Items:

The company issued a performance forecast for the mid-term report in 2021, with a first-half income of 294 million yuan to 306 million yuan (an increase of 150 percent over the same period last year) and a net profit of 70 million yuan to 82 million yuan, reversing losses over the same period last year. Of this total, the revenue in the second quarter was 175 million yuan to 187 million yuan (an increase of 98 percent over the same period last year), and the net profit of returning to the mother was 46.99 million yuan to 58.99 million yuan (an increase of 349 percent over the same period last year).

Comments:

The recoverability of tumor markers and HPV increased significantly. Tumor markers and HPV testing are currently the company's main sources of revenue, which were greatly affected by the epidemic last year and recovered well in the first half of this year. Tumor markers account for about 1cm 4 of the chemiluminescence market, and there is a wide space for import substitution. The accuracy of the product is comparable to that of Roche, and the flow fluorescence platform is suitable for multiple detection of swelling mark, which has obvious competitive advantage.

The volume of new products such as autoimmune testing items and chemiluminescence is expected. In addition to tumor markers and HPV, the company has added autoimmune testing items to the flow fluorescence platform. The flow fluorescence platform is suitable for joint autoimmune testing and has accounted for more than 70% of the autoimmune testing market in the United States. The company has a methodological advantage and is expected to gain a higher market share. In addition, the company chemiluminescence platform installed smoothly, is also expected to bring a certain performance increment to the company.

Marketing reform is progressing steadily. In 2020, the company's marketing reform was officially implemented, and the chairman and general manager personally grasped the marketing management. The main measures are as follows: 1) expand the size of the marketing team. The number of front-line marketing personnel in the company has increased from 80 in 19 to 140 in 20, and is expected to increase to more than 200 in 2021; 2) add product line management on the basis of the original regional management; 3) carry out equity incentives to the backbone of the marketing system. It is worth looking forward to the acceleration of the company's performance after the marketing reform.

Profit forecast, valuation and investment rating: we expect the company's 21-23 net profit to be 2.50,3.30 and 432 million yuan respectively, an increase of 107.8%, 31.6% and 31.0% PE respectively. The current stock price corresponds to 26,19,15 times of EPS in 2021-2023. We give the company a 22-year valuation of 35 times PE, corresponding to a target price of 127yuan. Maintain the recommended rating.

Risk tips: 1, flow fluorescence autoimmune detection, chemiluminescence detection, methylation business release is not up to expectations; 2, flow fluorometer, chemiluminescence meter, assembly line and other installation is not up to expectations; 3, the effect of marketing reform is not as expected.