CTI(SZ:300012) HTSC·2024-08-13 01:03Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 17.7, slightly down from the previous target of RMB 18.6 [4]. Core Views - The company reported a revenue of RMB 27.91 billion for 1H24, representing a year-over-year increase of 9%, with a net profit of RMB 4.37 billion, up 2% year-over-year. The second quarter showed stronger growth, with revenue of RMB 15.99 billion, up 11% year-over-year and 34% quarter-over-quarter, and a net profit of RMB 3.04 billion, up 7% year-over-year and 129% quarter-over-quarter [1][3]. - The report anticipates a compound annual growth rate (CAGR) for net profit of no less than 13% from 2024 to 2026, supported by the company's diversified business layout and strong anti-cyclical capabilities [1][4]. Summary by Sections Financial Performance - For 1H24, the company achieved a revenue of RMB 27.91 billion and a net profit of RMB 4.37 billion, with a net profit margin of 15.7% [1]. - The second quarter saw a significant increase in revenue and net profit, indicating a strong recovery and operational efficiency [1][3]. Segment Analysis - Life Sciences: Revenue of RMB 12.59 billion (up 22% year-over-year), gross margin of 49.4% (up 1.4 percentage points) [2]. - Pharmaceutical and Medical Services: Revenue of RMB 1.36 billion (down 34% year-over-year), gross margin of 24.3% (down 25.2 percentage points) [2]. - Industrial Testing: Revenue of RMB 5.59 billion (up 13.8% year-over-year), gross margin of 45.5% (up 2.5 percentage points) [2]. - Trade Assurance: Revenue of RMB 3.75 billion (up 9.3% year-over-year), gross margin of 72.7% (up 3.1 percentage points) [2]. - Consumer Product Testing: Revenue of RMB 4.62 billion (down 3.9% year-over-year), gross margin of 43.2% (down 1.0 percentage point) [2]. Profitability and Valuation - The report projects a slight adjustment in profit forecasts, with expected net profits of RMB 10.0 billion, RMB 11.8 billion, and RMB 13.1 billion for 2024, 2025, and 2026 respectively [1][4]. - The company is valued at a PE ratio of 30x for 2024, with a target price reflecting a premium due to its market leadership and diversified business model [4][15].