The company released its 2024 three-quarter report. 2024Q3 revenue was 0.139 billion yuan, +18.32% year on year, net profit of 34.53 million yuan after deducting non-return to mother net profit of 34.53 million yuan, or +144.80% year over year. Revenue for the first three quarters of 2024 was 0.338 billion yuan, +16.00% year-on-year, after deducting non-return net profit of 53.66 million yuan, or +129.64% year-on-year.

Cost-side optimization greatly increases product profits. The company's Q3 revenue increased +18.32% year on year, net profit after deducting non-return to mother increased +144.80% year on year, and the company's profitability increased significantly. On the cost side, 2024Q3's sales expenses were 13.68 million, a decrease of 55.71% compared to 30.89 million in the same period last year. 2024Q3 R&D cost was 4.75 million, down 34.03% from 7.2 million in the same period last year.

Along with the contraction of the company's expenses on the sales side, overall profitability has increased dramatically.

Overseas cooperation sets sail globally to create room for long-term growth. Recently, the company has continuously announced cooperation projects. On September 6, the company announced an investment of 30 million yuan to purchase 22.78% of Africa Bio Chem in the United Republic of Tanzania in East Africa. On September 17, the company announced that it had signed a “Product Purchase Contract” with a customer. The contract amount was no more than RMB 0.35 billion. The company has successively signed overseas equity agreements and large production orders to create long-term global growth space.

At the same time, according to the progress of the project, the company's “395 kg per year production line project” is expected to enter trial production by the end of the year, thereby releasing production capacity, which is expected to achieve rapid revenue and profit growth in line with the company's global layout.

Profit forecast: While sales expenses are reduced, profits are growing rapidly, and at the same time, the company is actively achieving a global layout. Optimistic about the company's long-term development and maintaining a “buy” rating. According to the three-quarter report and subsequent pipeline approval schedule, we expect the company's revenue for 2024-2026 to be 0.592 billion yuan, 0.762 billion yuan, and 0.933 billion yuan, respectively, up 36.1%, 28.7%, and 22.4% year-on-year; net profit to mother will be 0.119 billion yuan, 0.149 billion yuan, and 0.191 billion yuan, respectively, up 68.5%, 25.9%, and 28.0% year-on-year; corresponding PE is 28 times, 22 times, and 17 times, respectively.

Risk warning: Clinical progress falls short of expectations, product sales fall short of expectations, and overseas cooperation falls short of expectations.