ASK PHARM(SZ:002755) Tianfeng Securities·2025-05-12 13:30Investment Rating - The investment rating for the company is "Buy" with a target price of 29.35 CNY per share, based on a current price of 17.21 CNY [5]. Core Insights - The company, Aosaikang, focuses on four therapeutic areas: digestion, oncology, resistant infections, and chronic diseases. As of September 2024, it has 32 products passing consistency evaluations, with 13 products winning national procurement bids. Future growth is expected from innovative products such as cell factor therapies and CLDN18.2 and EGFR targeting drugs [1][14]. - The SmartKine platform, developed by the company, aims to address the poor druggability of cytokine-based therapies through engineering modifications, allowing selective activation of the immune system to target tumor cells while minimizing systemic toxicity [2][31]. - The clinical progress of ASKB589, a monoclonal antibody targeting CLDN18.2, shows promising results in combination therapies for gastric cancer, with an overall response rate (ORR) of 81.8% and a disease control rate (DCR) of 100% in high-expressing populations [3][30]. - The company has successfully launched its first innovative drug, Liratinib, for EGFR-mutant non-small cell lung cancer (NSCLC), with both first-line and second-line indications approved [3][4]. Summary by Sections Strategic Transformation - Aosaikang has a strong foundation in the pharmaceutical industry, being a leading player in the digestion drug sector. The company has adapted to national procurement policies, optimizing its revenue structure and achieving profitability after two years of losses [14][20]. - The company has accelerated its focus on innovative drug development, with a robust pipeline of 42 projects, including 9 key innovative drugs [28][29]. Financial Forecast and Market Valuation - Revenue projections for 2025-2027 are estimated at 1.918 billion, 2.169 billion, and 2.935 billion CNY, with year-on-year growth rates of 7.92%, 13.07%, and 35.30% respectively. Net profit is expected to reach 190 million, 289 million, and 530 million CNY during the same period [4][5]. - The company’s market valuation is estimated using a discounted cash flow (DCF) method, assuming a weighted average cost of capital (WACC) of 7.47% and a perpetual growth rate of 0.5% [4]. Product Pipeline and Innovation - The company is advancing its innovative drug pipeline, with significant investments in research and development. The SmartKine platform is a key focus, with two innovative molecules, ASKG315 and ASKG915, currently in clinical trials [2][29]. - The company’s diverse product offerings are expected to drive future growth, particularly in oncology and chronic disease treatments, as it continues to expand its market presence [1][28].