The revenue side grew well, and the gross profit margin fell year-on-year. In the first half of 2023, the company achieved revenue of 3.356 billion yuan (year-on-year + 16.9%), net profit of 267 million yuan (- 10.82%), and non-return net profit of 268 million yuan (- 8.8%). Of this total, 2023Q2's revenue was 1.803 billion yuan (year-on-year + 20.05%), net profit was 134 million yuan (year-on-year-21.84%), and non-return net profit was 126 million yuan (year-on-year-19.71%). The gross profit margin fell 3.49 percentage points in the first half of 2023 compared with the same period last year, mainly due to the decline in prices caused by intensified competition, which increased during the epidemic and the gross profit margin was high, which has now returned to the pre-epidemic level.

Sub-sector performance: the growth rate of bioengineering plate is eye-catching. In the segment, aseptic preparation solutions and stand-alone, bioengineering solutions and stand-alone business still performed well, with revenue of 898 million yuan (+ 30.04%) and 602 million yuan (+ 32.81%) respectively in the first half of 2023. The integration of pharmaceutical water equipment and engineering systems has increased significantly, with revenue of 451 million yuan (+ 102.33% compared with the same period last year) in the first half of 2023, and product quality continues to be recognized.

With the transformation to high-end equipment, nuclear drug equipment occupies a leading position in China. In the first half of 2023, Chutian Siweikang launched a fully automatic cell culture production system, which has some orders; in April, it established a subsidiary Chutian Keyi, which mainly engaged in the R & D and manufacture of high-end centrifuges and other scientific instruments; in June, Chutian Xinbang was established, focusing on purification engineering, ETC and so on. A variety of products in the field of complex preparations have been introduced to the market, and nuclear drug equipment has established a leading position in the domestic market, which is expected to extend from the medical end to the medical end.

Overseas markets have been opened up smoothly, and the revenue side has achieved initial results. In the international market, the company gives full play to the advantages of international SSC in overseas markets, and new orders are growing rapidly compared with the same period last year. The global customer center has been put into use, and successfully held a series of activities, such as International customer Open Day, ROMACO customer Open Day, New Product launch Open Day, etc., and the frequency of domestic and international customer site visits has been greatly increased. In the first half of 2023, the European region achieved revenue of 382 million yuan (+ 62% compared with the same period last year).

Investment advice: open up overseas markets smoothly and maintain a "buy" rating.

In the first half of 2023, under the challenge of the cooling of the domestic investment and financing environment and the intensification of competition in the industry, the company continued to enrich its product line and achieved steady revenue growth. In view of the periodic decrease in high gross rate orders after the epidemic, the company's profit forecast is revised downgrade. the estimated net profit for 2023-2025 is 5.73 pesos 6.72 / 796 million yuan (the original value for 2023-2025 is 7.07 pounds 8.56 pounds 1.009 billion yuan). Year-on-year + 0.91% beat 17.35% picks 18.49% (2023-2025 original value + 24.61% bind "21.09% debacle" 17.86%).

With the expansion and maturity of the product line, overseas markets are expected to expand, and its high gross profit margin provides the company with a new engine to help the company stabilize high-quality growth.

Risk hint: new orders are not as expected, supply chain recovery is not as expected, and overseas competition risks.