Cathay Biotech (688065) Shanghai Securities·2024-11-15 03:47Investment Rating - The investment rating for the company is "Buy" (maintained) [3][8] Core Views - The company reported a significant improvement in its Q3 2024 performance, with revenue reaching 2.215 billion yuan, a year-on-year increase of 41.49%, and a net profit of 345 million yuan, up 9.97% year-on-year [3][4] - The increase in production capacity for dodecanedioic acid has driven revenue growth, alongside a substantial rise in R&D investment, which reached 169 million yuan in the first three quarters, a 33.52% increase year-on-year [4][5] - The collaboration with China Merchants Group is expected to enhance performance and expand application areas for the company's bio-based materials [5][8] Summary by Sections Financial Performance - For the first three quarters of 2024, the company achieved a revenue of 2.215 billion yuan, with a net profit of 345 million yuan, and a non-recurring net profit of 335 million yuan, reflecting year-on-year growth rates of 41.49%, 9.97%, and 25.51% respectively [3][4] - In Q3 2024 alone, revenue was 771 million yuan, a 44.06% increase year-on-year, with net profit at 98 million yuan, up 35.69% year-on-year [3][4] R&D and Production Capacity - The company has increased its R&D expenditure to 169 million yuan in the first three quarters, representing 7.62% of revenue, with Q3 R&D spending at 69 million yuan, accounting for 8.92% of revenue [4] - The production capacity for dodecanedioic acid has been ramped up, contributing to a significant rise in sales volume and revenue from long-chain dicarboxylic acids [4] Strategic Partnerships - The company has received approval for a targeted stock issuance to raise up to 6.6 billion yuan, aimed at enhancing collaboration with China Merchants Group to accelerate the industrialization of synthetic biology [5] - The partnership has led to tangible progress in various downstream applications, including textiles, new energy equipment, and construction materials [5] Market Position and Future Outlook - The company is positioned as a leader in the bio-based materials sector, showcasing innovations at major industry exhibitions and focusing on sustainable development through advanced biotechnologies [6][7] - Forecasts indicate that the company's net profit will grow to 498 million yuan in 2024, 624 million yuan in 2025, and 723 million yuan in 2026, with corresponding growth rates of 36.00%, 25.26%, and 15.73% [8][10]