Incidents:
The company released its semi-annual report for 2023. In the first half of the year, it achieved revenue of 181 million yuan, an increase of 39.05% over the previous year; net profit attributable to the mother - 03 million yuan, a year-on-year decrease of 159.45%; net profit after deducting non-return net profit - 112 million yuan.
In the second quarter, we achieved revenue of 93 million yuan, up 63.13% year on year; net profit of 11 million yuan, up 225.34% year on year; net profit of non-return net profit of 07 billion yuan, up 140.35% year on year, turning loss into profit year on year and month on month.
Demand on the research side has resumed growth, and demand on the industrial side is under pressure in the short term
In the first half of 2023, the company's main business revenue grew steadily. Among them, customized model business achieved revenue of 20.88 million yuan, up 120% year on year; standardized model business achieved revenue of 68.88 million yuan, up 67% year on year; model breeding business achieved revenue of 49.18 million yuan, up 11% year on year; drug efficacy evaluation and phenotype analysis business achieved revenue of 23.5 million yuan, up 16% year on year; breeding services achieved revenue of 14.53 million yuan, up 14% year on year. The introduction model business in customized models and standardized models mainly serves scientific research institutions. The revenue base for the same period last year was low, and achieved relatively rapid growth after full liberalization this year; humanized models in the standardized model, drug efficacy evaluation, and phenotype analysis mainly serve industrial customers. The investment and financing environment is under pressure on industrial capital, and the growth rate of related businesses is not high.
Steadily increase production capacity and strengthen cost control
The company is based in Shanghai and covers the whole country. The Zhongshan base in Guangdong and the base on Beichen Road in Beijing have been put into use. Currently, the total production capacity is about 140,000 cages, and the utilization rate of cages is being optimized and increased. At the same time, the company plans to optimize production capacity layout and reasonably control production costs. The US subsidiary has purchased real estate in Texas to build a laboratory and SPF animal house. After production is put into operation, it will help the company to provide high-quality and fast animal models and pharmacodynamics services to European and American customers nearby, while saving transportation costs. The company plans to build production and R&D bases in cities surrounding Shanghai to undertake high-cost bases in Shanghai that are expiring one after another.
Profit Forecasts, Valuations, and Ratings
Referring to the company's equity incentive plan, we expect the company's operating income in 2023-2025 to be 427/576/777 million yuan respectively, the corresponding growth rate is 41.04%/34.85%/34.77%, net profit to parent is 0.15/0.36/72 million yuan (2023-2024 original value is 0.88/132 million yuan, respectively), and EPS is 0.19/0.46/0.92 yuan/share, respectively. The corresponding PE is 204/84/42 times. As the company is a scarce model animal business, it is recommended to keep an eye on it.
Risk warning: customer demand falls short of expectations; risk of increased market competition; risk of new product development; risk of intellectual property protection and technology leakage; moral and ethical risk.