Incident: The company announced its 2024 interim results. During the reporting period, it achieved operating income of 3.952 billion yuan, a year-on-year increase of 46.3%; net profit loss of 0.393 billion yuan. Product revenue reached 3.811 billion yuan in the first half of 2024, an increase of 55.1% year over year.
Maxidopeptide is expected to be approved for sale in 2025, and many other late-stage product developments are worth looking forward to. The company's GLP-1R/GCGR dual-target peptide product, Mashidu Peptide, submitted a marketing application (NDA) for weight loss indications to the CDE in February 2024 and was accepted, and the NDA for diabetes was also accepted in August 2024; the above two major indications are expected to be approved for marketing in 2025, and the sales volume after approval for marketing is worth looking forward to. Among other late-stage products, the KARAS G12C inhibitor second-line NSCLC indication has been approved for marketing, the IBI311 (IGF-1R) indication for thyroid eye disease (TED) has been accepted, and the Pikontibimab (IL-23p19) psoriatic indication is expected to be submitted for NDA in 2024.
Early clinical data on PD-1/IL-2 antibodies against IBI263 are excellent, and significant potential is beginning to show. The PD-1/IL-2 double antibody IBI263, the core product in the company's early pipeline, has revealed excellent clinical data on NSCLC, melanoma, etc. at important academic conferences such as ASCO 2024 and 2024 ESMO June General Conference, and will also disclose the latest clinical data at the WCLC 2024 and ESMO2024 conferences to be held in September. Judging from the early clinical data of IBI263, it is initially showing its potential to become the next generation of IO's major drug. Among other early pipelines, innovative molecules such as CLDN18.2 ADC IBI343, CLDN18.2/CD3 dual antibody IBI389, EGFR/B7H3 dual antibody ADC IBI3001, and B7H3 ADC IBI129 in the field of tumors, and innovative molecules such as AGT siRNA IBI3016 and IL-4R/TSLP in the non-tumor field are progressing rapidly, and further progress is worth looking forward to.
Investment advice: We expect the company's revenue from 2024 to 2026 to be 7.947 billion yuan, 11.044 billion yuan, 15.064 billion yuan, and net profit of -0.588 billion yuan, 0.764 billion yuan, and 2.475 billion yuan respectively, corresponding EPS of -0.36 yuan, 0.47 yuan, and 1.52 yuan respectively; considering the volume potential of the company's marketed/upcoming products and rich clinical R&D management Line, we believe that the company's future development prospects are promising. According to the DCF model, a target price of HK$54.37 for 6 months will be given to maintain the investment rating buy-A level.
Risk warning: Risk of clinical trials of innovative drugs falling short of expectations, risk of clinical trial failure, risk of pharmaceutical policy changes, risk of product sales falling short of expectations, risk of uncertainty about the development of the epidemic.