[Investment points

Incident: On April 26, 2024, the company released its report for the first quarter of 2024, with 2024Q1 revenue of 687 million yuan (+0.04%, same in parentheses), net profit of 138 million yuan (+0.06%) to mother, net profit of 133 million yuan (+6.64%) after deducting non-return to mother net profit of 133 million yuan (+6.64%).

Performance at a high base exceeded expectations, and the non-storage business continued to improve: the company's Q1 performance slightly exceeded expectations. 23Q1 grew positively year-on-year due to the high centralized delivery base for post-pandemic projects, with a significant increase of 51% over the previous year under a high base. By sector, life science business revenue was 350 million yuan, up 79% month-on-month, while medical innovation business revenue was 334 million yuan, up 31% month-on-month. Domestic market revenue was 499 million yuan, up 11% year on year, up 80% month on month; overseas market revenue of 186 million yuan fell year on year due to base figures, but increased 6% month on month. Q1 The layout of the non-storage business continued to improve, accounting for 39% of revenue, an increase of 22% over the previous year. New products such as light/mold incubators and floor-standing high-speed refrigerated centrifuges continued to be launched. Furthermore, the company's expenses were well controlled, and the net interest rate returned to mother to 20%.

We believe that the company's Q2 inflection point is approaching: ① The impact of inventory removal in the company's traditional storage business industry is nearing its end, and IoT business bidding has gradually declined; ② the overseas situation is complicated in 2023. The company's overseas project business fell sharply in 23 years due to funding from international organizations and the delivery cycle. Currently, judging from customer interaction, Q2 is expected to usher in an inflection point; ③ The non-storage business is the company's key layout direction. The categories continue to be rich, maintain rapid growth, and have gradually gone overseas; ④ The company's expenses are well controlled, and Q1 has gradually gone overseas; The company's expenses are well controlled, and Q1 has gradually gone overseas; The company's expenses are well controlled, and Q1 returns to the mother's net interest rate 20%. We believe that the profit margin is expected to maintain the Q1 level for the whole year, and the net profit growth rate for the whole year will be faster than on the revenue side.

Profit forecast and investment rating: Considering that the company's Q1 performance exceeded expectations and Q2 is expected to reach a further inflection point, we adjusted the company's 2024-2026 revenue forecast from 27.04/32.54 billion yuan to 28.63/34.36/4.054 billion yuan, and net profit to mother from 5.02/6.25/759 million yuan to 573/704/851 million yuan. The PE corresponding to the current stock price is 20/17/14 ×, maintaining the “buy” rating.

Risk warning: demand recovery falls short of expectations, development of new products falls short of expectations, exchange gains and losses, risk of impairment of goodwill, etc.