Novo Zhiyuan has released its 2023 annual report. In 2023, the company achieved operating income of 2.02 billion yuan (up 3.97% year on year); realized net profit of 178 million yuan (up 0.47% year on year); realized net profit of 140 million yuan after deduction (year-on-year decrease of 8.92%).
Novo Zhiyuan announced its 2024 quarterly report. 2024Q1 achieved operating income of 468 million yuan (up 6.32% year on year); realized net profit of 27.32 million yuan (up 21.40% year on year); realized net profit after deduction of 21.28 million yuan (up 6.85% year on year).
Opinion: The macroeconomic environment affects domestic market performance, and Hong Kong, Macao, Taiwan and overseas markets are growing steadily. Laboratories in Germany and Japan have been launched one after another, the platform switch has begun to bear fruit, and global localized customer service capabilities continue to improve.
The operation of 2024Q1 is steady, moderate and positive, and the domestic scientific research sequencing service leader is steady and far-reaching.
In 2023, multiple factors affected the profit side growth rate less than that of the revenue side. 1) The gross profit margin in 2023 was 42.73% (down 1.55pct year on year), mainly due to changes in product structure; 2) the cost rate during 2023 (34.01%) increased by 1.32 pct year on year, mainly due to a 1.71 pct increase in sales rates; 3) Non-recurring profit and loss of 38.07 million yuan (up 61.83% year on year), resulting in a negative growth rate falling short of the parent end.
2024Q1's operations are steady, moderate and positive. 1) Revenue increased 6.32% year on year and remained relatively stable. The growth rate of net profit to mother exceeded the revenue growth rate, mainly due to a 1.59 pct year-on-year decrease in the cost ratio during the period. 2) The growth rate of net profit after deduction was less than the growth rate of net profit attributable to mother, mainly due to a year-on-year increase of 133.53% in non-recurring profit and loss.
Sequencing platform services are leading the growth, platform switching is beginning to show results, and global sequencing service capabilities continue to improve.
In 2023, the company achieved sequencing platform service revenue of 953 million yuan (up 14.05% year on year), gross profit margin of 36.76% (+0.06pct); basic life science research service revenue of 636 million yuan (down 0.94% year on year), gross profit margin of 55.48% (+0.75pct); medical research and technical service revenue of 269 million yuan (up 6.60% year on year), gross profit margin of 44.88% (+0.76pct). With the launch of platforms such as Novaseq XPlus and Pacbio Revio, the company's sequencing throughput continued to increase. In 2023, the company's sequencing data production and sales increased by 43.89% and 41.38%, respectively.
The global localization strategy is deeply laid out, and overseas business is growing steadily. In 2023, mainland revenue was RMB 1,012 million (down 9.43% year on year), and revenue from Hong Kong, Macao, Taiwan and overseas was RMB 985 million (up 22.06% year over year).
The company's business covers more than 90 countries and regions. With the successive opening of laboratories in Germany and Japan, the global regional service capacity continues to be strengthened. The company serves nearly 7,300 customers, has achieved full coverage of the top 100 global academic research institutions and the top 10 global pharmaceutical companies in revenue, and its competitive advantage in the global market continues to be consolidated.
Profit forecasting and investment advice. Considering the impact of the global macro environment, we expect the company's revenue to be 23.15 billion yuan, 26.94 billion yuan, and 3.154 billion yuan respectively, up 15.6%, 16.4%, and 17.1% year on year; net profit to mother will be 2.09, 2.47, and 298 million yuan, respectively, up 17.5%, 18.0%, and 20.8% year on year; corresponding PE will be 26X, 22X, and 19X respectively, maintaining a “buy” rating.
Risk warning: The recovery of domestic scientific research activities fell short of expectations; the increase in overseas outsourcing rates fell short of expectations.