The revenue trend of autonomous conventional products increased in 23 years, maintaining a “buy” rating

The company achieved revenue/net profit of 28.96/313 million yuan (yoy -19.8%/-55.9%) in 23, mainly due to a marked decrease in sales of emergency testing products in 23 and an increase in related inventory impairment preparations. The company's revenue for independent conventional products in 23 years was YOY +8.3%, and the sales trend of core products increased. 1Q24 achieved revenue/net profit of 6.16/120 million yuan (yoy -8.9%/+3.1%). We estimate that 1Q24 revenue from the company's independent conventional products increased slightly year-on-year. Considering the impact of reagent collection on the gross profit margin of the business, commercialization of new products, and increased R&D investment, we adjusted the 24-26 EPS to 0.71/0.88/1.08 yuan (value 1.14/1.38 yuan 24/25 years ago). Based on 24-year performance (we forecast the net profit share of the self-production/agency sector to account for 89%/11%, respectively), using the SOTP method, the revenue volume of the autonomous light emitting business was slightly lower than the main competitor, and the self-producer/agent was given a 24-year 22x/19x PE (comparable company Wind consistent expected average of 23x/19x), corresponding to a target price of 15.46 yuan (previous value 18.51 yuan) to maintain “purchase”.

Improved performance of independent conventional products led to an increase in gross margin. Continued product promotion and new product development companies had a gross margin of 57.4% (yoy+2.1pct) in 1Q24. We speculate that the main reason is that the gross margin of the company's independent conventional products is high and the share of revenue has rebounded. The company's 1Q24 sales/management/R&D expense rates were 19.6%/5.3%/9.7% (yoy+0.7/+0.3/+1.0pct), respectively. The company continues to increase sales promotion and R&D investment to consolidate the foundation for long-term development.

Chemiluminescence: Revenue growth is steady. I am optimistic that the industry share will further increase the company's chemiluminescence reagent revenue of 952 million yuan (yoy +18.7%) in 23 years, and maintain a steady development trend.

The company shipped 189 new units/1,458 units of free assembly lines/chemiluminescence instruments for the 23rd generation, and the installed capacity of the instruments increased steadily. Looking ahead to the full year, considering the continuous increase in the company's chemiluminescence instrument installed volume, which will further drive reagent sales volume (we are optimistic that the company will ship more than 150 units/about 1,500 new free assembly lines/chemiluminescence instruments), we are optimistic that the company's chemiluminescence reagent revenue will increase 25-30% year-on-year in 24, and is expected to achieve a further increase in the market share of the industry.

Other business: The temporary inspection business led the company's revenue growth in various business lines, and the agency business continued to weaken 1) Biochemical: Revenue of 577 million yuan (yoy +2.5%) in 23 years, mainly due to adjustments in the company's product prices after successive implementation of biochemical inter-provincial alliance collection. Considering the high-end positioning of the company's biochemical business and the continuous increase in brand influence, we expect a slight year-on-year increase in revenue in the 24-year sector; 2) Provisional Inspection: 23-year revenue of 176 million yuan (yoy +27.4%). Considering the smooth marketing of the company's blood cell products (the company added 162 new blood lines/1,369 units shipped in '23), I am optimistic that clinical inspection revenue in '24 will increase by 40-50% year-on-year; 3) Agents: Revenue of 981 million yuan (yoy -21.9%) in '23, along with the strategic weakening of the business, the sector's performance contribution gradually declined.

Risk warning: Product sales fall short of expectations, R&D progress falls short of expectations, reagent tenders reduce prices.