Performance in the first three quarters of 2023: the revenue in the first three quarters of 2023 was CNY 451 million (-4.05%), excluding the impact of nucleic acid detection magnetic bead revenue in the same period last year, with a year-on-year growth of 8.55% in the first three quarters; the net profit of parent in the first three quarters was CNY 39 million (-81.61%), and the deduction of non-parent was CNY 21 million (-85.47%). Excluding the amortization of equity payment expenses and the influence of investment income from acquisition of Saipu in the same period last year, the net profit attributable to the mother in the first three quarters was 134 million yuan (-28.55%), and the deduction of non-attributable net profit was 116 million yuan (-32.66%). The sales/management/R & D expense ratio in the first three quarters was 19.85%/22.74%/28.57%, respectively, an increase of 6.4/10.43/12.93pct year-on-year. Gross profit margin/net profit margin for the first three quarters was 79%/6.22%, respectively. Excluding the impact of equity payment and investment income from acquisition of Spectrum in the same period last year, the adjusted net profit margin for the first three quarters was 29.68%(-10.18pct).

2023 Single Q3 performance: Single Q3 company realized revenue of 156 million yuan (-11.54%), net profit attributable to mother 0.07 million yuan (-84.74%). Excluding the impact of share payment expenses, the net profit attributable to single Q3 was RMB 40 million yuan (-34.8%). The decline of profit end was mainly due to factors such as the decline of instrument business, increased investment in R & D and provision for inventory depreciation reserve; RMB 35 million yuan (-39.39%) was deducted from non-parent net profit excluding the impact of equity payment expenses. Single Q3 sales/management/R & D expense ratio was 20.59%/22.75%/29.2% respectively, an increase of 6.56/10.84/9.71pct year-on-year, and single Q3 R & D investment was 46 million yuan (+32.52%). Single Q3 gross margin/net margin is 78.89%/1.92% respectively.

In the first three quarters of 2023, the Company realized operating income of RMB 321 million yuan (+9.12%) for chromatographic fillers and chromatographic media, and the amortization expenses paid by shares in the first three quarters totaled RMB 97.19 million yuan, an increase of RMB 68.4195 million compared with the same period. By the end of September 2023, the goodwill generated from the acquisition of Spectrum Instruments was RMB 142 million, accounting for 6.87% of the total assets of the Company.

A number of key new products, such as silica gel chromatographic packing with breakthrough microporous control technology and new soft gel Protein A affinity chromatography medium, were launched in the second half of the year.

Profit forecast and rating: It is estimated that the company will realize revenue of RMB 6.65/7.46/8.57 million yuan in 23-25 years, with a year-on-year growth rate of-5.8%/12.2%/14.9%; net profit attributable to parent company of RMB 0.49/1.07/1.77 million yuan, with a year-on-year growth rate of-82.1%/116.8%/65.8%. Give it an "overweight" rating.

Risk tips: product sales are not as expected, market competition intensifies, macro policy environment changes, etc.