Event: The company released its 2024 annual report, achieving annual operating income of 1.378 billion yuan, a year-on-year increase of 7.15%; the net profit attributable to the parent company was -18 million yuan, a year-on-year increase of 74.50%; The net profit after deducting non-attributable to the parent company was -83 million yuan, a year-on-year increase of 56.82%.

In terms of single-quarter performance, in the fourth quarter of 2024, the company achieved operating income of 392 million yuan, a year-on-year decrease of 5.93%, net profit attributable to the parent company of -36 million yuan, a year-on-year decrease of 767.24%, and non-net profit of -53 million yuan, a year-on-year increase of 0.02%.

The company's single-quarter revenue is relatively stable, and the profit level fluctuates, mainly due to the company's efforts to strengthen the operation and management of procurement, production, inventory and other links through a number of measures to control asset impairment losses.

Resource utilization continues to be optimized, and profitability is improving. The company's gross profit margin in 2024 was 69.93%, a year-on-year decrease of 1.10pp, mainly related to the change of product structure, the sales expense ratio was 35.67%, a year-on-year decrease of 1.09pp, the management expense rate was 16.79%, a year-on-year decrease of 1.58pp, mainly due to the decrease in rent expenses and office expenses, and the R&D expenses were 21.80%, a year-on-year decrease of 4.53pp, mainly due to the company's optimization of R&D project management, focusing on R&D priorities, and improving the efficiency of capital use, and the financial expense ratio was 0.88%. The year-on-year increase was 2.38pp, mainly due to the decline in interest income, and the company's net profit margin in 2024 was -1.42%, a year-on-year increase of 4.24pp.

The growth momentum of conventional business is good, and we are optimistic about the acceleration of multi-dimensional new products. In 2024, the company's biological reagent segment revenue will be 1.108 billion yuan, a year-on-year increase of 17.43%, and the revenue of diagnostic reagents will be 157 million yuan, a year-on-year decrease of 36.72%, mainly affected by the product base of the epidemic in the same period

　　　 Life science business: The company continues to focus on basic scientific research reagents, gene sequencing reagents, molecular diagnostic raw materials and reagents and other subdivisions. More than 320 new products have been developed, 34 core technology developments have been completed, and breakthroughs have been made in multiple technical fields. At the same time, the company continues to promote the advantageous product line to go overseas, continues to deepen the localized operation in North America, Europe, Southeast Asia, and actively expands its business in France, Italy and other regions, with more than 170 overseas business employees, and foreign employees account for nearly 30%, and has gradually established an efficient and mature overseas commercialization strategy, with overseas revenue of 101 million yuan in 2024, a year-on-year increase of 121.85%, and more advantageous reagent products are expected to achieve rapid growth with the help of overseas channels in the future.

In vitro diagnostic business: The company has established a rich product system in the field of IVD, and continues to make breakthroughs in cutting-edge fields such as Alzheimer's disease detection, respiratory pathogen detection, and microfluidics. By the end of 2024, the company has covered more than 3,200 end customers of diagnostic reagents, laying a solid foundation for the admission of more characteristic products in the future.

Biopharmaceutical business: The company mainly focuses on four product lines and services: new drug R&D reagents, GLP-1 peptide raw materials, mRNA raw materials, and vaccine evaluation. During the reporting period, the company continued to improve its products and services, officially launched the GLP-1 fermentation supply chain solution, realized the preparation of 5000L fermentation scale, with an annual production capacity of several tons, and has provided nearly 100 kg of supply to many domestic customers, which is expected to grow rapidly in the future. In terms of new drug R&D reagents, the company has deeply cultivated the customer base of leading pharmaceutical companies and CROs, and the market share of some single products has reached the first place in China.

Profit forecast and investment suggestions: According to the performance data, we adjust the profit forecast, and it is expected that the volume of new products with special characteristics in bioscience, in vitro diagnostics and other related sectors is expected to drive the company's profits to rise rapidly, and the company's revenue is expected to be 15.90, 19.60, and 2.399 billion yuan in 2025-2027 (17.79 billion and 2.191 billion yuan in 25-26 years before adjustment), a year-on-year increase of 15%, 23%, and 22%; It is estimated that the company's net profit attributable to the parent company in 2025-2027 will be 0.93, 1.84 and 294 million yuan (196 million and 314 million yuan in 25-26 years before adjustment), a year-on-year increase of 615%, 98% and 60%. The company's current stock price corresponds to 103, 52, and 33 times PE from 2025 to 2027, and we believe that the company is in the early stage of rapid growth after transformation, and the revenue scale and profitability are expected to rise rapidly under the continuous increase in blockbuster products, so we can give a certain valuation premium and maintain a "buy" rating.

Risk warning events: new product research and development risks, policy change risks, market competition intensification risks, etc., the public information used in research reports may have the risk of information lag or untimely update, etc.