MGI(688114) 中泰证券·2024-02-18 16:00Investment Rating - Buy rating maintained for the company [1] Core Views - The company's gene sequencing business is growing strongly, with a 30% YoY increase in sales revenue in 2023 [2] - The company is a global leader in the gene sequencing industry, with a comprehensive product matrix covering high, medium, and low throughput [2] - The company's globalization strategy is progressing well, with significant breakthroughs in key overseas markets such as the UAE and Singapore [2] - The company's short-term profitability may fluctuate due to increased R&D and sales investments, but its long-term growth prospects remain strong [3] Financial Forecasts and Valuation - Revenue is expected to be RMB 2,935 million in 2023, RMB 3,627 million in 2024, and RMB 4,639 million in 2025, with YoY growth rates of -31%, 24%, and 28% respectively [1] - Net profit is forecasted to be RMB -633 million in 2023, RMB -149 million in 2024, and RMB 79 million in 2025 [1] - EPS is projected to be RMB -1.52 in 2023, RMB -0.36 in 2024, and RMB 0.19 in 2025 [1] - P/E ratios are expected to be -49 in 2023, -207 in 2024, and 389 in 2025 [1] - P/B ratios are forecasted to be 3.5 in 2023, 3.6 in 2024, and 3.6 in 2025 [1] Company Overview - Total shares outstanding: 416 million [1] - Market price: RMB 74.09 [1] - Market capitalization: RMB 30,795 million [1] - Free float market capitalization: RMB 15,691 million [1] Industry and Business Analysis - The company is a leading player in the gene sequencing industry, with a strong competitive advantage [3] - The company's gene sequencing business is expected to maintain rapid growth, driven by its global expansion and technological advancements [2] - The company's laboratory automation business has been impacted by the decline in pandemic-related demand, but its core gene sequencing business remains robust [2] Financial Performance - The company's 2023 performance was affected by several factors, including a high base effect from the previous year's legal settlement, increased R&D and sales expenses, and a decline in pandemic-related demand for laboratory automation products [2] - Despite these challenges, the company's gene sequencing business continues to perform well, with strong sales growth and increasing global market penetration [2] Key Financial Ratios - ROE is expected to be -7% in 2023, -2% in 2024, and 1% in 2025 [1] - Gross margin is forecasted to be 59.8% in 2023, 59.6% in 2024, and 60.4% in 2025 [5] - Net margin is projected to be -22% in 2023, -4.1% in 2024, and 1.7% in 2025 [5] - Asset-liability ratio is expected to be 16.4% in 2023, 17.1% in 2024, and 19.2% in 2025 [5]