Junshi Bio is a leading company in China's macromolecular innovative drugs going to sea

Junshi Bio was established in 2012, listed on the Hong Kong Stock Exchange in December 2018 and listed on the Kechuang Board in July 2020. The company currently has three commercial products (Tuoyi, Junmaikang and VV116), and two monoclonal antibodies have been approved by the FDA (JS016, Triplumab).

At this stage, the company has three major expected differences

both overseas and domestic revenue have marginal improvement. 1)PD-1 overseas markets, Treplimab was approved by the FDA for listing, in the United States can be highly priced for orphan drugs, and accelerate global commercialization, the company can achieve stable cash flow through milestone revenue and sales share. 2)PD-1 the domestic market, health insurance indications increased, approved indications expanded, Tuoyi is expected to further release. 3) Other product thickening income: JS004(BTLA), Ongosizumab, Junmaikang, JS005(IL-17A).

R & D and sales efficiency, losses gradually narrowed. 1) Clinical research and service fees are reduced, driving the overall reduction in research and development costs and focusing resources on key projects. 2) The efficiency of clinical execution has been greatly improved.

3) Commercial team execution and sales efficiency, sales expense rate reduction. 4)2023Q3 non-return net profit was -0.388 billion yuan, narrowing for the third consecutive quarter.

many pipelines under research have FIC or Me-Better potential. 1)FIC product JS004(BTLA) combined with Treplimab for LS-SCLC after chemotherapy consolidation treatment into Ph3, China target patients about 40000/year. 2)JS105 (PI3Ka) for PIK3CAm breast cancer and endometrial cancer, China target patients about 150000/years. 3)JS107(CLDN18.2 ADC) is undergoing two clinical phase 1 studies in pancreatic cancer and solid tumors. 4) siRNA drug JS401 for mixed hyperlipidemia is the first small nucleic acid drug to enter clinical ANGPTL3 in China.

catalysts worthy of attention in the company in the near future are as follows

teripilimumab: 1) domestic: by the end of 2023, 3 new indications will be included in medical insurance; 2024H1,4 sNDA approved by NMPA; 2) Overseas: 2024Q2-Q3,ESCC and NPC approved by EMA and MHRA, NPC approved by Singapore and Australia. JS004(BTLA):1)2023ASH,PD-1-resistant Hodgkin lymphoma specific data readout; 2) PD-1-resistant Hodgkin lymphoma submitted to NDA at the end of 2025. Ongosiximab (PCSK9):2024H1, approved by NMPA.

earnings forecast: we forecast the company's operating income in 2023/24/25 to be 11.96/23.15/3.561 billion yuan, and the net profit attributable to the parent company to be -20.12/-11.69/-0.094 billion yuan. The DCF model and the NPV model are included in the Chinese revenue of five products (Tuoyi, Junmaikang, Ongosizumab, JS004, JS005), overseas revenue of JS004, and overseas licensing revenue of Triplumab. The target market value is 56.359 billion yuan, and the corresponding stock price is 59.21 yuan. First coverage, give a "buy" rating.

risk tips

R & D less than expected risk; health insurance negotiation less than expected risk; pharmaceutical industry policy more than expected risk