Event: the company publishes its 2022 semi-annual report. During the reporting period, the company realized operating income of 130 million yuan (year-on-year + 6.73%), returned net profit of 4.8843 million yuan (year-on-year-81.64%), and deducted non-return net profit of-7.1374 million yuan (24.311 million yuan in the same period last year).

Comments: the second quarter has a large short-term impact, fixed costs increase suppresses the profit level. The customized model business has a great impact, but the product coefficient of the company's standardized and characteristic humanized mouse model is still growing, and the related standardized model and efficacy evaluation business is expected to recover quickly. The overall cage space of the company continues to increase, regional and overseas expansion is in progress, and the revised draft equity incentive draft is released, which is expected to return to a state of rapid growth after guiding the impact of the epidemic.

Profit forecast and valuation: the company focuses on CRO services such as research and development, sales and related pharmacodynamic phenotypes of genetically modified animal models. At present, the customer resources are rich, and the sales model is mature, forming a good market reputation. It is expected that the company's business is expected to achieve rapid growth. Taking into account the short-term impact, we adjust the profit forecast. The company's EPS is expected to be 0.62,1.15,1.60 yuan in 2022-2024. The PE on August 30, 2022 was 86.4X, 46.9X and 33.6X respectively, maintaining a "prudent overweight" rating.

Risk tips: business operation and schedule is not as expected, technology iteration risk, etc.