Introduction to this report:
Equity incentive fees are dragging down the apparent profit growth rate. Performance is in line with expectations. Domestic market compliance advantages are prominent, the international market is expanding rapidly, and the pharmaceutical company's circle of friends continues to grow rapidly, and it is expected that it will continue to grow rapidly. Maintain an increase in holdings rating.
Key points of investment:
Maintain an increase in holdings rating. Maintain the 2024-2026 EPS forecast of 0.73/0.95/1.24 yuan, maintain the target price of 24.82 yuan, corresponding to 2024 PE 34X, and maintain the holdings increase rating.
The performance was in line with expectations. In Q1 2024, the company achieved revenue of 233 million yuan (+19.53%), net profit of 0.64 million yuan (+12.01%), net profit of 57 million yuan (+26.44%) after deducting the impact of equity incentive expenses (8.42 million yuan), net profit to mother of 73 million yuan (+26.70%) and net profit of 65 million yuan (+45.13%), which is in line with expectations.
Domestic market compliance advantages are prominent, and market share is expected to increase. The company continues to promote the admission of compliant products to hospitals, further increasing its market share in hospitals. As the restructuring of the oncology genetic testing industry deepens further, leading compliance companies are expected to continue to benefit. Relying on medical testing laboratories, LDT products are developed using Class III IVD product registration standards, responding to the needs of pilot hospitals to establish LDT product development, preparation, use, and quality control systems, and promoting the transformation of LDT products into IVD products after maturity. New products such as the PCR-11 gene, IDH, and HER2/er/PR are under NMPA approval, and HRD products are applying for innovative medical devices; in addition, the approval process for various tumor-associated diagnostic products is progressing rapidly.
Accelerate the development of international markets and effectively expand cooperation among pharmaceutical companies. The international market set up localization teams in key overseas markets such as Singapore, Japan, Europe, Latin America, and the Belt and Road, to consolidate the marketing system in the East Asian and European markets, and gradually expand into Southeast Asia, the Middle East, Africa, Latin America, etc.; reached global cooperation with AstraZeneca to promote the development and commercialization of a number of accompanying diagnoses in many countries or regions around the world. The company empowers original drug clinical research with diagnosis. The pharmaceutical company's circle of friends continues to expand, and areas of cooperation and regions continue to expand, laying a good foundation for expanding new business fields.
Risk warning: New product launches and promotions fall short of expectations; risk of price reduction in product collection