[Report Guide].

1. Deeply cultivate the clinical cure market for hepatitis B, and continue to increase the volume of paigbin.

2. Continue to increase R&D investment and enrich the product matrix for liver disease treatment.

3. Profit margins continued to improve and expenses were well controlled.

Key takeaways

Event: On the evening of March 27, the company released its 2024 annual report, in 2024, the company achieved revenue of 2.817 billion yuan, a year-on-year increase of 34.13%, a net profit attributable to the parent company of 828 million yuan, a year-on-year increase of 49%, and a net profit of 827 million yuan, a year-on-year increase of 42.73%. In 2024Q4, the company achieved revenue of 862 million yuan, a year-on-year increase of 34.65%, a net profit attributable to the parent company of 273 million yuan, a year-on-year increase of 46.59%, and a net profit of 246 million yuan, a year-on-year increase of 46.13%.

Deeply cultivating the clinical cure market for hepatitis B, Paigebin continues to increase volume. In 2024, the company's revenue and profit will grow strongly, mainly due to the continuous expansion of Paigbin. In March 2024, the marketing authorization application for the added indication of Paigebine in combination with nucleos(t)ide analogues for the clinical cure of chronic hepatitis B in adults was accepted by the NMPA. In 2024, the company's antiviral drug (Paigrabin) will achieve revenue of 2.447 billion yuan, a year-on-year increase of 36.72%, and a sales volume of 4.1071 million, a year-on-year increase of 44.28%; Hematology/tumor drugs (Telli, Teljin, Telkang and Peijin) achieved revenue of 363 million yuan, a year-on-year increase of 19.71%, and sales volume of 12.8942 million, a year-on-year increase of 2.73%.

We will continue to increase R&D investment and enrich the product matrix for the treatment of liver diseases. In 2024, the company's R&D investment will be 342 million yuan, a year-on-year increase of 22.34%. The company continues to steadily advance a number of research projects through independent innovation and external cooperation: (1) In January 2024, the drug registration and marketing authorization application of Yipei Growth Hormone Injection (Yipeisheng) was accepted by the State Food and Drug Administration; (2) Y-type polyethylene glycol recombinant human erythropoietin (YPEG-EPO) project is preparing for phase III clinical studies; (3) In July 2024, the new indication of "essential thrombocythemia" was approved by the State Food and Drug Administration for drug clinical trials; (4) In January 2025, the new indication of "suitable for reducing the incidence of preeclampsia" was approved by the NMPA for drug clinical trials; (5) AK0706, human interferon α2b spray, and ACT500 are in phase I clinical studies; (6) ACT50, ACT60 and ACT300 projects are carrying out pharmaceutical and preclinical studies. In addition, the company continued to open up and cooperate with the outside world to actively expand its product pipeline in the field of liver diseases: (1) in May 2023, it signed a cooperation agreement with Aligos on nucleic acid technology for the treatment of hepatitis, and obtained the exclusive option for development and commercialization in China; (2) signed a cooperation agreement with Alphamab Oncology in December 2023 and selected KN069 as the first licensed product in July 2024; (3) In September 2024, it signed a cooperation agreement with Fujiji Pharmaceutical to obtain NM6606 and related intellectual property rights for the development of monotherapy products for the treatment of liver fat metabolism and liver fibrosis-related diseases.

Margins continued to improve and expenses were well controlled. In 2024, the company's gross sales margin will be 93.49%, an increase of 0.16pct year-on-year, and the net profit margin of sales will be 29.38%, an increase of 2.93pct year-on-year. In terms of expenses, the company's sales, R&D, management, and financial expense ratios in 2024 will be 39.52%, 9.88%, 10.46%, and -0.08%, respectively, of which the sales, R&D, and management expense rates will decrease by 0.89pct, 0.13pct, and 0.49pct year-on-year, and the financial expense ratio will increase by 0.15pct year-on-year.

Investment advice

The company's long-acting protein modification technology platform has a deep accumulation, rich product pipelines, and the rapid volume of long-acting interferon and long-acting human granulocyte stimulating factor have been marketed.

Risk Warning

The risk of lower than expected enrollment of new hepatitis B patients, the risk of lower than expected clinical progress, and the risk of lower than expected promotion and sales of new products.

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【Galaxy Pharmaceutical Cheng Pei】Company Comments丨Tebao Biotechnology (688278): The performance continues to grow at a high rate, and the equity incentive highlights the long-term value

【Galaxy Pharmaceutical Chengpei】Company Depth丨Tebao Biotechnology (688278): The leader of long-acting protein drugs, optimistic about the continuous increase in the volume of Paigebin

This article is excerpted from: China Galaxy Securities released on March 29, 2025 research report "[Galaxy Pharmaceutical] Company Review Report_Tebao Biological_2024 Annual Report Review: Steady and Rapid Growth in Performance, Paigabin Continues to Increase".

Analysts: Cheng Pei, Sun Yi

Rating system:

The rating criteria are based on the relative market performance of the industry index (or the company's stock price) in the 6 to 12 months after the release date of the report, of which: the A-share market is benchmarked by the CSI 300 Index, the NEEQ market is benchmarked by the 3-Board Component Index (for the target of the agreement transfer) or the 3-Board market-making index (for the target of the market-making transfer), the Beijing Stock Exchange market is benchmarked by the BSE 50 Index, and the Hong Kong market is benchmarked by the Hang Seng Index.

Industry ratings

Recommended: More than 10% increase relative to the benchmark index.

Neutral: The relative benchmark index has risen between -5%~10%.

Avoidance: Relative to the benchmark index fell by more than 5%.

Company ratings

Recommended: More than 20% increase relative to the benchmark index.

Cautious recommendation: relative to the benchmark index increase between 5% ~ 20%.

Neutral: The relative benchmark index has risen between -5%~5%.

Avoidance: Relative to the benchmark index fell by more than 5%.

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