Revenue is growing steadily, and profit side is under phased pressure

In the first three quarters of 2023, the company achieved operating income of 805 million yuan, an increase of 36.78% over the previous year; realized net profit of 113 million yuan, an increase of 15.69% over the previous year; and realized net profit after deducting 121 million yuan, an increase of 26.30% over the previous year. Looking at Q3 alone, the company achieved operating income of 282 million yuan, a year-on-year increase of 28.44%, a year-on-month increase of 4.52%; net profit of 30 million yuan, a year-on-year decrease of 23.83%, a year-on-year decrease of 36.88%; net profit after deducting non-return net profit of 29 million yuan, a year-on-year decline of 21.48%, a year-on-month decline of 44.91%. The company actively promotes global business layout, enhances the brand influence of its own brands “BIDE”, “BLD” and “AmBeed” at home and abroad, and is growing steadily on the revenue side. Considering the rapid increase in the company's expense ratio, we lowered the company's profit forecast for 2023-2025. The estimated net profit is 1.56/1.99/256 million yuan, the EPS is 1.72/2.19/2.81 yuan, and the current stock price corresponding to PE is 37.1/29.1/22.7 times, maintaining the “buy” rating.

Actively build a new molecular block product line to serve a steady increase in the number of customers

The company adheres to the business philosophy of “how fast and how to save” and is committed to building the most complete and novel molecular block product library in China; by the end of June 2023, the number of products in stock had reached 103,000. At the same time, the company continues to expand new product lines. 2023H1 has invested 27 million yuan (+45.02%) in R&D and 146 R&D personnel (+18.70%); the product lines of boric acid, borate, and fluorine blocks have continued to expand and grow, showing initial scale advantages. In addition, the company has supplied more than 10,000 customers in the past 12 months, an increase of about 18% over 2022, and continues to provide customers with high-quality and efficient services.

Actively deploying the world's top 8 regional centers, overseas business ushered in a period of rapid development

The company has set up three overseas regional centers in the US, Germany, and India, and has set up sub-warehouses in five domestic locations, including Shanghai, Shenzhen, Tianjin, Chengdu, and Wuhan. Through global regional linkage, operational efficiency has been greatly improved, and the customer's new drug development cycle has been greatly shortened. The global supply chain system has begun to take shape. The overseas revenue of 2023H1 reached 266 million yuan, an increase of 45.21% over the previous year. The overseas business is in a period of rapid development.

Risk warning: domestic policy changes, declining demand in the drug discovery market, loss of core members, worsening industry competition pattern, etc.