Introduction to this report:
The company has a multi-business and multi-market platform-based layout. The domestic market is expected to recover month-on-month, and the overseas market will maintain steady and rapid growth, and maintain an increase in holdings rating.
Key points of investment:
Maintain an increase in holdings rating. Considering the pace of tendering recovery, the 2024-2026 EPS forecast was lowered to 0.96/1.20/1.51 yuan (originally 0.99/1.29/1.68 yuan). Referring to comparable company valuations, the 2024 PE 20X was given, and the target price was lowered to 19.20 yuan to maintain the holding increase rating.
The performance was in line with expectations. In 2024, H1 achieved operating income of 0.59 billion yuan (+5.64%), net profit of 0.172 billion yuan (+27.78%), net non-net profit of 0.163 billion yuan (+29.16%), and net operating cash flow of 0.086 billion yuan (+33.81%), of which Q2 achieved operating income of 0.284 billion yuan (+1.27%) and net profit to mother 0.065 billion yuan (+39.33%) ), after deducting non-net profit of 0.06 billion yuan (+37.86%), revenue was lower than expected, and performance was in line with expectations. H1 gross profit margin 69.82% (+4.60pct), net profit margin 29.01% (+4.98pct). The increase in gross margin was mainly due to product structure optimization, and the share of high-margin IVD reagents and optoelectronic medical and aesthetic products increased.
The domestic market is under pressure in the short term and is expected to improve month-on-month in the second half of the year. 2024H1, the domestic market revenue is 0.429 billion yuan (+1.58%), of which the in vitro diagnosis business revenue is 0.319 billion yuan (+19.36%), maintaining steady growth. The specific protein production line is expected to achieve high growth. The glycation and chemiluminescence production line is under pressure in the short term. The company expands high-throughput instruments and launches the fully automatic electrochemiluminescence immunoanalysis line LiFOLas 8000 and the fully automated laboratory assembly line LiFOLAS9000. It is expected to continue to accelerate as domestic equipment tenders gradually resume growth. The revenue from the treatment and rehabilitation business is about 0.11 billion yuan (-29.03%). The clinical treatment production line is affected by the high H1 base in 2023, and the dermatology and aesthetic production line is expected to continue to grow rapidly. In the field of treatment and rehabilitation, the company is continuously iterating technology to find differentiated product value; in the field of consumer health, new products such as smart hair hats are being introduced repeatedly, increasing drainage, which is expected to become a new growth point.
The international market has built local operating capabilities and is expected to continue to grow rapidly. The company's international business focuses on key countries and key product markets. By recruiting localized sales and technical service personnel, the company steadily implements overseas marketing localization strategies to achieve steady and rapid growth.
2024H1, the international market revenue was 0.161 billion yuan (+18.26%), of which the in vitro diagnosis business revenue was 0.149 billion yuan (+26.91%). The company has set up subsidiaries in Russia and Indonesia, and strengthened EU CE certification, FDA certification and registration of major foreign countries (including Russia, Brazil, Mexico, etc.) for a series of products to obtain permits for products to enter the international market. It is expected to continue to grow rapidly as product registration progresses and localization is deepened.
Risk warning: New product launches and promotions fall short of expectations; risk of price reduction in product collection