Incidents:

On October 26, 2024, the company announced its results for the third quarter of 2024. During the reporting period, the company achieved total operating income of 0.521 billion yuan (+87.05%), net profit of 0.245 billion yuan (+182.65%), deducting non-net profit of 0.224 billion yuan (+239.12%); in the single third quarter, the company achieved operating income of 0.1 billion yuan (+81.86%), net profit to mother 0.038 billion yuan (+320.08%), net profit of 0.032 billion yuan (+869.88 billion yuan) %).

Comment:

Revenue and profit have achieved high growth, and the profit side is particularly obvious

During the reporting period, the company achieved operating income of 0.521 billion yuan, net profit to mother of 0.245 billion yuan, and net profit of 0.038 billion yuan per Q3, an increase of 320.08% over the previous year. The profit side growth rate was significantly higher than the revenue side growth rate. The company's non-COVID-19 core revenue in 3Q23/4Q23/1Q24/2Q24/3Q24 was 0.54/2.00/0.282/0.137/0.1 billion yuan, respectively, and the core revenue showed a rapid year-on-year upward trend; considering the frequent occurrence of respiratory viruses in autumn and winter, the company's performance showed a sharp increase in Q4 of the same year; thanks to the continuous advancement of the national hierarchical diagnosis and treatment system, the release of multiple respiratory related clinical practice guidelines and expert consensus, and increased patients' awareness of early diagnosis and treatment during the profit reporting period. Achieve rapid growth.

The third quarter is the inflection point of annual revenue, and we are looking forward to rapid volume growth in Q4

The third quarter is a low season for the company's revenue. We are optimistic about the rapid expansion of the company's domestic theaters and overseas regions that have already been approved. The company's multi-joint inspection POCT has the two major characteristics of “rapid testing” and “joint testing”. It can achieve joint testing for 3-9 types of pathogens, and the results can be interpreted in 15-25 minutes. The fourth quarter will soon usher in a large number of in-hospital testing requirements. The company's current respiratory joint testing products cover more than 15 types of respiratory pathogens, which can fully meet clinical testing needs; the company has now been approved for two multi-joint testing products in Malaysia and Myanmar. The testing scope covers mainstream pathogens such as parainfluenza virus, influenza A, influenza B, syncytial virus, metapulmonary virus, etc., and I am optimistic that the company's Q4 multi-joint inspection products will achieve rapid release at home and abroad.

Investment advice: Maintaining a “buy” rating

We predict that in 2024-2026, the company's revenue will be 0.802/1.136/1.529 billion yuan, up 67.8%/41.7%/34.6% year on year; net profit to mother will reach 0.396/0.569/0.759 billion yuan, up 127.6%/43.8%/33.2% year on year; the corresponding EPS will be 2.90/4.17/5.56 yuan, and the corresponding PE ratio will be 15/10/8x. Maintain a “buy” rating.

Risk warning

Product development progress falls short of expectations, internationalization falls short of expectations, and market competition heightens risks.