23 years of industry competition intensified the company's performance under pressure. In 2023, the company achieved revenue of 1.366 billion yuan (-17.68), net profit of 0.033 billion yuan (-109.82), and net profit of non-return-to-parent -0.058 billion yuan (-118.76), mainly due to increased competition in the pharmaceutical industry, lower order prices, and delayed execution of some orders. Sales/management/research and development/financial expense rates were 5.83/10.41/8.96/0.34, respectively. In Q1-Q4 2023, the single-quarter revenue was 4.51/4.21/3.11/0.182 billion yuan, and the net profit attributable to the parent company was 1.02/0.65/-0.51/-0.148 billion yuan, respectively.

business sector under pressure, China and the United States double report GLP highlights the advantages of differentiation. In terms of business segmentation, the preclinical research business achieved revenue of 0.734 billion yuan (-20.55) and gross margin of 30.53 (-16.50pcts) in 2023, with new orders of 1.232 billion yuan and 934 research and development personnel in the preclinical research sector. In 23 years, the drug discovery and pharmaceutical research business achieved revenue of 0.632 billion yuan (-14.07), gross margin of 15.92 (-17.03pcts), newly signed orders of 0.968 billion yuan, the company according to business needs to synchronize the allocation of 1,301 drug discovery and pharmaceutical research sector research and development personnel. In 2023, the company's GLP laboratory area was expanded, and the scope of GLP services was increased to 9 items. 75 NMPA and 16 FDA approved clinical trials have been approved for new drugs and generic drugs completed in research and development. In 23 years, the company's China-US double-reported standard project income was 0.408 billion yuan, accounting for 29.87 of the main business income.

Pre-clinical integration of business development, overseas industry core regional multi-point layout, enhance the comprehensive ability. The company's integration advantages extend from chemical drugs to the field of biological drugs, has started antibodies, nanobodies, ADC, nucleic acid drugs and other biological drug discovery technology platform construction. In September 2023, the Boston R & D center in the United States was initially completed and put into use, which will help the company increase its R & D capabilities and provide effective support for the business development of international customers.

profit forecast and rating: the company's annual revenue from 2024 to 2026 is expected to be 14.53/15.98/1.806 billion yuan respectively, up 6.4/10.0/13.0 year on year. Net profit attributable to parents was 0.55/1.42/0.19 billion yuan respectively.

maintain the "overweight" rating.

Risk Warning: Intensified industry competition, increased uncertainty in the international environment, and less than expected overseas business expansion