Incident Overview

The company released the 2023 three-quarter report: The first three quarters of 23 years achieved operating income of 1,183 billion yuan, a year-on-year decrease of 4.60%, net profit of 115 million yuan, a year-on-year decrease of 58.68%, and net profit of 100 million yuan, a year-on-year decrease of 100 million yuan in non-net profit, a year-on-year decrease of 62.02%.

Analytical judgment:

Performance was significantly affected by the cooling of domestic investment and financing, and domestic and international market expansion continued to be strengthened

The company achieved revenue of 311 million yuan in a single quarter in 23Q3, a year-on-year decrease of 37.50%. We judge that it was mainly affected by the slowdown in execution of related projects due to the cooling domestic investment and financing environment. In addition, the company's gross margin and net profit margin for the 23Q3 quarter were under some pressure, mainly affected by factors such as the company's mismatch between operating costs and revenue caused by factors such as the commissioning of new laboratories at home and abroad. The company's sales expenses for the first three quarters of 23 years were 58 million yuan, an increase of 44.02% over the previous year, accounting for 4.93% of revenue. Continuously strengthening domestic and foreign market expansion, laying the foundation for future medium- to long-term performance growth. Looking forward to the future, we judge that the short term will continue to be affected by the cooling of the domestic and foreign investment and financing environment. In the medium to long term, the company will continue to strengthen technical capacity building and business expansion in domestic and foreign markets, and it is expected that performance elasticity will gradually return.

Performance forecasts and investment recommendations

Taking into account changes in the domestic investment and financing environment, adjust the previous profit forecast, that is, 2023-2025 revenue was adjusted from 19.57/23.19/2,753 billion yuan to 15.78/17.18/1,914 billion yuan, and EPS was adjusted from 2.85/3.53/4.20 yuan to 1.12/1.43/1.60 yuan, corresponding to the closing price of 71.02 yuan/share on November 3, 2023. PE was 63/50/45 times, respectively, maintaining the “buy” rating.

Risk warning

The company's order demand falls short of expectations, the launch of fund-raising projects falls short of expectations, the risk of loss of core technical backbone and management, and the risk of increased competition.