Incident: The company announced its 2024 semi-annual results. 24H1 achieved revenue of 0.214 billion yuan, up 9.08% year on year; realized net profit of 0.024 billion yuan, up 4.44% year on year; realized net profit after deducting 0.022 billion yuan, up 1.05% year on year. Q2 achieved operating income of 0.109 billion yuan, an increase of 8.98% year on year; achieved net profit of 0.012 billion yuan, up 23.15% year on year; realized net profit after deduction of 0.012 billion yuan, up 17.18% year on year.

Revenue from clean and environmentally friendly laboratory solutions has increased significantly, and the overall gross margin is basically stable. By business, experimental analytical instruments/clean and environmentally friendly laboratory solutions/consumables and service businesses achieved revenue of 0.154/0.035/0.023 billion yuan, compared with -2.65%, +118.73%, and 14.15%; gross margins were 45.44%, 34.36%, and 53.25%, respectively. The company's comprehensive gross margin was 44.69%, -0.88pct year on year, a slight increase from the comprehensive gross margin for the full year of 2023.

The cost rate declined during this period, and R&D investment continued to increase. On the cost side, the 24H1 company's expenses rate for the period was 33.27%, down 1.67pct year on year, and the sales/management/finance/R&D expenses rates were 15.67%/6.79%/-0.84%/11.66%, respectively, -1.73/-0.75/+0.23/+0.59pct. The company adjusted the personnel structure and strengthened cost control. Sales expenses decreased by 1.76% year on year, and management expenses decreased by 1.83% year on year. R&D expenses increased 14.93% year over year, mainly due to the increase in the proportion of the company's high-level R&D personnel and payment of employee remuneration. In January of this year, the company announced that two senior technical experts, Cui Jianfeng and Geng Junqing, are the company's core technicians, responsible for the research and development of mass spectrometer and spectrometer series products respectively.

Positive progress has been made in many aspects of the business, and sample pre-processing leaders are saving energy for long-term development. (1) On the technical side, the company continues to build a domestic ICP-MS brand, enhance the performance of sample pretreatment products and explore new application scenarios and methods. The MVP series fully automatic vacuum parallel concentrator successfully obtained EU CE certification, the wholly-owned subsidiary CDS and the University of Delaware jointly released new proteomics sample preparation technology and successfully signed an exclusive license agreement; (2) In terms of market expansion, with the launch of inductively coupled plasma mass spectrometers, the company successfully expanded the semiconductor and medical fields, and achieved it by increasing product lines such as atomic fluorescence and atomic absorption Further expansion in new energy, rare earth smelting, etc.

Investment advice and valuation: We expect the company's revenue for 2024-2026 to be 0.473 billion yuan, 0.539 billion yuan, and 0.623 billion yuan respectively, with growth rates of 13.7%, 13.9%, and 15.5% respectively, and net profit to mother of 0.041 billion yuan, 0.052 billion yuan, and 0.068 billion yuan respectively, with growth rates of 47%, 28%, and 32% respectively. Maintain an “overweight” investment rating.

Risk warning: Product development and development fall short of expectations, cross-border operations fall short of expectations, risk of changes in agency business, and intensification of market competition.