20230904-招银国际-康方生物-09926.HK-Look_forward_to_Ph3_data_readout_of_AK104_and_AK112_in_large_indications_5页_1mb

Akeso (Hang Seng Index 9926) reported strong financial performance in the first half of 2023, with revenue of RMB3.68 billion, driven by sales of its PD-1/CTLA-4 inhibitor AK104 and other products. AK104 sales exceeded the company's initial target, contributing significantly to revenue, and the gross margin remained high at 90.3%. Selling expenses decreased from 66.9% to 60.3%, while net profit stood at RMB2.53 billion. The company maintains a substantial cash balance of RMB5.39 billion.

Product development is robust, with AK104 advancing in Phase 3 trials for multiple large indications, including first-line non-small cell lung cancer (NSCLC) and other cancers, despite potential temporary sales impacts in the second half of 2023 due to a challenging market environment. AK112 is on track for commercialization, with an NDA filed in August 2023 for use in EGFR-mutated non-squamous NSCLC, and ongoing Phase 3 trials showing promising efficacy against Keytruda in early progression-free survival (PFS) data.

The analyst rating is maintained as "BUY" with a target price of HK$51.23, based on a discounted cash flow model, reflecting optimism about blockbuster potential from AK104 and AK112. Financial projections for FY23 to FY25 show revenue growth and net profit expectations, though there are risks associated with clinical trial outcomes and market conditions.

Key risks include potential delays in product approvals, competition from established drugs like Keytruda, and market uncertainties in China. Investors should consult professional advisors due to the high uncertainty in securities, and this report is not an investment recommendation. CMB International's analysis includes standard disclosures and conflicts of interest, emphasizing the need for independent decision-making.