Event: the company released its 2023 quarterly report, with revenue of 450 million yuan (year-on-year-4.05%), net profit of 38.983 million yuan (year-on-year-81.6%) and non-return net profit of 21.115 million yuan (- 85.47%) in the first three quarters of 2023. Q3 alone realized revenue of 160 million yuan (year-on-year-11.5%), net profit of 7.156 million yuan (year-on-year-84.7%), and non-return-to-mother net profit of 1.773 million yuan (- 95.9%).

Performance is under short-term pressure, and there is still a lot of room for growth in the future: (1) on the revenue side: excluding the impact of magnetic beads for nucleic acid testing, business revenue increased by about 8.6% in the first three quarters of 2023 compared with the same period last year. In the first three quarters of 2023, the company's core business chromatographic packing and chromatographic media products achieved business income of 320 million yuan, an increase of 9.1% over the same period last year. (2) from the profit side: excluding the amortization effect of share payment expenses (the amortization amount of share payment expenses in the first three quarters of 2023 was 97.191 million yuan, an increase of 68.42 million yuan over the same period last year), the net profit of 23Q3 was 40.058 million yuan (- 34.8% compared with the same period last year), and the net profit of non-home payment was 34.675 million yuan (- 39.4% compared with the same period last year). It is mainly affected by the decline of instrument business, the increase of R & D investment and the provision for inventory decline. The comprehensive gross profit margin in the first three quarters of 2023 was 79%, which was basically the same as that in the same period last year.

Continuous investment in R & D and continuous development of new varieties: in the first three quarters of 2023, the company's core business chromatographic packing and chromatographic media products achieved business income of 320 million yuan, an increase of 9.1% over the same period last year. Against the backdrop of the phased adjustment of the biomedical market and the general decline in business income of international peer companies, the market share increased steadily. (1) R & D investment continues to increase: in the first three quarters, R & D investment accounted for 28.6% of business income, and a number of key new products, such as silica gel chromatographic fillers for breakthrough micropore control technology, and new soft gel Protein An affinity chromatography media, were put on the market in the second half of the year. (2) the launch of new products is expected to contribute new increments: the company's UniSil Revo series of monodisperse silica gel chromatographic packing products were launched in October 2023, marking another breakthrough in the company's microsphere manufacturing technology. The company's silica gel products achieved operating income of about 44 million yuan in the first three quarters of 2023, an increase of about 16% over the same period last year; among them, the silica gel products used in the purification of GLP-1 peptide drugs achieved sales revenue of more than 5 million yuan. With the continuous enrichment and improvement of UniSil Revo product line, the company's competitiveness in the field of silicone products will be enhanced in the future. The launch of UniSi Revo series monodisperse silica gel chromatographic packing products will further consolidate the company's leading position in the field of biomedical purification.

Profit forecast and investment advice. Taking into account the company's three-quarter results, we cautiously reduce the company's 2023-2025 net profit to return to the company is 0.66 million 11.8 billion yuan, corresponding to the previous share price PE 205 scarp 152 times 93 times, taking into account the current low national production rate in the field of fillers, the general trend of domestic substitution, the company as a domestic filler leader growth is expected to maintain the "overweight" rating.

Risk tips: the risk of intensified market competition; product sales are less than expected; the risk of policy exceeding expectations.