Recommended logic: 1) As a leading domestic recombinant protein enterprise, the product quality of the company is excellent, and the overseas market size is larger than that of the domestic market. It is expected that the company's overseas business growth rate will maintain rapid and steady growth, and the overseas revenue growth rate CAGR for the next three years will be 30% +. 2) The competitive pattern of the industry is scattered, and the localization rate is expected to increase. Currently, the recombinant protein industry still accounts for a large share of foreign investment. The company's market share is about 4%. Supported by factors such as product quality, cost performance advantages, and service quality, the share of domestic manufacturers is expected to increase. 3) The three-wheel drive of innovation+quality+brand helps the company increase its performance. Currently, it serves more than 8000 customers, covering 70 countries and regions around the world.

The overseas recombinant protein market is vast, and the company expects overseas business to maintain high growth due to its excellent product quality and supply chain advantages. Driven rapidly by downstream demand for biopharmaceuticals, the recombinant protein research reagent market is growing significantly faster than the overall bioresearch reagent market. According to Frost & Sullivan data, the global recombinant protein research reagent market grew from 3.3 billion yuan in 2015 to 5.2 billion yuan in 2019, the CAGR in 16-19 was 12%, the CAGR is estimated to be about 14% in 19-24, and about 9.8 billion yuan by 2024. The overseas market size is larger than that of the domestic market. Through years of accumulation, the quality of some of the company's products has matched or even surpassed that of overseas giants. At the same time, the company is actively building new laboratories in overseas markets to expand the global R&D center, and establishing logistics and warehousing systems in the US and Switzerland to create a global supply chain system. Brand power has gradually been formed. Therefore, it is estimated that the company's overseas business revenue CAGR for the next three years will be about 30% +.

The competitive landscape of the industry is scattered, and the time is right for domestic production to replace it. As a key reagent for the development and production of biopharmaceuticals, vaccines, and cellular immunity, recombinant proteins are growing faster than the overall reagent industry. However, with the exception of the top two foreign-funded companies with high market shares (R&D and PeProTech account for 20% and 16% respectively), the rest of the market is scattered as a whole. Among domestic brands, Yiqiao Technology, BaPS, and Coastal Biotech each rank 3-5. The market share is 5%/4%/2%, respectively. With the construction of various technology platforms for domestic manufacturers and the continuous introduction of new products, the product quality of domestic manufacturers and foreign manufacturers is already relatively close. At the same time, the services that domestic manufacturers can provide are better and more timely, which is expected to increase customer stickiness and gradually expand market share.

The three-wheel drive of innovation+quality+brand helps the company increase its performance. The company continues to increase investment in R&D and gather outstanding talents in the industry. Currently, nearly 50% of R&D personnel have master's and doctorate degrees, leading the industry. The company has six major technology platforms and created scarce recombinant protein products in various industries (there are layouts in various fields such as ADC, CGT, and brain science). The average number of application test data for a single product is 3.09, ranking first in the market. At the same time, the most critical cell lines in the company's raw materials all come from state agencies and are relatively stable. Key evaluation indicators such as product uniformity and activity are ahead of comparable companies in the industry, and the epidemic has taken advantage of the pandemic to expand production capacity, and there are no production capacity restrictions in the short term. In terms of brand power, the company has increased its brand influence through online and offline channels. Currently, the number of downstream customers of the company has exceeded 8000, covering 70 countries and regions around the world, including well-known domestic and foreign biomedical enterprises, scientific service companies, and top scientific research institutions.

Profit forecast and investment advice: We expect the company's 2023-2025 EPS to be 1.37/1.77/2.37 respectively. As a leader in the recombinant protein industry, the company has a human cell expression system, product quality is higher than the industry average, channel brand influence is expected to continue to expand due to the pandemic, and the company's overseas business will maintain a rapid and steady growth rate. It is expected that the subsequent recovery in domestic market demand will bring greater flexibility in performance, so active attention is recommended.

Risk warning: risk of product structure being too uniform; risk of product category expansion and sales falling short of expectations; risk of overseas business expansion falling short of expectations; risk of exchange rate fluctuations.