Incident: Recently, the company released its 2023 annual report. In 2023, the company achieved operating income of 91.2886 million yuan, net profit attributable to shareholders of listed companies - RMB 1,108 billion, and net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss - RMB 1,161 million.

Schwarzhe was approved to go public, beginning the first year of commercialization of the company. On August 22, 2023, Schwarzhe, a novel lung cancer target drug independently developed by the company, obtained approval from NMPA for use in patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) who have progressed through platinum-containing chemotherapy, or are intolerant to platinum-containing chemotherapy, and tests have confirmed the presence of epidermal growth factor receptor (EGFR) exon 20 (exon20InS) mutations. It became the first innovative Chinese drug targeting advanced EGFR exon20ins mutant type NSCLC. The globally registered clinical study for this indication (Goku 1 Part B, WU-KONG1 Part B) has successfully completed the enrollment of all patients. Overseas New Drug Marketing Applications (NDA) are being actively prepared. The latest active research data will be presented for the first time in the form of an oral report at the 2024 American Society of Clinical Oncology (ASCO) conference.

Continuously promote investment in R&D of core products, and all projects are progressing smoothly. In September 2023, the NDA for golisitinib, a highly selective JAK1 inhibitor developed independently by the company to treat r/r PTCL, was officially accepted by the NMPA and included in the priority review process. Currently, Schwarzer is conducting an international multi-center phase III clinical trial “Goku 28” (WU-KONG28) for first-line treatment of EGFR exon20ins mutant advanced NSCLC, as well as a phase II clinical trial “Goku 21” (WU-KONG21) for NSCLC with EGFR TKI-resistant EGFR in combination with golixitinib. Additionally, the company is actively advancing clinical research on DZD8586 to further explore its potential in B-cell non-Hodgkin lymphoma (B-NHL).

Investment advice: The company is an innovative biomedical enterprise focusing on the research, development and commercialization of innovative therapies in the field of malignant tumors and immune diseases. We expect the company to achieve revenue of 4.92/10.94/1,567 billion yuan in 2024-2026, maintaining the “gain” rating.

Risk warning: risk of changes in industry policies, risk of new drug development, risk of uncertain marketing of products under development, risk of poor progress in internationalization, risk of market competition, etc.