Key points of investment
Event: Recently, the company released its 2023 annual report. In the first half of 2023, the company achieved revenue of 295 million yuan, an increase of 0.45% year on year. Excluding the impact of revenue from magnetic bead products used for nucleic acid testing in the same period last year, revenue increased 14.04% year on year; achieved net profit of 32 million yuan, a year-on-year decrease of 80.72%; achieved net profit of 19 million yuan, a year-on-year decrease of 81.16%. In the second quarter alone, the company achieved revenue of 163 million yuan, an increase of 6.59% over the previous year.
Realized net profit was 119 million yuan, a year-on-year decrease of 81.31%, and realized net profit not attributable to parent was 131 million yuan, a year-on-year decrease of 71.24%.
In the first half of 2023, the company's gross profit margin was 79.06%, year-on-year -2.15 pct, mainly due to changes in the product structure after the company merged Spectrum Instruments. The company's sales expenses rate was 19.46%, +6.36 pct over the same period last year. The management fee rate was 22.73%, +10.19 pct over the previous year. The R&D cost rate was 28.24%, +14.92 pct over the previous year, mainly due to the company introducing a number of high-end technical talents in 2022 to enhance innovation capabilities and lay out product development plans for key critical needs.
In the first half of 2023, the company achieved revenue of 270 million yuan in the biomedical sector, an increase of 12.09% over the same period last year; sales revenue of chromatographic fillers and chromatographic media products was 211 million yuan, an increase of 5.45% over the same period last year; revenue from filler products accounted for 71.46% of total revenue this year, an increase of 3.51 percentage points over the previous year. Sales revenue of chromatographic fillers and chromatographic media products used in pharmaceutical companies' official production or phase III clinical projects was about 104 million yuan, accounting for 49.15% of this year's filler and media product revenue, an increase of 8.10 percentage points over the same period last year. In the first half of 2023, the number of application projects introduced by the company's chromatographic fillers and chromatography media at various stages increased markedly. About 630 new project applications were achieved. The number of new project applications in the first half of 2023 accounted for about 22% of the cumulative number.
The industry was under pressure in the short term, and there was a month-on-month recovery in Q2. Under the influence of an unfavorable external environment at the beginning of this year, the company achieved revenue of 132 million yuan and 163 million yuan respectively in the first and second quarters. Revenue in the second quarter increased by 23.41% month-on-month. Among them, revenue from chromatographic fillers and chromatographic media products increased 31.50% month-on-month, and the overall recovery momentum was good. Excluding two influencing factors, such as amortization of share payments and investment income from the acquisition of Spectrum Instruments in the same period last year, the company achieved net profit of 93.8667 million yuan in the first half of 2023, a year-on-year decrease of 25.50%; the company achieved net profit deduction of 81.3811 million yuan in the first half of 2023, a year-on-year decrease of 29.31%. The amortization amount of the company's share payment expenses in the first half of 2023 was 63.3608 million yuan, an increase of 50,00624 million yuan over the previous year.
Profit prediction: The company focuses on the preparation and application technology research of high-performance nanomicrospheres. The industry in which it is located has high technical barriers and strong customer stickiness. As a leading microsphere manufacturer in China, the company occupies a certain market space with stable product quality, complete product types and professional application technology services. We adjusted our profit forecast for the company. We expect 2023-2025 EPS to be 0.26, 0.44, and 0.64 yuan, maintaining the “increase” rating.
Risk warning: performance falls short of expectations; new orders fall short of expectations; industry competition intensifies.