Event: according to the company's semi-annual report of 2023, the company realized 523 million yuan (+ 41.8%) in income, 84 million yuan (+ 41.6%) in net profit and 92 million yuan (+ 56.5%) in non-return net profit in the first half of 2023. In a single quarter, the company's Q2 realized revenue of 270 million yuan (+ 41.0%) and net profit of 47 million yuan (+ 38.9%) in 2023.

Comments:

Q2's performance hit a new high and overseas business grew strongly. In a single quarter, the company's 2023 Q2 achieved revenue of 270 million yuan, an increase of 41.0% and 7.1% respectively over the same period last month, setting another record high. According to the products, the income of 2023H1 molecular blocks was 454 million yuan, an increase of 38.8% over the same period last year, and that of scientific research reagents was 68 million yuan, an increase of 65.0% over the same period last year. From a regional perspective: the revenue of 2023H1's domestic business reached 257 million yuan, an increase of 38.4% over the same period last year; the revenue of overseas business reached 266 million yuan, an increase of 45.2% over the same period last year, and the proportion of overseas sales revenue increased to 50.8% (+ 1.2pct). As the company's overseas layout deepens, the company's performance is expected to continue to grow rapidly.

The efficiency of operation and management has been continuously optimized, and the deduction of non-net interest rate has risen steadily. The company's 2023H1 net profit margin and deduction non-net profit margin are 16.0% and 17.6% respectively, year-on-year-0.1pct/+1.6pct, respectively. The 2023H1 sales / management / R & D expense rate is 10.7%, 8.4%, 5.1%, respectively, compared with the same period last year-0.6pct/-1.1pct/+0.1pct, the company's sales management expense rate continues to reduce, the purchasing end company for repeated procurement of raw materials overall price reduction rate of more than 40%, while constantly optimizing inventory operation efficiency, showing the company's efficient operation and management level.

The expansion of new categories and new areas will contribute to future growth. At the beginning of the year, the company officially entered the field of life science and biopharmaceutical with serum as a breakthrough. At present, it has formed a stable cooperative relationship with well-known universities and scientific research institutes such as Tsinghua University and Peking University in the field of cell culture. At the same time, the company has successfully entered the field of new energy, cooperated with domestic well-known new energy companies such as BYD and Ningde era, and established business relations with leading enterprises such as Huawei in the field of new materials to create a new growth engine for the company's future development.

Profit forecast and investment advice: according to the company's operating situation, we slightly adjust our previous profit forecast. We expect the company's operating income from 2023 to 2025 to be 1.143 billion yuan / 1.502 billion yuan / 1.952 billion yuan, respectively. The year-on-year growth rate was 31.4%, 31.4%, 30.0%, and the net profit was 200 million yuan / 262 million yuan / 342 million yuan, respectively. The year-on-year growth rate was 36.7%, 31.3% and 30.4% respectively. The latest closing price corresponding to PE is 32-24-19 times. Domestic and foreign small molecule R & D demand continues to be strong, in recent years, the company's product quality and SKU quantity continue to improve, product prices and spot quantity have advantages, the company's self-developed products steadily, at the same time in new categories and new areas continue to expand, the company's performance is expected to continue the rapid growth trend, maintain the "buy" rating.

Risk tips: increased competition in the industry; sales are not as expected; new product research and development is not as expected; overseas business expansion is not as expected.