Event: according to the company's mid-2023 report, 23H1 achieved an operating income of 523 million yuan (+ 41.76%YOY), a net profit of 84 million yuan (+ 41.63% YOY), and a non-return net profit of 92 million yuan (+ 56.51% YOY), in line with market expectations.

Q2 performance was in line with expectations, and inventory turnover increased significantly in the first half of the year. 23Q2, the company realized operating income of 270 million yuan (+ 41.00% YOY) and net profit of 46.88 million yuan (+ 38.92% YOY), in line with expectations. Under the background that the demand of innovative pharmaceutical companies and CRO institutions is affected by investment and financing fluctuations, the company's performance in the second quarter maintained high growth. In terms of profitability, 23Q2 achieves a gross profit margin of 38.05% (- 5.91pp YOY) and a net profit margin of 17.27% (- 0.34pp YOY). We judge that gross profit margin is affected by industry competition in the short term. With the increase in the proportion of overseas income and the sales volume of new categories of molecular blocks such as boron / fluorine, the company's gross profit margin is expected to pick up gradually in the medium term. In terms of operating capacity, the inventory turnover of 23H1 Company was 0.54 times, compared with 0.41 times in the same period in 22 years, which increased significantly.

Boron-containing, boron-containing block product line is beginning to have a large-scale advantage, overseas sales continue to grow high. 23H1, the company's molecular block business income of 454 million yuan (+ 38.80% YOY), mainly due to the company's continuous expansion of market share in the molecular block field; scientific research reagent business income of 68.4494 million yuan (+ 65.02% YOY), mainly driven by the growth of life science products. In terms of product development, 23H1's R & D investment increased by 45.02% compared with the same period last year; the company's focus on boric acid and borate esters, fluorine-containing blocks, 23H1 product line continues to expand and continue to grow, has begun to have a scale advantage. In terms of sales expansion, the company has supplied more than 10,000 customers in the past 12 months, an increase of about 18% compared with 2022; the company has set up positions in three overseas regional centers in the United States, Germany and India, and 23H1's overseas sales revenue has achieved a high growth of + 45.21% compared with the same period last year.

Profit forecast, valuation and rating: Bider Pharmaceuticals is a leading enterprise of molecular blocks under kilograms, with the comprehensive advantages of "more, fast, good and provincial", leading its domestic counterparts in overseas expansion, while strategically cutting into the field of biological reagents to open the long-term ceiling. We maintain the company's 23-25 homing net profit of RMB 2.01 million, an increase of 37%, 34% and 34% respectively over the same period last year. According to the latest equity estimates, the EPS is 2.21 pm 2.95 / 3.96 yuan respectively, and the current price corresponding to PE is 33-25-18 times, maintaining the "overweight" rating.

Risk hints: the risk of lower-than-expected demand for new drug research and development downstream; the risk of less-than-expected import substitution; the risk of intensified competition in the industry; and the risk of less than expected overseas expansion.