The revenue of 1H24's independent conventional products is improving steadily, maintaining that the “buy” rating company 1H24 achieved revenue of 1.279 billion yuan (yoy -7.4%) and net profit of 0.202 billion yuan (yoy +15.4%). Among them, the company's independent product 1H24 earned yoy +7.6%, and the core business developed steadily. The market-side promotion results of the company's own products on large-scale instruments and assembly lines were remarkable. In total, 1H24 shipped 2301 units/strip (yoy +43.7%). We maintain our profit forecast and expect EPS of 0.71/0.88/1.08 yuan for 24-26. Based on 24-year performance (we forecast the net profit ratio of the self-production/agency sector to account for 89%/11%, respectively), the SOTP method was used to consider that the luminescence revenue volume was slightly lower than that of the main competitor, giving self-produced 19x PE (comparable company Wind consistent expected average of 20x) and agent 22x PE (comparable company Wind consistent expected average value 22x), corresponding to a target price of 13.79 yuan (previous value 15.46 yuan), maintaining the “buy” rating.

The gross margin of 1H24 has further increased, and the 1H24 gross margin of the company that continues to strengthen product promotion and R&D investment is 57.0% (yoy+3.6pct). We estimate that the main reason is that the gross margin of the company's own products is high and the revenue share continues to increase (the company's share of revenue from its own products has increased from 37.7% in '19 to 72.9% of 1H24). The company's 1H24 sales/management/R&D expense rates are 22.5%/6.0%/11.3%, respectively, yoy+1.7/+1.0/+2.0pct, respectively. The company continues to strengthen product commercialization and R&D capabilities to help the overall progress be stable and far-reaching.

Chemiluminescence: Revenue is growing steadily. We are optimistic that the increase in instrument ownership will drive the acceleration of reagent sales. We estimate that 1H24's chemiluminescence reagent revenue increased by nearly 15% year-on-year, and the company added 109 new shipments. We estimate that the company's 1H24 chemiluminescence instruments have added more than 650 new installations, and the increase in instrument ownership is impressive. Looking ahead to the full year, considering the increase in the installed capacity of the company's chemiluminescence instruments, the relevant reagent release logic will be smooth (we are optimistic that the company will ship about 200 units/about 1300-1500 new units of free assembly lines/chemiluminescence instruments), we are optimistic that the company's chemiluminescence reagent revenue will grow rapidly over the same period in 24 years, and further enhance the competitiveness of the industry.

Other businesses: Clinical inspection business revenue has grown rapidly, and agency business has further weakened 1) Biochemistry: We estimate that 1H24 revenue declined year on year, mainly due to price system changes due to gradual implementation of collection and adjustment of the company's distribution system; 2) Temporary inspection: We estimate that 1H24 revenue increased nearly 30% year on year, considering that the company's blood cell product promotion continued to improve (the company added 110 new 1H24 blood lines). We are optimistic about the rapid growth of revenue in the 24 sector; 3) Agent: 1H24 agent revenue 0.334 billion yuan (yoy- 32.7%). The company continued to weaken investment in agency business, and its share of performance contribution gradually declined.

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