New Industry Co., Ltd. announced that 2024H1 achieved operating income of 2.211 billion yuan, an increase of 18.54% over the same period of the previous year; realized net profit attributable to shareholders of listed companies was 0.903 billion yuan, an increase of 20.42% over the same period last year.

Key points of investment

Overseas medium and large models are growing rapidly, and the amount of reagents is increasing rapidly

In the first half of 2024, the company achieved a main business revenue of 0.796 billion yuan, an increase of 22.79% over the previous year. Among them, the revenue from the overseas reagent business increased 29.11% year on year, which was higher than the overall growth rate of overseas business and higher than the growth of the domestic market. In terms of overseas instruments, a total of 2,281 fully automatic chemiluminescence instruments were sold in the first half of the year. The sales share of medium and large luminescent instruments increased to 64.80%, an increase of 10.07 percentage points over the same period last year. Thanks to the continuous increase in the share of medium and large machines, the gross margin of overseas instruments increased to 39.95%, an increase of 6.31 percentage points over the previous year.

Domestic growth is good, and more high-end dosage forms have been launched

The company is actively expanding domestic customers. The number of tertiary hospitals served in the first half of 2024 increased by 101 compared to the end of 2023, and completed the installation of 796 fully automatic chemiluminescence instruments, accounting for 75.13% of the installed capacity of large machines. The proportion of mainframe installed machines continued to increase. Among them, the X8 had a cumulative sales and installed capacity of 3170 units at home and abroad. At the end of 2023, the X8 had a cumulative total of 2,653 units installed, and 517 units were added in the first half of the year. On a quarterly basis, in Q1 of 2024, X8 achieved sales and installation of 220 units at home and abroad, with a marked increase in Q2. Overall instrument revenue also accelerated significantly. Domestic and foreign instrument revenue increased 12.40% year on year in the first half of 2024, while revenue from instrument products fell 3.86% year on year in Q1 in 2024. As the share of medium to large instruments increased, the gross margin of 2024H1 instrument products increased to 32.11%, an increase of 2.46 percentage points over the previous year. The higher throughput MAGLUMI X10 chemiluminescence immunoassay instrument was released in February 2024 to meet the needs of high-end customers and will continue to drive the instrument's gross margin increase in the future.

The gross margin of reagents is relatively stable, and collection execution is expected to increase the share. Domestic reagent business revenue increased 18.54% year-on-year in the first half of the year, which is higher than the overall growth rate of the company's domestic business, and the growth trend is good. At the end of 2023, chemiluminescence reagents were collected and landed in 25 provinces and cities including Anhui Province. The projects involved in the company were all successfully selected. Among them, six sex hormones dropped 52.91% from the benchmark price, eight infectious diseases decreased by 53.13% from the benchmark price, and sugar metabolism decreased by 51.88%. Considering that channel dealers shared the impact of the price reduction, the localization rate of the chemiluminescence industry was only 28.8%. The increase in share brought about by the implementation of the collection and implementation will make up for the price reduction.

Profit forecasting

It is predicted that the company's revenue for 2024-2026 will be 4.835, 5.859, and 6.98 billion yuan, respectively; the net profit to mother will be 2.035, 2.486, and 2.948 billion yuan, respectively; EPS will be 2.59, 3.16, and 3.75 yuan respectively. The current stock price corresponds to PE 24.7, 20.3, and 17.1 times, respectively. With excellent cost performance advantages and localization in many overseas countries, the company's export business has achieved continuous high growth in recent years. The proportion of the company's middle and high-end machines has increased and the flow line With the roll-out, leading customers such as the top three hospitals have also continued to break through. I am optimistic about the company's international strategic layout, covered for the first time, and given a “buy” investment rating.

Risk warning

Risks such as price reduction risks, overseas sales falling short of expectations, and installation progress falling short of expectations.