Events:

Recently, the company released its 2024 annual results announcement and held a conference call to update the business progress.

Opinion:

The company's performance has grown significantly and achieved a turnaround. In 2024, the company will achieve revenue of 5.823 billion yuan, a year-on-year increase of 936.31%, of which the revenue from intellectual property licensing will be 5.332 billion yuan, and the revenue from chemical drugs and proprietary Chinese medicine preparations will be 487 million yuan. The significant increase in the company's revenue was mainly due to the receipt of an irrevocable, non-deductible upfront payment of US$800 million from its overseas partner, BMS, based on the BL-B01D1 (EGFR×HER3 bispecific antibody ADC) collaboration agreement. In 2024, the company's sales expenses will be 215 million yuan, a year-on-year decrease of 14.58%; management expenses were 190 million yuan, a year-on-year increase of 63.22%; R&D expenses were 1.443 billion yuan, a year-on-year increase of 93.34%, mainly due to the large increase in test and inspection fees, material costs, and employee salaries.

In 2024, the net profit attributable to the parent company will be 3.708 billion yuan, an increase of 4.488 billion yuan over the same period of the previous year, turning losses into profits. As of December 31, 2024, the company's cash and cash equivalents were $3.208 billion.

B01D1 is expected to be listed in China by the end of 2025, and the first phase 3 overseas is expected to be launched in 25H1. BL-B01D1, the company's world-first EGFR×HER3 bispecific antibody ADC drug, has been in Phase 3 clinical trials for 9 solid tumor indications in China (5 of which are included in the Breakthrough Therapy List), and is expected to apply for the marketing application of the first indication by the end of the year. Overseas, the company has reached a global cooperation agreement with BMS, and is carrying out a number of phase 1/2 clinical trials for the treatment of NSCLC and advanced solid tumors in the United States, and is expected to start the first phase 3 clinical trial in 2025H1.

The two major ADC platform products of DNA topoisomerase inhibitor and microtubule toxin were advanced at the same time, and the pipeline echelon was initially formed. The company has 14 clinical-stage drug candidates and more than 70 clinical trials worldwide. The company's HER2 ADC product with BIC potential has BLM07D1 carried out two phase 3 clinical trials in China and is advancing clinical trials in the United States. BL-M11D1 (CD33 ADC) is in a Phase 1 clinical study in China and the United States for the treatment of relapsed/refractory acute myeloid leukemia (r/r AML). BL-M14D1 (DLL3 ADC), BL-M08D1 (TROP2 ADC) and two microtubule toxin-based ADCs (EGFR× HER3 and HER2 targets, respectively) have advanced to the clinical stage. In the field of polyclonal antibodies, the company has four products in the early clinical stage, among which GNC-038 (CD3×4-1BB×PD-L1×CD19) has initiated clinical trials for systemic lupus erythematosus and rheumatoid arthritis indications. In addition, the clinical study of SI-B001, the company's EGFR×HER3 bispecific antibody product for the indication of non-small cell lung cancer, has entered the Phase 3 stage.

In 2025, we will focus on the data readout of the overseas Phase 1 clinical trial of B01D1 and the initiation of the first overseas Phase 3 clinical trial. 1) Domestic progress: BL-B01D1 is expected to complete phase 3 clinical trials of nasopharyngeal carcinoma and esophageal cancer in 2025 and submit a marketing application; 2) Overseas progress: The overseas Phase 1 clinical trial of BL-B01D1 is progressing smoothly, and the data is expected to be read out in 2025; In addition, BMS is expected to initiate the first overseas registration phase 3 clinical trial in 2025H1; 3) Data catalysis: (1) The POC data of BL-B01D1 for the treatment of SCLC and rare mutant NSCLC are expected to be read out in 2025 ASCO; (2) Phase 2 data of BL-B01D1 in combination with osimertinib in the first-line treatment of EGFR-mutant NSCLC are expected to be read out at the 2025 academic conference; (3) BL-M11D1 (CD33 ADC) for r/r AML is expected to be updated in 2025 ASH data; 4) Declare the IND of the first nuclear drug product within 2025.

Investment Advice:

We use the DCF method and the NPV method to calculate the average of the two to calculate the target market capitalization of RMB 133.7 billion, corresponding to the stock price of RMB 333.52, and maintain the "buy" rating.

Risk warning: R&D or sales are less than expected risk, industry policy risk.