risk of product sales falling short of expectations, risk of cooperation falling short of expectations, etc.