Event: The company released its quarterly report for the year 24

1) 2024Q1-Q3: The company achieved revenue of 1.892 billion yuan in the first three quarters, an increase of 19.99% over the previous year, and achieved net profit of 0.596 billion yuan to mother, an increase of 15.10% over the previous year.

2) 2024Q3: The third quarter achieved revenue of 0.597 billion yuan, a year-on-year increase of 4.93%, and realized net profit to mother of 0.192 billion yuan, an increase of 11.71% year-on-year.

3) The company's net operating cash flow for the first three quarters was 0.447 billion yuan

Adsorption and separation materials are developing steadily. In the first three quarters of 2024, the company's revenue for adsorption and separation materials was 1.46 billion yuan, accounting for 77.19%; system equipment revenue was 0.366 billion yuan, accounting for 19.36%, and the share of adsorption and separation material revenue continued to increase. The company's “basic warehouse” business is developing steadily.

The product structure has been further optimized, and the growth rate of high-margin products represented by life sciences, metals, etc. is obvious, driving the gross margin of adsorption and separation materials to continue to increase.

The life science sector is developing well: the sales trend of the company's solid phase synthesis carrier business is good, and domestic and foreign customer projects continue to increase. According to company statistics and data disclosed in the 2022 annual report, the global market for GLP-1 diabetes and obesity treatment drugs is about 16 billion US dollars in 2021 and is expected to grow to about 40 billion US dollars in 2030. This will provide a broad potential market space for solid phase synthesis carriers and sieber resins, and continue to provide growth impetus for the company's life science sector.

The effects of the international layout continue to show. The company achieved overseas business revenue of 0.49 billion yuan in the first three quarters of 2024, an increase of 48% over the previous year. The company has been in overseas markets for many years, and internationalization is a strategy that the company has always adhered to. In recent years, the penetration rate of products in overseas markets has gradually increased, making breakthroughs in key overseas markets, continuously increasing international influence through expanding the scale of overseas market revenue, and arranging subsidiaries, laboratories, sales teams, etc. around the world to ensure the improvement of organizational functions. The company's overseas markets have expanded to cover North America, Europe, Asia, South America, Africa and other regions.

Maintain the company's “Highly Recommended” investment rating. Considering the possibility of overseas economic recession and the impact of the company's exchange rate, we slightly lowered the company's performance. We expect the company's revenue for 2024-2026 to be 2.939/3.572/4.482 billion yuan, and net profit to mother of 0.9/1.134/1.435 billion yuan, corresponding to the current PE of 29/23/18.2 times, maintaining the “Highly Recommended” rating.

Risk warning: risk of exchange rate fluctuations, weak overseas demand, economic recession, etc.