Revenue grew steadily in the context of a high base, and business transformation cycle management/R&D expenses increased. Changchun Hi-Tech achieved 1H24 revenue of 6.639 billion yuan (+7.6% yoy), and net profit of 1.72 billion yuan (-20.4% yoy) to mother. Revenue grew steadily and profits declined, mainly due to: 1) Under the high 2Q base, Jinsai's long-term sales growth slowed, and the revenue volume of acupress/water needles remained stable; 2) the company's business transformation cycle R&D+management cost ratio increased (1H24 21.7% vs. 1H23 17.2%); 3) sales of 100g acne blemishes slowed down. Looking ahead to 24 years, we expect the company's net profit to decline slightly year-on-year, considering the steady increase in long-term revenue from growth hormone+the rise in demand during the 100g 2H influenza season. However, investment in management and R&D continued to increase. We expect the company's 24-26 EPS to be 10.20/11.32/12.41 yuan, and give the company 14 times PE in 24 years (22 times discounted compared to the company's consensus expectation of Wind in 24 due to the potential collection risk of growth hormone), with a target price of 142.80 yuan to maintain the “purchase”.

Jinsai: Revenue volume stabilized in the context of a high base, and new non-growth hormone products are poised to be launched. Jinsai 1H24 achieved revenue/net profit of 5.152/1.76 billion yuan (+0.25/ -19.5% yoy). Revenue volume stabilized under the high base level in 23 years, mainly due to the release of long-term products, while the profit level declined mainly due to the adjustment of Jinsai's new BU management structure and increased investment in R&D. We expect a year-on-year increase in the number of low units of Kinsai's revenue in 24:1) winning the bid for powder needles+complete specifications and expansion of indications for water needles. We expect the revenue volume of the two products to remain stable; 2) improvements in long-term beneficial injection methods+PEG self-production. We expect double-digit year-on-year growth in sales revenue in 24 years. Furthermore, we estimate that the 1H24 revenue contribution of the company's non-growth hormone products will rise steadily, and we are optimistic that it will continue to increase during the year: 1) children's nutrition products, etc. are expected to impact 0.3 billion yuan in revenue throughout the year; 2) revenue growth may be further increased after the launch of new follicle-promoting water injections and cuticle anesthetics within the year.

100 grams: The commercialization of shingles continues to advance. I am optimistic that the 2H influenza vaccine demand side will return to Baike 1H24 to achieve revenue of 0.618 billion yuan (+10.5% yoy), and net profit to mother of 0.057 billion yuan (up 23% year over year). The revenue side decelerated mainly due to environmental factors in the industry affecting the pace of pimples release, and the higher profit growth rate is mainly due to the increase in the share of high-margin varieties. Looking ahead to 24 years, we are optimistic that 100g revenue will increase. Consider: 1) stable demand for batch issuance of acne; 2) continued strength in pimples sales; 3) 2H nasal spray influenza vaccine batch issuance or increase in contributions. In addition, new products in the pipeline include: 1) the marketing application for the nasal spray influenza vaccine has been accepted; 2) phase I of the vaccine has been completed (preparations for phase III are in progress); and 3) the adjuvant influenza vaccine, recombinant shingles vaccine, HSV-2 vaccine, and Hib vaccine have all submitted pre-IND applications.

In Huakang's steady growth, real estate is optimistic about contributing to stable cash flow

Huakang 1H24 achieved revenue of 0.391 billion yuan (+10.4% yoy) and net profit of about 11.52 million yuan (+26% yoy) to mother. We expect the steady growth of major varieties such as thrombocardiacin tablets in 24 years+the company will continue to explore the value of potential varieties such as Lung Ning granules, and revenue estimates double digit year-on-year growth. Real estate achieved revenue/net profit of 0.456/0.033 billion yuan (+372/ 533% yoy) in 1H24, mainly due to the delivery of content parks and junyuan during the period, and is optimistic about steady, diversified development in the future, and contributed to stable cash flow.

Risk warning: collection risk, vaccine sales falling short of expectations, new product development failure, and commercialization risk.