Key points of investment

Recently, Norsig released its 2023 three-quarter report. In the first three quarters of 2023, the company achieved operating income of 525 million yuan (yoy +12.06%); realized net profit of 126 million yuan (yoy +50.11%); realized net profit of 98 million yuan (yoy +24.44%); and realized net operating cash flow of 129 million yuan (yoy +106.98%).

Profit prediction and rating: The company is a leading CRO service provider in China, with a full range of clinical trial CRO service capabilities, rich clinical trial experience, and a strict SOP system. It has established a good reputation in domestic and foreign markets. Looking forward to the future, pharmaceutical companies' R&D investment will continue to grow. The company is expected to rely on an international management team and professional operation team to continue to increase its market share with high technical level and high service quality, driving high-quality performance growth. The company's EPS for 2023-2025 is expected to be 1.72 yuan, 2.18 yuan, and 2.64 yuan respectively, corresponding to the closing price of November 14, 2023. The price-earnings ratio is 44.3 times, 35.0 times, and 28.9 times, respectively, covering the first time, giving it an “increased holding” rating.

Risk warning: order business operations and progress fall short of expectations; overseas business expansion falls short of expectations; market competition risk; changes in industry regulatory policies exceed expectations, etc.