Revenue grew steadily, and profit was under pressure in the short term due to falling gross margin

In 2023, the company achieved operating income of 1,092 million yuan, a year-on-year increase of 30.94%; realized net profit of 110 million yuan, a year-on-year decrease of 24.94%; realized net profit without deduction of 123 million yuan, a year-on-year decrease of 10.57%. Looking at a single quarter, the company achieved revenue of 287 million yuan, a year-on-year increase of 16.94%; achieved a net loss of 3.826,900 yuan, a year-on-year decrease of 107.98%; and realized net profit deducted from non-mother of 1,5019 million yuan, a year-on-year decrease of 96.35%. The company achieved operating income of 263 million yuan in Q1 of 2024, up 4.05% year on year and down 8.43% month on month; net profit to mother was 0.26 million yuan, down 29.39% year on year; net profit after deducting non-return to mother was 0.25 million yuan, down 34.74% year on year. 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. However, in the face of increasing market competition, the company's comprehensive gross margin continued to decline, with a comprehensive gross profit margin of 40.0% (-4.38pp) in 2023. Considering the intensification of competition in the global market and the rapid growth of the company's expense ratio, we lowered the company's profit forecast for 2024-2025 and increased the profit forecast for 2026. The estimated net profit is 1.35/1.81/210 million yuan (originally estimated at 1.99/256 million yuan), EPS is 1.49/2.00/2.31 yuan, and the PE corresponding to the current stock price is 21.8/16.2/14.0 times. Considering that the company is a leading enterprise in the molecular block segment, the growth rate is high and the “buy” rating is maintained.

Accelerate the global layout and continue to grow at a high level of overseas business

In 2023, the company further expanded warehouses in the European and Indian markets, renovated and expanded regional centers located in Germany and India, improved the efficiency of serving local customers, and consolidated its core advantage of “multiple, fast, good, and economical”. In the future, it will also plan to intelligently arrange US warehouses to further enhance the company's ability to participate in global competition. In 2023, the company's overseas revenue was 557 million yuan, up 37.36% year on year, accounting for 51%. The overseas business is in a period of rapid development.

Molecular block SKU serves a steady growth in the number of customers

In 2023, the company continued to expand new product lines, with R&D investment reaching 63 million yuan, an increase of 37.23%; by the end of 2023, the number of products in stock was 112,000, an increase of 17,000 over the previous year. Among them, there are 102,400 types of drug molecular blocks and 0.96 thousand types of scientific reagents. In addition, the company supplied 11,600 customers throughout the year, a year-on-year increase of 36.27%, and continued to provide customers with high-quality and efficient services.

Risk warning: domestic policy changes, declining demand in drug discovery market, worsening industry competition pattern, etc.