Event: on August 19, 2022, the company released its semi-annual report for 2022, with a cumulative operating income of 320.6 million yuan in the first half of the year, an increase of 5.7% over the same period last year, and a net profit of 43.1 million yuan, down 42.4% from the same period last year. Deducting non-return net profit of 28.7 million yuan, down 54.5% from the same period last year. Among them, Q2 company's main revenue in a single quarter was 175.5 yuan, down 4.9% from the same period last year, and the net profit returned to its mother was 37.8 million yuan, down 27.0% from the same period last year.

Comments:

The disturbance of the epidemic situation is large, and the performance is under short-term pressure. The company's market is mainly in Chinese mainland (sales revenue accounts for 97.5%), of which East China market is about 129.2 million yuan, accounting for 40.3%; North China market is about 55.0 million yuan, accounting for 17.2%; South China market is about 42.9 million yuan, accounting for 13.4%; Southwest market is about 36.6 million yuan, accounting for 11.4%; Central China market is about 26.5 million yuan, accounting for 8.3% The northeast market is about 13.0 million yuan, accounting for 4.1%, while the northwest market is about 9.6 million yuan, accounting for 3.0%. During the epidemic period, the detection and measurement of the company's customers in East China, North China, Northeast and other major regions were significantly reduced by the epidemic, with reagent revenue of 210.0 million yuan, down 17.2% from the same period last year. Although the company's instrument revenue during the reporting period was 108.8 million yuan, an increase of 131.4% over the same period last year, its gross profit margin (25.4%) was significantly lower than that of reagent products (68.7%), and the company's overall gross profit margin decreased by 15.6% compared with the same period last year.

Face up to the adverse effects of the epidemic and adjust the strategic layout in a timely manner. In the first half of the year, the company achieved a total operating income of 320.6 million yuan, an increase of 5.7% over the same period last year, a net profit of 43.1 million yuan, down 42.4% from the same period last year, and a non-return net profit of 28.7 million yuan, down 54.5% from the same period last year. The main reason is that during the reporting period, due to the closed-loop management of the epidemic in Shanghai for a long time, the production and operation activities were significantly affected, and the routine diagnosis and treatment activities of terminal customers such as hospitals and physical examination centers were limited, which had a certain impact on the company's market sales. However, while carrying out online promotion with the help of new media, the company actively adjusted the focus of short-term marketing work and timely launched the supporting instruments and consumables needed for COVID-19 testing in order to cope with the changes in short-term market demand and achieve a small increase in business income.

Deeply ploughing the field of biomedicine, covering a wide range of products and marketing. The company's products mainly cover immune, molecular and biochemical fields, involving autoimmunity, tumor, cardiovascular, infection, hormone, metabolism and other aspects. The company has obtained a total of 316 domestic medical device registration certificates and filing certificates, of which 107 products meet the requirements of EU IVD 98/79/EC Directive or 2017 EU 746 (EU) IVDR, and a total of 52 patents have been granted. By the end of the reporting period, the company's products have covered more than 1900 end-users in 31 provinces and cities across the country, of which tertiary hospitals account for 70.86% of hospital customers and are the company's main end-users.

Investment suggestion: as a leading echelon in the field of in vitro diagnosis, Tuojing Life has caused great disturbance to the company's operation due to the epidemic, but it is optimistic about its product layout in COVID-19 and multi-front, so it is recommended to pay continuous attention to it.

Risk factors: the risk of the continuous impact of COVID-19 epidemic, the risk of industry policy change, the risk of product quality, the risk of research and development and registration of new products, the risk of long preparation time for new products to enter the market, the risk of market competition, the risk of declining gross profit of products, and the risk of changing sales model.