Event: The company released its 2024 semi-annual report. 2024H1 achieved operating income of 0.822 billion yuan, up 0.66% year on year; realized net profit of 0.25 billion yuan, up 3.64% year on year; net profit after deducting non-return to mother of 0.248 billion yuan, up 3.79% year on year.
Comment:
24H1 operating side was under pressure, and profitability was further improved: in 2024H1, the company achieved operating income of 0.822 billion yuan (YOY +0.66%), net profit due to mother 0.25 billion yuan (YOY +3.64%), and net profit not attributable to mother of 0.248 billion yuan (YOY +3.79%). 24H1, the company's gross sales margin was 77.33%, up 2.75pct year on year; net sales margin was 30.37%, up 1.05 pct year on year, further improving profitability.
R&D investment continues to increase, and the product pipeline is getting better: in the first half of 2024, the company's R&D expenses were 0.087 billion yuan, an increase of 16.21% over the previous year, accounting for 10.58% of revenue. 24H1, the company obtained a total of 8 patent certificates and 15 medical device registration certificates. The company successfully launched a medium- to low-speed and ultra-high-speed fully automatic chemiluminescence analyzer in the immunological diagnosis line; in the pathological diagnosis line, Maixin Biotech and Longjin Biotech joined hands to complement the FISH series of products for sub-diagnosis to further improve the layout of the pathological diagnosis platform.
Sinopharm's investment continues to increase its holdings and broaden the global market layout: In June 2024, the company disclosed in the “Notice Concerning a Change in the Shareholding Ratio of 5% or More Shareholders of the Company” and “Notice Concerning the Plan for Shareholders Holding 5% or More of the Company's Shares to Increase the Company's Shares” that Sinopharm continues to increase its shareholding ratio and plans to further increase its holdings, demonstrating Sinopharm's confidence in the company's future development. In addition, the company focused on overseas markets and brought star products such as biochemical testing systems and blood clotting testing systems to the 2024 ADLM to accelerate the expansion of the international market and further enhance the brand's international influence.
Profit forecast, valuation and rating: We maintain the 2024-2026 net profit forecast of 0.63/0.763/0.92 billion yuan. The current price corresponds to the 24-26 PE is 12/10/8 times. Considering that the company's pathology business overseas and the expansion of the new luminescence business helped the company continue to develop, we maintain the company's “buy” rating.
Risk warning: Risk of price reduction exceeding expectations, risk of changes in sales models, risk of new product development and listing progress falling short of expectations, and risk of stock price instability due to irregularities.