The company's 2024 Q2 revenue was 0.528 billion yuan (up 7.94% year on year), net profit to mother was 0.051 billion yuan (down 3.66% year on year), after deducting non-return net profit of 0.045 billion yuan (up 16.06% year on year).

The gross profit margin on sales was 42.75% (up 0.61 pp year on year), and the net profit margin on sales was 10.11% (down 0.96pp year on year).

The company's revenue for the first half of 2024 was 0.997 billion yuan (up 7.18% year on year), net profit to mother was 0.078 billion yuan (up 3.86% year on year), and net profit from non-return to mother was 0.066 billion yuan (up 12.92% year on year).

The gross profit margin on sales was 41.71% (up 0.14pp year on year), and the net profit margin was 8.25% (down 0.20pp year on year).

In the first half of 2024, the company's revenue in mainland China was 0.496 billion yuan (up 6.27% year on year), and revenue in Hong Kong, Macao, Taiwan and overseas regions was 0.501 billion yuan (up 8.09% year on year).

The net cash flow from the company's operating activities in the first half of 2024 was 82.3433 million yuan, and the same period of the previous year was 4.5135 million yuan, mainly due to short-term fluctuations in revenue repayment, as well as the impact of a decrease in the company's value-added tax withholding tax rebates and an increase in withheld income tax.

In the first half of 2024, the company continued to expand its global presence. Novo Zhiyuan opened a new laboratory at the Innovation and Start-up Center for Biotechnology (IZB) in Munich, Germany, to continue to strengthen the implementation of a global localization strategy and further enhance service capabilities in the European region. The establishment of the German laboratory has effectively implemented the global localization and regional centralization deployment of Novo Zhiyuan, and is an important part of Novo Zhiyuan's global localization strategy.

At present, Novo Zhiyuan has deployed laboratories around the world, including China, the United States, the United Kingdom, Singapore, Germany, and Japan. With a globally consistent high-standard laboratory management and operation system, it has deployed local staff, and continuously strengthened its global regional service capabilities to provide customers around the world with more efficient and stable products and services.

Profit forecasting and investment advice. We expect the company's EPS to be 0.48, 0.57, and 0.68 yuan respectively in 2024-2026, with net profit growth rates of 12.5%, 19.2%, and 19.1%. Referring to comparable company estimates and considering the company's leading position in the genetic sequencing industry, we give the company 22-28 times PE in 2024, corresponding to a reasonable value range of 10.59-13.48 yuan, and give it a “superior to the market” rating.

Risk warning: Domestic and overseas customer demand has declined, prices from core suppliers have increased, and gross margin has decreased due to increased competition.