Investment Rating - The report assigns a "Buy" rating for CSPC Pharma with a 12-month price target of HK$8.74, indicating a downside potential of 1.2% from the current price of HK$8.84 [6][7]. Core Insights - CSPC Pharma has announced a strategic research collaboration with AstraZeneca (AZ) to leverage its AI technology platform for the development of novel oral small molecules, including a pre-clinical therapy for immunological diseases. The deal includes an upfront payment of US$110 million, potential development milestone payments of up to US$1.62 billion, and sales milestone payments of up to US$3.6 billion, along with potential single-digit royalties based on net sales [1][2]. - The total deal size of US$5.3 billion is noted as the highest since 2023, reflecting growing recognition from multinational corporations (MNCs) for CSPC's technology platforms and innovative assets. This suggests potential opportunities for licensing and collaboration for CSPC's other platforms, such as mRNA, siRNA, fusion proteins, and long-acting injections [2]. Summary by Sections Collaboration with AstraZeneca - CSPC Pharma has entered into a collaboration with AstraZeneca to utilize its AI technology platform for drug discovery, marking its first business development deal after guidance for three potential deals exceeding US$5 billion [1]. - The agreement allows AZ to exercise global rights for selected pre-clinical candidates, with CSPC receiving significant upfront and milestone payments [1]. Financial Projections - CSPC's projected revenue for the upcoming years is as follows: Rmb 29,009.3 million for 2024, Rmb 30,087.6 million for 2025, Rmb 32,392.2 million for 2026, and Rmb 35,297.2 million for 2027 [7]. - The report also highlights CSPC's enterprise value at HK$91.5 billion and a market capitalization of HK$101.8 billion [7]. Valuation Methodology - The 12-month price target of HK$8.74 is derived from a sum-of-the-parts (SOTP) valuation, which includes DCF-based valuations for various segments of the business, factoring in a discount rate of 9% [6].