ASK PHARM(SZ:002755) Orient Securities·2024-03-11 16:00Investment Rating - The report assigns a "Buy" rating for the company, with a target price of 11.26 yuan, based on an absolute valuation of the company's free cash flow, predicting a reasonable market value of 104.48 billion yuan [28]. Core Insights - The company is positioned at the brink of innovation realization, transitioning into a comprehensive pharmaceutical enterprise. It has been significantly impacted by centralized procurement from 2019 to 2022, but is now experiencing a rebound in 2023 as sales recover and new generic drugs are launched [29]. - The company is actively pursuing innovation, investing heavily in R&D for new drugs, particularly in oncology, and has established a leading technical platform [29]. - The report highlights three core products nearing market entry or in critical clinical stages, including a Claudin18.2 monoclonal antibody for gastric cancer, a third-generation EGFR-TKI, and a new oral iron supplement, all expected to contribute significantly to revenue [29][11]. Summary by Sections Section 1: Company Overview - The company has largely cleared the risks associated with centralized procurement and is at a performance inflection point [29]. - The founder has a deep commitment to the industry and is focusing on innovation transformation [29]. Section 2: Innovative Products - The company has several key products expected to enter commercialization in 2024, including those targeting oncology and a new oral iron supplement [6][29]. - The R&D pipeline is progressing well, with several products expected to reach the market soon, enhancing the company's growth potential [11][29]. Section 3: Existing Business - The historical impact of centralized procurement is expected to diminish, with sales of previously affected products showing signs of recovery [29]. - The company has successfully launched several first-generic and difficult-to-genericize products, creating a pipeline of new offerings [29]. Section 4: Profit Forecast and Investment Recommendations - The company is projected to have a net profit of -1.56 billion yuan in 2023, with a gradual recovery to 0.12 billion yuan in 2024 and 0.74 billion yuan in 2025 [10]. - The report emphasizes the potential for improved profitability and valuation due to the upcoming product launches and reduced R&D and sales expenses [11][29].