occurrences

The company released its 2024 semi-annual report. In the first half of 2024, it achieved revenue of 2.211 billion yuan, a year-on-year increase of 19%; realized net profit to mother of 0.903 billion yuan, an increase of 20% over the previous year; and realized net profit after deducting non-return to mother of 0.868 billion yuan, an increase of 26% over the previous year.

Overseas markets performed well, and the share of medium to large machines gradually increased

2024H1's revenue was 2.211 billion yuan (yoy +19%), of which Q1 revenue was 1.021 billion yuan (yoy +17%) and Q2 revenue was 1.19 billion yuan (yoy +20%), all of which improved year over year. By region, domestic revenue was 1.41 billion yuan (yoy +16%), with the reagent business growing at a year-on-year rate of 18.54%, which is faster than the overall domestic business growth rate.

The installed capacity of light-emitting instruments reached 796, of which 598 were large machines, accounting for a continuous increase of 75.13%. Overseas revenue was 0.796 billion yuan (yoy +23%), with a reagent growth rate of 29%, which is faster than the overall overseas business growth rate.

The installed capacity of light-emitting instruments reached 2,281, of which 1,478 were medium and large machines, accounting for a continuous increase of 64.80% (+10.07pp). The continued increase in the proportion of medium and large instruments installed is expected to drive subsequent reagent increases.

Profitability continues to improve

2024H1 has a gross profit margin of 72.61% (+1.31pp) and a net profit margin of 40.85% (+0.64pp). Mainly, the proportion of high-margin reagents has gradually increased, leading to an improvement in overall gross margin. The results of cost control are beginning to be seen, and cost reduction and efficiency have continued to increase. 2024H1 sales expense ratio is 15.11% (-2.38pp), management expense ratio is 2.60% (-0.39pp), and R&D expense ratio is 9.24% (+0.02pp). At present, the company has 181 chemiluminescence detection reagent projects in China. Among them, the 1000 tests/hour ultra-high throughput fully automatic chemiluminescence immunoanalyzer X10 is in the registration stage, which is expected to better meet the testing needs of large-scale laboratories in the future.

Profit Forecasts, Valuations, and Ratings

We expect the company's revenue for 2024-2026 to be 4.924/6.162/7.709 billion yuan, +25.29%/+25.09%, respectively; net profit to mother is 2.085/2.611/3.267 billion yuan, respectively, with year-on-year growth rates of 26.09%/25.20%/25.13%, respectively. EPS was 2.65/3.32/4.16 yuan/share, respectively. Based on the company being one of the leading domestic chemiluminescence enterprises, the domestic market is expected to continue to grow steadily, perform well overseas, and maintain a “buy” rating.

Risk warning: geopolitical risks, stricter regulation of medical compliance policies, and falling short of expectations in clinical promotion of new products