Event: the company announced that in the third quarter of 2023, 2023Q1-3 realized operating income of 283 million yuan, an increase of 6.45% over the same period last year, and a net profit of 55 million yuan, down 16.56% from the same period last year. In a single quarter, the company's Q3 in 2023 achieved operating income of 97 million yuan, an increase of 10.22% over the same period last year, and a net profit of 24 million yuan, an increase of 55.58% over the same period last year.

The gross profit margin is relatively stable, and the expense rate has increased more as a whole. The company's 2023Q1-3 management expense rate was 17%, up 3.8 pct from the same period last year; sales expense rate was 8.3%, down 0.5 pct from the same period last year; financial expense rate was 0.1%, up 1.1 pct from the same period last year; and R & D expense rate was 13.8%, increasing 3.7pct over the same period last year. The company's 2023Q1-3 gross profit margin was 59.6%, up 0.7pct from the same period last year, and the net profit rate was 19.3%, down 5.3pct from the same period last year.

In the first three quarters, the growth rate of the income side is mainly affected by the weak terminal demand, while the impact of the university side is relatively small. Since April 2023, the terminal demand of the industry has been weak, and the growth of the company's operating income has slowed down. at the same time, the revenue of specific products such as streptavidin and guanidine isothiocyanate accounted for a relatively high proportion last year, and the high base also affected the growth rate of operating income this year. From the perspective of customers, we expect enterprise-end customers to be greatly affected by the macro environment, with a significant slowdown in revenue growth, while college-end customers recover better, demand is more rigid, and revenue growth is more robust.

The promotion of fund-raising projects and equity payment lead to the rapid growth of short-term expenses, but the marginal impact is weakened. Since the second half of 2022, with the promotion of fund-raising projects, the company's managers and R & D personnel have increased rapidly, which has led to a rapid increase in personnel compensation expenses. In addition, share-based payments generated by equity incentives have also increased the corresponding fees, resulting in greater pressure on profit growth in the first three quarters. However, in the third quarter alone, the profit side has returned to growth, and the impact of the above-mentioned expense side has gradually weakened, and it is expected to resume relatively rapid growth in the fourth quarter and next year.

Maintain a "buy" rating. Based on the stable demand of colleges and universities, overseas business will gradually contribute to the increment. It is estimated that the EPS in 23-25 will be 0.47max 0.61 shock 0.78 yuan, maintaining the "buy" rating.

Risk hint: research and development is less than expected risk, competition aggravates risk, information system and network security risk