Events:

The company released its third quarterly report for 2022: in the first three quarters of 2022, the company achieved operating income of 249 million yuan, down 7.35% from the same period last year, and net profit of 35 million yuan, down 35.26% from the same period last year.

2022Q3, the company achieved an operating income of 94 million yuan, an increase of 7.94% over the same period last year, and a net profit of 12 million yuan, down 35.39% from the same period last year.

Main points of investment:

The impact of the epidemic in the first half of the year led to a decline in revenue, and the construction of a new R & D team led to an increase in costs. The main reason is that the epidemic situation in the first half of the year has a great impact on the company's production and operation, and procurement, production, logistics and sales are all restricted to varying degrees, resulting in a decline in revenue compared with the same period last year. At the same time, the company set up a new R & D and sales team at the beginning of the year, and the salary of the staff increased significantly, resulting in a more obvious decline in net profit.

The gross profit margin decreased slightly compared with the same period last year; the three major expense rates all increased compared with the same period last year. In the first three quarters of 2022, the company's gross profit margin was 48.95%, down 0.79 pct from the same period last year; the company's sales expense rate, management expense rate and financial expense rate were 16.84%, 7.36% and 0.73% respectively, respectively, increasing 2.45/1.10/2.31pct over the same period last year, mainly due to the decline in revenue year-on-year and some cost rigidity, resulting in an increase in expense rate.

ICP-MS sales continue to break through, looking forward to the continuous improvement of market recognition. The company released a new product inductively coupled plasma mass spectrometer LabMS 3000 in May 2021, which broke through the "low temperature cold flame ionization technology" and realized the application of domestic ICP-MS in the chip production line of the semiconductor industry for the first time. It has achieved sales in the semiconductor, medical and traditional fields, further improved the product performance, and realized the repurchase of the leading chip enterprises in the semiconductor industry. The company's inductively coupled plasma series quadrupole mass spectrometer and inductively coupled plasma quadrupole-time-of-flight mass spectrometer are being researched and developed. the research and development will enrich the company's quadrupole mass spectrometry product structure and enhance its competitiveness.

Earnings forecast and investment rating take into account three quarters of reported results, we slightly reduced the company's 2022Universe 2023 Universe net profit to 0.78 trillion in 2024, corresponding to the PE of 42-36-31 times, maintaining the "overweight" rating.

The risk indicates that the sales scale of the mass spectrometer is lower than expected; the landing progress of the research project is not as expected; the risk of increasingly fierce competition in the industry; the risk of product gross profit margin decline; and the risk that the progress of laboratory construction is not as expected.