Performance: 23H1 achieved revenue of 295 million yuan (+0.45%), excluding the impact of revenue from magnetic beads used for nucleic acid testing (testing revenue of 3.51 million in the first half of last year), revenue increased by 14.04% in the first half of the year. Q1 and Q2 achieved revenue of 132/163 million yuan respectively. Q2 revenue increased 6.59% year on year and 23.41% month on month. Net profit for the first half of the year was 3.183 million yuan (-80.72%), net profit not attributable to parent was 19.34221 million (-81.16%). Considering 23H1's equity incentive expenses were about 63.36 million yuan, the non-expended revenue of 51.54 million yuan for the same period last year, excluding the influence of two factors, 23H1's net return profit was 93.87 million yuan (-25.5%), after deducting net profit of 81.38 million yuan (-29.31%). 23H1's overall gross profit margin was 79.06% (-2.15pct), due to changes in the product structure after merging the scores. 23H1's net interest rate was 8.49%.

Biomedical sector: 23H1 had revenue of 270 million yuan (+12.09%), accounting for 91.48% of total revenue. Among them, the revenue of chromatographic fillers and chromatographic media 23H1 million yuan (+5.45%) was 211 million yuan (+5.45%), the gross profit margin of chromatographic fillers and chromatographic media in the first half of the year was 85.7% (+0.62 pct), and the revenue of single Q2 chromatographic fillers and chromatographic media increased 31.5% month-on-month. The revenue for chromatographic fillers and media in the first half of the year was 104 million yuan, accounting for 49.15% of the filler and media revenue (+8.1 pct). Revenue from separation and purification of macromolecules was 141 million yuan (+6.73%), and revenue from separation and purification of small molecules was 58 million yuan (-9.92%).

R&D investment: 23H1's R&D expenses were 83.3558 million (+112.95%), accounting for 28.24% of total revenue (+14.92 pct). 23H1's R&D expenses included 22.9158 million in equity payments, an increase of 1,418,600 over the same period last year. After excluding equity payments, R&D expenses increased 69.55% year-on-year.

The company has built a complete biopharmaceutics and chiral drug separation and purification laboratory and pilot expansion platform. In addition to the Suzhou headquarters, the company has application laboratories in Boston, Chengdu, Beijing and Guangzhou, and has signed strategic partnerships with Zhaoyan Biotech, Kangfang Pharmaceutical, Jinsai Pharmaceutical, and Kingsri.

Profit forecast and rating: The company is expected to achieve revenue of 708/807/935 million yuan in 23-25, a year-on-year growth rate of 0.3%/14%/15.9%; return net profit of 0.76/0.92/116 million yuan, a year-on-year growth rate of -72.2%/20.7%/25.9%. Give it an “increase in holdings” rating.

Risk warning: Product sales fall short of expectations, increased market competition, changes in the macroeconomic policy environment, etc.