Summary#

Recently, Eddard Biology released its three-quarter report for 2023. In the first three quarters of 2023, the company realized operating income of 708 million yuan, an increase of 18.08% over the same period last year; net profit of 174 million yuan, down 22.50%; net profit of 154 million yuan, an increase of 27.09% over the same period last year; and net operating cash flow of 215 million yuan, an increase of 124.87%. In 2023, Q3 achieved an operating income of 249 million yuan in the single quarter, an increase of 20.38 percent over the same period last year, a net profit of 47 million yuan, a decrease of 65.17 percent, and a non-return net profit of 45 million yuan, an increase of 0.30 percent over the same period last year.

Profit Forecast and rating: the company focuses on cancer precision medical molecular diagnosis market segment, and has the first batch of tumor concomitant diagnosis product lines that have obtained NMPA and EU CE certification. Nucleic acid molecular detection technology and algorithm with independent intellectual property rights (ADx-ARMS, Super-ARMS, dd-Capture, ADx-HANDLE, ADx-GSS) is currently one of the leading technologies in the field of cancer precision medicine. With the huge demand for concomitant diagnosis arising from the clinical promotion of tumor-targeted drugs in China, the smooth promotion of overseas clinical cooperation with multinational pharmaceutical companies has led to the expansion of overseas markets; in addition, based on its own technological advantages, the company has brought new growth points to tumor early detection, recurrence / efficacy monitoring and other extension areas, and the company has a long-term growth prospect. We adjusted the company's profit forecast and estimated that the EPS from 2023 to 2025 will be 0.59,0.72,0.94 yuan; corresponding to the closing price on October 26, the PE will be 33.5,27.3,20.9 times respectively, maintaining the "overweight" rating.

Risk tips: new product volume is lower than expected, product research and development, clinical and registration risks, industry policy changes exceed expectations, market competition pattern change risk, exchange rate change risk and so on.