the company released its annual report for 2023: the company achieved revenue of 1.503 billion yuan in 2023, up 3.4 percent year-on-year; net profit attributable to the parent -2.283 billion yuan, a year-on-year loss of 0.105 billion yuan; net profit deducted from the parent -2.298 billion yuan, a year-on-year loss of 0.153 billion yuan. At present, the company has three types of drugs commercialized, drug sales revenue growth to promote performance growth, the core variety of Treplimab in 2023 to achieve sales revenue of about 0.919 billion yuan, an increase of about 25%.

internationalization breakthrough, PD-1 overseas commercialization volume can be expected. In October 2023, the company was approved by the U.S. FDA for the full-line treatment of advanced nasopharyngeal cancer. According to the company's performance materials, the sale of nasopharyngeal cancer indications in the United States is expected to reach a sales peak of $0.2 billion in 2.5-3 years. At the same time, the European Union, the United Kingdom, Australia and other companies have accepted the listing application of treplimab, the company continues to expand the global commercial network, to help treplimab overseas sales volume.

adhere to the innovation investment, accelerate the progress of the core pipeline research and development. The company continued to improve quality and efficiency, focusing on core pipelines, with research and development costs of 1.937 billion yuan in 2023, down 18.7 percent year-on-year. (1) The global FIC drug anti-BTLA monoclonal antibody independently developed by the company started the international multi-center Phase III clinical study;(2)PCSK9 monoclonal antibody is in the stage of listing application, and IL-17A monoclonal antibody enters the phase III clinical study stage;(3) At the same time, the company accelerated the research and development progress of early high-quality pipelines such as JS107(CLND18.2 ADC) and JS207(PD-1/ VEGF).

earnings forecasts and investment recommendations. We expect the company's 24-26 annual income to be 20.27 yuan, 30.33 yuan and 4.108 billion yuan respectively. Using risk-adjusted DCF valuation method, the reasonable value of A shares of the company is 52.09 yuan/share. Considering the valuation premium of A/H shares, corresponding to HK $19.37/share of Hong Kong shares, we maintain the "buy" rating of A shares and Hong Kong shares.

risk tips. Overseas commercialization process is less than expected, in the research pipeline is less than expected, the commercialization of new drugs after the market is less than expected, market competition increases risk.