Event: The company released its 2024 three-quarter report. 3Q2024, the company's revenue was 0.267 billion yuan, +6.45% year over year; net profit to mother was 0.086 billion yuan, +21.51% year over year; net profit without return to mother was 0.08 billion yuan, +29.01% year over year. In the first three quarters of 2024, the company's revenue was 0.857 billion yuan, +5.89% year over year; net profit to mother was 0.257 billion yuan, +25.62% year over year; net profit without return to mother was 0.243 billion yuan, +29.11% year over year.

Performance grew steadily, and gross margin continued to rise: 3Q2024, the company's gross margin was 70.07%, +0.98pct; sales/management/ R&D expense ratios were 14.26%/6.63%/19.91%, respectively, -9.24/+1.00/+3.42pct. By region, the company's domestic/international market revenue was 0.604/0.253 billion yuan, +1.19%/+19.11% year-on-year; of these, domestic/international market revenue for in-vitro diagnosis business was 0.442/0.237 billion yuan, respectively, +15.17%/+25.74%.

Continuous R&D investment consolidates advantages, and the product line is becoming more and more perfect: in the first three quarters of 2024, the company's R&D investment amount reached 0.152 billion yuan, +9.51% over the same period last year, and the R&D cost ratio was 17.73%. As of 2024/9/30, the company has obtained a total of 218 valid authorized patents, 55 invention patents, 152 software copyright certificates, and 455 domestic and international product registration/filing certificates. The company adheres to technological innovation as the foundation, clinical diagnosis and treatment as the guide, and focuses on the development and innovation of products in the two major fields of in vitro diagnosis, treatment and rehabilitation. After years of technology accumulation, the company has developed into a multi-product, multi-market platform company.

Investment proposal: The company's main business in vitro diagnosis & rehabilitation treatment maintains a high boom. The downstream installed capacity of its top products, electrochemiluminescence equipment, and photonic therapy devices, continues to increase, while driving demand for consumables.

The company's photoelectric medical and aesthetic platform has been basically built, the product line is complete, and the installation of products such as cold lifting is expected to rapidly increase contributing to incremental performance. We expect the company's net profit to be 0.418/0.515/0.623 billion yuan in 2024-2026, respectively, and the corresponding PE is 17x/14x/11x, respectively, maintaining an “incremental” rating.

Risk warning: industry competition intensifies, downstream demand falls short of expectations, medical and aesthetic business progress falls short of expectations