Event: the company released its 2023 quarterly report, with revenue of 810 million yuan (year-on-year + 36.8%), net profit of 110 million yuan (year-on-year + 15.7%) and non-net profit of 120 million yuan (+ 26.3%) in the first three quarters of 2023. In the third quarter, the income was 280 million yuan (year-on-year + 28.4%), the return net profit was 30 million yuan (year-on-year-23.8%), and the non-net profit was 30 million yuan (year-on-year-21.5%).

Under the pressure of short-term performance, "more fast, good and save" lays the driving force for the company's long-term growth: under the pressure of the macro external environment and market competition in the third quarter of 2023, the company's operating income has still achieved rapid growth. on the one hand, molecular blocks, scientific reagents subdivide the market demand is good, at the same time, the breadth and depth of the company's products continue to improve, the company's performance continues to grow. In addition, the company's core competitiveness "how fast, good and economical" is still very prominent. (1) more: the company is rich in molecular block products, with more than 103000 kinds of products, and the customer base continues to expand; (2) Fast: the company has three overseas regional centers in the United States, Germany and India, and separate warehouses have been set up in Shanghai, Shenzhen, Tianjin, Chengdu, Wuhan and other five places in China, which has significantly improved service efficiency and operation efficiency. (3) good: the company has products with good product quality and high customer recognition, focusing on the layout of boric acid and borate esters, fluorine-containing block product lines, the layout is forward-looking; (4) province: on the one hand, the company reduces costs and increases efficiency through R & D and supplier management. on the other hand, the overall price of raw materials is controllable and low through supplier management.

Gross profit margin and net profit margin are under short-term pressure, and R & D investment continues to increase: in the third quarter of 2023, gross profit margin and net profit margin were 39.3% (year-3.9pct) and 10.3% (year-7.3pct), respectively. In terms of R & D investment, the R & D expenditure in the third quarter of 2023 alone reached 14.37 million yuan (+ 0.9%). In the third quarter of 2023, the sales expense rate, management expense rate and financial expense rate were 11.6% (year-on-year + 0.9pct), 9.7% (year-on-year + 2.5pct) and-0.7% (year-on-year + 3.6pct), respectively.

Profit forecast and investment advice. According to the company's quarterly report data, we expect the company to achieve a net profit of 1.82.5 / 330 million yuan from 2023 to 2025, corresponding to the previous share price PE 33X/25X/18X. The company is the leading enterprise in the domestic molecular block industry, the company has the advantage of "how fast, good and saving", and the company continues to make breakthroughs in overseas markets, we are optimistic about the company's business growth and maintain the "buy" rating.

Risk tips: the company's high inventory balance and inventory management internal control-related risks; overseas sales are not as expected risk; market competition intensified risk; business development is not as expected risk.