Oriental Biology (stock code: 688298) is a company focusing on the in vitro diagnosis industry. Its industry is the in vitro diagnosis industry under the medical device industry. In vitro diagnostic products mainly include diagnostic equipment and diagnostic reagents, among which diagnostic reagents dominate the entire industry. The size of the global in vitro diagnostic market continues to grow, and is expected to grow at a compound annual growth rate of around 6% in the future. As a member of the in vitro diagnostic industry, Dongfang Biotech is expected to benefit from the development trend of the industry.
However, according to Dongfang Biotech's 2023 interim report, the company faced sales business that basically removed COVID-19 testing products during the reporting period, which led to a sharp drop in overall revenue to 502 million yuan. Compared with 7.111 billion yuan in the same period last year, revenue decreased significantly. Corresponding to this, operating costs also dropped sharply from 3,026 million yuan in the same period last year to 324 million yuan. Sales and management expenses have also declined sharply, but subsidiary operating expenses have increased.
In terms of financial expenses, exchange earnings decreased compared to the same period last year. In terms of R&D expenses, R&D investment related to COVID-19 testing products has been drastically reduced. These factors all had an impact on the company's operating activities. Net cash flow from operating activities decreased from 2,333 million yuan in the same period last year to -1,187 billion yuan in the reporting period. Net cash flow from investment activities also decreased from -531 million yuan in the same period last year to -153 million yuan in the reporting period. Net cash flow from fund-raising activities increased from -792 million yuan in the same period last year to 856 million yuan in the reporting period.
In terms of assets and liabilities, the company's total asset balance at the end of the period was 9.711 billion yuan, down from 107 billion yuan at the beginning of the period. The total closing balance of liabilities was $1,654 million, down from $2,381 million at the beginning of the period. The balance ratio fell from 22.24% at the beginning of the period to 17.04% at the end of the period, indicating an improvement in the company's debt situation. The net assets balance at the end of the period was $8.57 billion, down from $8.323 billion at the beginning of the period.
The company's gross margin fell from 57.44% in the same period last year to 35.47% in the current period, and net profit margin also fell from 39.04% in the same period last year to 7.57% in the current period. This may be related to a sharp decline in operating income. Net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss fell from $2,766 million in the same period last year to $839 million in the reporting period. Net profit declined from 2,776 million yuan in the same period last year to 379 million yuan in the reporting period. The return on net assets (ROE) for the reporting period was 0.47%.
The balance of cash and cash equivalents at the end of the period was $5.433 billion for the reporting period, down from $7.13 billion in the same period last year.
Overall, Oriental Biotech showed some challenges in the 2023 mid-term report. The impact of the COVID-19 pandemic has basically eliminated the company's COVID-19 testing product sales business, which has led to a sharp drop in revenue. However, by reducing operating costs, sales expenses and management expenses, and increasing cash flow from fund-raising activities, the company has mitigated the impact of declining operating income to a certain extent. In the future, the company will need to find new growth points to make up for the decline in sales of COVID-19 testing products.
As a financial analyst, I think when considering investing in Oriental Biotech, investors need to pay close attention to changes in the company's operating income and net profit, and how the company is coping with the decline in sales of COVID-19 testing products. At the same time, investors also need to pay attention to the company's balance and liability situation, as well as the company's cash flow situation. Overall, although Oriental Biotech faced some challenges in the 2023 interim report, the company showed a positive attitude through a series of measures. In the future, the company's performance and prospects will need to be further observed.
This article only represents the judgments made by analysts themselves or analysts based on AI analysis. It cannot be used as an investment indicator, nor does it constitute any investment advice. The original purpose of this article was to help investors analyze and judge capital market data in the most intuitive and fastest way and from the most professional perspective.