MGI(SH:688114) ZHESHANG SECURITIES·2024-11-10 02:23Investment Rating - The investment rating for the company is "Accumulate" [6] Core Views - The company reported a revenue of 1.87 billion yuan for the first three quarters of 2024, reflecting a year-on-year decline of 15.2%, with a net profit attributable to shareholders of -460 million yuan. In Q3 alone, revenue was 660 million yuan, down 13.2% year-on-year, with a net profit of -170 million yuan. The core product segment (gene sequencing) generated 1.54 billion yuan in revenue, with cumulative sales of over 670 units of gene sequencers, marking a 4% year-on-year increase. Despite pressures on growth due to normalized demand and macroeconomic conditions, revenue growth in the core segment is expected in 2025 due to increased installations and ongoing overseas expansion [2][5]. Summary by Sections Revenue Performance - In Q3 2024, the gene sequencer business achieved revenue of 530 million yuan, a year-on-year decline of approximately 11%. The revenue breakdown shows 1.05 billion yuan from the China region, 150 million yuan from the Asia-Pacific region (excluding the UAE project, which saw a 16% year-on-year increase), 220 million yuan from Europe and Africa, and 120 million yuan from the Americas. Q3 revenue from the China region was 370 million yuan, down 6% quarter-on-quarter, while the Asia-Pacific region saw a 6% decline to 40 million yuan. The Europe and Africa region experienced a 10% quarter-on-quarter growth to 90 million yuan, indicating a recovery trend, and the Americas region reported a 29% year-on-year increase to 30 million yuan, despite a 16% quarter-on-quarter decline [2]. Product Segmentation - For the first three quarters of 2024, the gene sequencer business generated 580 million yuan from instrument sales and 960 million yuan from reagent consumables. In Q3, instrument revenue was 170 million yuan, showing a 19% decline both year-on-year and quarter-on-quarter, while reagent consumables achieved 360 million yuan in revenue, down 11% year-on-year but up 5% quarter-on-quarter. The growth rate of consumables outpaced that of instruments, indicating an increase in usage frequency and market acceptance, suggesting a transition into a high-volume consumables phase [3]. R&D Investment - The company maintained a high R&D expense ratio of 29.6% for the first three quarters of 2024, up 0.5 percentage points year-on-year. This sustained investment in R&D is crucial for product innovation and iteration, enhancing the company's competitive edge. As a leading domestic player in the gene sequencing sector, the company is in a phase of rapid product launches and expanding its product matrix. The introduction of innovative products, such as the DNBSEQ-T20×2, which boasts a single-run throughput of 42Tb (PE100) or 72Tb (PE150) and reduces the cost of individual genome detection to 100 USD, is expected to significantly boost market share both domestically and internationally [4]. Financial Forecast - Considering the ongoing domestic and international environmental changes and the slow recovery in demand, the company is expected to incur significant losses in 2024. The revenue forecasts for 2024-2026 are 2.528 billion yuan, 3.024 billion yuan, and 3.609 billion yuan, reflecting year-on-year changes of -13.16%, 19.64%, and 19.34%, respectively. The net profit attributable to shareholders is projected to be -578 million yuan, -332 million yuan, and 10,000 yuan for the same periods, with a price-to-sales ratio of 7 times in 2025 [5].