The performance was lower than expected
Liedman announced the results of the 2016 semi-annual report: operating income was 257 million yuan, down 14.15% from the same period last year; net profit attributed to the parent company was 35 million yuan, down 27.51% from the same period last year, corresponding to 0.08 yuan per share. The performance was lower than expected.
Trend of development
Competition in the industry intensified, revenue declined compared with the same period last year: the company's main products are mainly biochemical reagents. At present, the competition in the biochemical reagent industry is becoming increasingly fierce, and the company has also adjusted its sales channels. In the first half of the year, the company's operating income fell 14.15% compared with the same period last year. Net profit dropped 27.51%. In the first half of the year, the operating income of Desai system and Desai products totaled 116 million yuan.
Actively promote product line expansion: at present, the company's independent research and development of chemiluminescence instruments have been put on the market, chemiluminescence business is expected to become a new growth point of the company. During the reporting period, the company has a total of 25 chemiluminescence reagent projects under development, at the same time, the chemiluminescence instrument cooperated with IDS has also obtained the drug equipment registration certificate, which is being promoted in the third-level hospital.
Start the extension expansion strategy and expand new business: in the future, the company is expected to continue to enrich its product line along the testing field. At the same time, the company uses Desai resources to actively expand molecular diagnostic business and increase growth points.
Profit forecast
We downgrade our profit forecast and estimate that the EPS in 2016 and 2017 will be 0.25 yuan and 0.28 yuan respectively (41% and 41% respectively), a year-on-year decline of 32% and an increase of 11% estimates and recommendations.
At present, the company's stock price corresponds to 55x and 50x PE in 2016 and 2017, respectively. We have lowered our target price to 17 yuan, or 15%, to maintain the recommended rating.
Risk.
The progress of marketing adjustment is slower than expected; the progress of chemiluminescence promotion is slower than expected.
