严酷行业环境下实现环比稳定，非主业因素导致当期利润受损国内CXO产业在23H2时遭遇行业环境加速恶化，需求收缩叠加价格竞争，业内新签订单数量、单价普遍下降。随着相关订单逐步兑现到收入，公司业绩端因此继续承压。Q2单季度公司实现营收16.98亿元（yoy-10.92%，qoq +2.28%），整体毛利率41.51%（yoy +1.35pct，qoq+3.68pct），费用端因收入下降、投入加大，整体费用率同比均有上升。Matters:
The company 24H1 achieved revenue of 3.358 billion yuan (-9.50%), realized net profit of 0.493 billion yuan (-64.50%), and net profit of 0.64 billion yuan (-19.30%) after deduction.
Ping An's point of view:
Month-on-month stability was achieved in a harsh industry environment. Non-main business factors damaged current profits. The domestic CXO industry experienced accelerated deterioration in the industry environment at 23H2. Demand contraction compounded price competition, and the number of new orders and unit prices in the industry generally declined. As related orders are gradually fulfilled to revenue, the company's performance side continues to be under pressure as a result. The company achieved revenue of 1.698 billion yuan (yoy -10.92%, qoq +2.28%) and an overall gross profit margin of 41.51% (yoy +1.35pct, qoq+3.68pct) in a single quarter. On the cost side, the overall cost ratio increased year-on-year due to declining revenue and increased investment.
Listed company shares held by the company experienced large fluctuations in H1, causing a loss of 0.111 billion in changes in the fair value of financial assets in Q2, which in turn had a significant negative impact on current apparent profit. Net profit not attributable to mother for a single quarter in Q2 reached 0.337 billion yuan (yoy -18.19%), which is closer to the performance results of the main business compared to apparent profit.
Measures to improve quality and efficiency ensure a relatively stable gross margin
The gross margin of 24H1's main business was 39.13%. Compared with -0.59pct in the same period last year, the gross margin remained relatively stable despite a decrease in order unit prices and an increase in investment in laboratory and other businesses, fully reflecting the asset-light advantage of clinical CRO. Specifically, the gross profit margin for clinical trials in the first half of the year was 38.36% (yoy -1.38pct), and the gross profit margin for clinical trial-related and laboratory services was 39.88% (yoy+0.19pct).
Behind the relative stability of gross margin, the company has adopted a number of measures to improve quality and efficiency, including labor cost control, team structure optimization, and team efficiency improvement. In addition, the company also improves the overall operating efficiency of the enterprise in the medium to long term through process optimization and AI assistance.
The industry environment is expected to improve, and order growth is gradually improving
In the first half of the year, Beijing, Guangzhou, Shanghai and other places launched full-chain support policies for innovative drugs to encourage local incubation and accelerate the development of innovative drugs. Although the overall innovative drug investment and financing environment is still difficult, the industry has shown some signs of improvement. In addition, in recent years, many of China's innovative drugs have been authorized overseas, bringing more cash flow to relevant pharmaceutical companies and helping them advance more projects. Combining the above factors, domestic innovative clinical trials are expected to gradually improve. Under this premise, the company has also stepped up its order development efforts. The number and amount of new orders signed by 24H1 have achieved the same and relatively good growth, laying the foundation for further improvements in subsequent performance.
Maintaining the “Recommended” rating: Considering the current investment and financing environment and losses due to the company's non-main business factors, adjust the 2024-2026 net profit forecast to be 1.705, 2.075, and 2.505 billion yuan (originally 2.271, 2.796, 3.505 billion yuan). Although there was a large decline in apparent profit, a significant portion of the adjustments came from hypothetical adjustments due to changes in non-main business factors, which had little impact on the company's overall valuation. Furthermore, the company has successfully increased its market share and operating capacity in the cold winter of the industry, and is expected to gain a greater advantage when the industry recovers. Maintain a “Recommended” rating.
Risk warning: 1) New drug development is volatile and uncertain, which may cause fluctuations in the company's performance; 2) If the quality of services provided by the company does not meet the requirements, it may lead to rework, lost orders, etc.; 3) The company expands its business globally through mergers and acquisitions, etc., and if integration is not successful, it may have a negative impact on the company's long-term development.
