occurrences

The company released its 2024 semi-annual report. The first half of 2024 achieved revenue of 1.279 billion yuan, a year-on-year decrease of 7.37%; realized net profit of 0.202 billion yuan, an increase of 15.38% over the previous year; and realized net profit of 0.199 billion yuan after deduction, an increase of 11.49% over the previous year.

Assembly line installation gradually drives reagent release

2024H1 achieved revenue of 1.279 billion yuan (yoy -7.37%). The decline in revenue was mainly due to the gradual divestment of the agency business, putting pressure on short-term performance. Among them, revenue from independent product reagents was 0.859 billion yuan (yoy +5.9%), and reagent sales increased 23.4% year on year. The rapid increase in sales was due to the gradual release of reagents driven by assembly line installations, while the decline in revenue led to price changes brought about by adjustments in the collection and dealer system. At the same time, the company's assembly line installed performance was impressive. The number of free assembly lines shipped by 2024H1 students was 109, and the number of blood lines shipped was 110. It is expected that it will continue to drive the amount of reagents in the future.

Profitability continues to improve, and major new products continue to be launched

2024H1's gross margin was 57.00% (+3.62pp). Thanks to the company's excellent cost control capabilities, the gross margin of its own products continued to increase (+1.54pp). Net margin was 15.83% (+3.39pp). The company continues to increase R&D and market development efforts. The three fees and R&D expenses ratio have increased slightly. Among them, the sales expenses ratio is 22.49% (+1.74pp), the R&D expenses ratio is 11.30% (+1.99pp), and the management expenses ratio is 6.02% (+1.00pp).

2024H1's 600-speed chemiluminescence meter i6000 and fully automatic biochemiometer C2000 have been approved for registration, gradually improving the product matrix, and is committed to providing integrated solutions for laboratory departments.

Assembly line installation drives steady growth, and we expect the company's 2024-2026 revenue to be 3.007/3.321/3.767 billion yuan, respectively, +3.85%/+10.43%/+13.44% year-on-year; net profit to mother is 0.37/0.494/0.68 billion yuan, respectively, with year-on-year growth rates of 18.36%/33.49%/37.66%, respectively. EPS was 0.60/0.81/1.11 yuan respectively. Based on the company's outstanding assembly line performance, the performance is expected to reach an inflection point and maintain a “buy” rating.

Risk warning: the implementation of collection policies falls short of expectations, compliance policies are getting stricter, and marketing is falling short of expectations