Transfered from: Guohai Research Healthcare

event: ze Jing pharmaceutical released the 2023 interim report on August 26: 2023H1 realized revenue of 0.22 billion yuan (+108.66%), mainly due to the steady progress in the commercialization of donafenib tablets, the continuous expansion of the coverage of medical insurance access hospitals and dual-channel pharmacies, and the year-on-year increase in sales volume. Net profit attributable to parent -0.114 billion yuan, loss decreased by 0.133 billion yuan year on year; Net profit attributable to non -0.13 billion yuan, loss decreased by 0.133 billion yuan year-on-year. Sales expenses 0.118 billion yuan (-29.58%) and research and development expenses 0.22 billion yuan (-13.73%).

The commercialization of Donafenib is steadily advancing and is expected to continue to release. The core product Donafenib was approved for liver cancer in June 2021 and thyroid cancer in August 2022. The company continues to actively promote the work of Donafini tablets into the dual channel of medical insurance, as of June 30, 2023 has entered 833 hospitals, 744 dual-channel pharmacies, the coverage of the country to further expand, for the follow-up sales continued to lay the foundation.

the research and development of jack tinib is progressing smoothly, and the NDA for medium and high-risk myelofibrosis has been accepted. In October 2022, NDA application for the treatment of medium and high-risk myelofibrosis by Jackitinib was accepted by NMPA, becoming the first domestic JAK inhibitor to submit NDA. The phase IIB clinical trial of Jackitinib for rucotinib intolerance has been followed up, and the results have reached the preset endpoint. The phase IIB clinical trial for rucotinib recurrent/refractory myelofibrosis has been followed up with good results. In addition, the company has also conducted clinical trials of Jackitinib for severe alopecia areata (Phase III), moderate to severe atopic dermatitis (Phase III), ankylosing spondylitis (Phase III), idiopathic pulmonary fibrosis (Phase II), and moderate to severe plaque psoriasis (Phase II). Jacktini treatment of myelofibrosis has been recognized by the FDA as an orphan drug and is undergoing Phase I clinical trials in the United States.

Recombinant human thrombin has been submitted to the BLA, which is expected to fill the gap in the domestic market. The drug is the first recombinant human thrombin product in China to complete Phase III clinical and submit a listing application. The BLA application was accepted in 2022 and is expected to be approved in the second half of 2023. The product has the characteristics of efficient hemostasis and good safety, and has great potential for wide application in surgical hemostasis. It is expected to fill the gap in the domestic market and meet the urgent clinical needs.

earnings forecast and investment rating: We expect the company's annual revenue for 2023-2025 to be 6.34/12.29/2.44 billion yuan respectively, up 110/94%/98% year-on-year. The company's research and development pipeline continues to cash in, commercialization is progressing smoothly, growth is better, the first coverage, give a "buy" rating.

Risk Warning: Risk of uncertain or lagging product development progress, risk of less than expected commercialization, risk of increased competition, risk of drug price reduction, policy risk, etc.

Securities Research Report: "Zejing Pharmaceuticals (688266)2023 Mid-Year Review: Donafenib Release Rapid, Jack Tinib and Recombinant Human Thrombin Cash Period"

Release date: 1 September 2023

Issued by: Guohai Securities Co., Ltd.

Analyst for this report: Zhou Xiaogang

SAC#: S0350521090002

Contact: Kongweizaki

SAC#: S0350122020035

[Introduction to Medical Group]

Zhou Xiaogang, chief analyst of the pharmaceutical industry, master of economics from Fudan University, bachelor of engineering from Xi'an Jiaotong University, has 5 years of working experience in pharmaceutical industry and 9 years of working experience in pharmaceutical research.

Zhao Ningning, analyst, master of finance from Zhongnan University of Economics and Law, with a background in bioengineering and finance, joined Guohai Securities in 2020 and is now engaged in research in the pharmaceutical industry, mainly covering traditional Chinese medicine and biopharmaceuticals.

Nian Qinggong, Research Assistant, Bachelor of Physics, Peking University, Doctor of Microbiology, Academy of Military Medical Sciences, joined the Medical Group of Guohai Securities Research Institute in 2022, mainly covering vaccines, blood products and upstream life sciences.

Wan Penghui, research assistant, master of pharmaceutical chemistry, Chinese Academy of Sciences, 3 years of pharmaceutical secondary market research experience, mainly covering CXO and soft mirror and other sectors.

Kong Weiqi, Research Assistant, Master of Chemical Biology, School of Pharmacy, Peking University, four and a half years of experience in pharmaceutical equity investment, mainly covering innovative drugs and CXO sectors.