Event: the company released a semi-annual report in recent days, achieving operating income of 309 million yuan, an increase of 33.8% over the same period last year. The net profit belonging to shareholders of listed companies was 54 million yuan, an increase of 4.39% over the same period last year, deducting non-net profit of 52 million yuan, and an increase of 4.29% compared with the same period last year.
Income maintains a relatively rapid growth, and the increase in financial expenses affects profits. In the first half of the year, the company's dominant position in the industry on the dual platform of consumer specialty chemicals and health care services was further consolidated, and revenue from PVP products increased by 16.92% compared with the same period last year. Oruizi sold about 100 tons, contributing a profit of about 9 million yuan; business income from genetic sequencing, early tumor diagnosis and molecular diagnosis services increased by 42.15%, 66.96% and 92.47% respectively compared with the same period last year. The growth rate of net profit was significantly lower than that of income, mainly due to the company's investment in BV and precision medical studios in the first half of the year, and the repurchase of 100 million yuan of shares, resulting in an increase of 12.795 million yuan in financial expenses over the same period last year, and a year-on-year decline in net sales interest rate (4.04pct).
Endogenesis and extension should be carried out at the same time to speed up the reorganization of BV. After re-passing the approval of FDA in the United States, PVP and Orezi will quickly enter the high-end market in Europe and the United States. The company reported that it has signed a three-year major sales agreement with an international well-known pharmaceutical company, which is expected to contribute 190 million yuan in income and 99.645 million yuan in net profit from January 1, 2020. Through the early diagnosis project of breast cancer in cooperation with Heidelberg Medical College in Germany, precision medical business is expected to start the market expansion period next year, with a lot of room for development. The reorganization of BV has been accelerated. The acquisition of new open source organisms on March 16 has achieved a net profit of 16.7 million yuan by the end of June. The completion of the reorganization will greatly enhance the competitiveness of the company's precision medical business.
Maintain a "buy" rating. It is estimated that the EPS of the company in 18-20 years is 0.56,0.82,1.07 yuan respectively, and the current stock price corresponding to PE is 30 times, 21 times and 16 times respectively. The company's specialty chemicals and health care business continue to grow rapidly, at the same time, through the restructuring of BV, participation in Yongtai Biology, the establishment of precision medical studio to accelerate the transformation, the future performance growth space is huge. Maintain a "buy" rating.
Risk hint: the risk that the progress of BV restructuring is lower than expected.
