Event description
On August 30, 2023, Southern Model Biology released the semi-annual report of 2023: the company's 2023H1 realized operating income of 181 million yuan, + 39.05% compared with the same period last year; the net profit of its mother was-3 million yuan (5 million yuan for the same period last year),-159.45% compared with the same period last year.
Event comment
During the period of business expansion, profits are under pressure, and customization and standardization models are growing rapidly. The company's 2023H1 achieved operating income of 181 million yuan (year-on-year + 39.05%), mainly due to the low income base affected by the epidemic in the same period last year, and the gradual recovery of customer demand on the scientific research side after the release of the epidemic this year. The net profit of homing is-3 million yuan (year-on-year-159.45%), mainly because the growth rate of the company's industrial income in the first half of the year is not high, while the company's development is in the expansion stage, the expansion of production scale leads to a substantial increase in costs and a substantial increase in sales and management expenses. From the perspective of sub-business: the revenue of 2023H1 customized model is 21 million yuan (year-on-year + 119.93%), standardized model is 69 million yuan (year-on-year + 67.05%), model breeding income is 49 million yuan (year-on-year + 10.75%), revenue of efficacy evaluation and phenotypic analysis is 23 million yuan (+ 16.13%), revenue of subdivision business segment has achieved steady growth. The gross profit margin of 2023H1 company is 43.74% (2022H1 gross profit margin is 41.45%, 2022H1 2023Q1 gross profit margin is 40.26%), and the company gross profit margin is significantly improved.
Model richness is the core competitiveness, which constantly promotes the research and development of new strains. The company insists on developing model strains of hot genes in the field of basic research in life science and drug creation, basically achieving comprehensive coverage of commonly used mouse models. By the end of the reporting period, the company had built more than 17000 models and independently developed more than 10000 standardized models, providing customers with more than 7000 customized models. There are 705 humanized models of popular targets such as PD-1, PD-L1, C3, C5, GLP1R, TREM2, CCR8, TTR, LPA, PCSK9 and so on. Based on the single humanized target, double humanized and multi-humanized target models are further developed to serve the frontiers of life science and key biomedical research fields such as molecular targeted therapy, tumor immunotherapy, gene therapy, cell therapy and so on. The R & D cost of 2023H1 is 39.2674 million yuan (+ 67.72% compared with the same period last year), and the continuous innovation R & D investment ensures the company's long-term engine energy.
The domestic brand awareness continues to improve, and the international market continues to open up. Domestic aspect: the company focuses on promoting the immunodeficiency mouse model which is widely used in oncology research and immune system function research, which has formed large-scale sales in China, and promotes brand awareness by participating in various academic summits and industry exhibitions. Overseas: the company continues to strengthen the expansion of overseas markets, carrying out large-scale publicity and promotion of Google advertising, Linkedin, Researchgate and email; participating in various professional conferences such as AACR, AHA, AAI, ASGCT, PEGS, BIO, AAN, Interphex (Japan), EAN and ASCO; and signing orders from a number of large overseas pharmaceutical companies. In the second half of the year, the company will continue to increase market development efforts, improve the efficiency of project completion, and strengthen the ability of cost control.
Profit forecast and investment advice: the company's operating income from 2023 to 2025 is expected to be 413 million yuan, 549 million yuan and 734 million yuan respectively, and the return net profit is 12 million yuan, 28 million yuan and 53 million yuan respectively, corresponding to 0.15,0.35 and 0.69 yuan EPS respectively, maintaining the "buy" rating.
Risk hint
1. Industry competition aggravates the risk.
2. The risk of failure in product development.