Core Viewpoint - The report from China Merchants Securities gives a "strong buy" rating for Sangfor Pharmaceutical (01530), highlighting the potential of its PD-(L)1/VEGF dual antibody, SSGJ-707, as a cornerstone drug in next-generation immuno-oncology (IO) treatment [1][2] Company Background - Sangfor Pharmaceutical, established in 1993, is a leading biopharmaceutical company in China with extensive experience in R&D, production, and sales of biological drugs [1] - The company has a solid product pipeline in various therapeutic areas, including nephrology, oncology, and autoimmune diseases, and maintains a strong domestic commercialization capability [1] Product Pipeline and Clinical Development - SSGJ-707 is expected to become a significant player in global tumor immunotherapy, with multiple first-in-class (FIC) molecules entering clinical stages [2] - A major licensing agreement with Pfizer includes a $1.4 billion upfront payment, up to $4.8 billion in milestone payments, and a $100 million equity investment, marking a record for domestic PD-(L)1/VEGF dual antibodies [2] - Pfizer plans to initiate seven global clinical trials for SSGJ-707, positioning it as a cornerstone therapy across various cancer types [3] Commercialization and Revenue Growth - Sangfor's core product, TPIAO, is projected to generate revenue of 5.06 billion yuan in 2024, with growth potential due to new indications and strong market positioning [4] - The company maintains a leading position in the rhEPO market, expecting combined sales of 1.019 billion yuan from its dual brands in 2024, capturing a 42% market share [4] Financial Forecast and Investment Rating - Revenue projections for Sangfor from 2025 to 2027 are 18.52 billion, 11.55 billion, and 11.78 billion yuan, with net profits of 9.77 billion, 3.72 billion, and 3.28 billion yuan, respectively [5] - The company is assigned a "strong buy" rating based on its growth potential and robust financial outlook [5]