SSSW(688399) Orient Securities·2024-10-23 10:12Investment Rating - The report assigns an "Accumulate" rating for the company for the first time with a target price of 86.57 CNY [1][3]. Core Views - The company focuses on "Maternal and Child Health + Infectious Diseases" with strong R&D capabilities, particularly in the in vitro diagnostics (IVD) sector, and has shown continuous improvement in operational capabilities [2][3]. - The IVD industry is expected to grow steadily, with the domestic market projected to expand from 716 billion CNY in 2019 to 1,332 billion CNY by 2024, reflecting a CAGR of 13.2% [2][26]. - The company has established a leading position in molecular diagnostics and is actively developing its presence in point-of-care testing (POCT) and overseas markets [2][3]. Financial Performance - In 2024 H1, the company achieved revenue of 180 million CNY, a decrease of 4.9% year-on-year, but a 2.0% increase in regular business revenue when excluding COVID-19 impacts [2][19]. - The net profit attributable to the parent company for 2024 H1 was 29.24 million CNY, a significant increase of 143% year-on-year, marking a return to profitability [2][19]. - The gross margin reached 68.1% in 2024 H1, with a notable improvement in cost control leading to a net margin of 16.5% [2][23]. Market Position and Strategy - The company has over 600 products, primarily focusing on nucleic acid molecular diagnostic reagents, which accounted for 90.2% of its revenue in 2024 H1 [2][19]. - The company is a major supplier of nucleic acid testing products in the infectious disease sector and has a leading brand in the vaginal microecology evaluation system [2][3]. - The company is actively expanding its overseas market presence, with international sales growing by 34.4% in 2024 H1, and regular overseas business revenue increasing by over 150% when excluding COVID-19 impacts [2][19].