SSSW(SH:688399) Orient Securities·2025-04-25 13:41Investment Rating - The report maintains a "Buy" rating for the company with a target price of 72.55 CNY [5][13]. Core Views - The company's performance has significantly improved, and the release of new products is expected to drive growth [2]. - The impact of centralized procurement on the company is still being digested, leading to a downward adjustment in revenue and gross margin forecasts for in vitro diagnostic reagents, medical instruments, and testing services [5]. - The company is projected to achieve a net profit attributable to shareholders of 0.20 billion CNY, 0.23 billion CNY, and 0.27 billion CNY for the years 2025-2027, respectively [5]. Financial Summary - In 2023, the company reported a revenue of 403 million CNY, which is expected to decline to 350 million CNY in 2024, before recovering to 410 million CNY in 2025, and reaching 570 million CNY by 2027 [7][15]. - The gross margin for 2024 is projected at 62.3%, with a gradual increase to 70.4% by 2027 [7][15]. - The net profit margin is expected to turn positive by 2025, with a forecasted net profit of 20 million CNY, increasing to 27 million CNY by 2027 [7][15]. - The company has improved its cash flow, achieving a positive operating cash flow of 1.46 billion CNY in 2024, a significant increase of 229% year-on-year [13]. Product Performance - In 2024, the revenue from diagnostic reagents is expected to be 314 million CNY, with a year-on-year decline of 10.8%, while the sales of nucleic acid purification reagents and molecular diagnostic reagents are projected to grow by 30.1% and 5.5%, respectively [13]. - The revenue from diagnostic instruments is anticipated to be 13 million CNY, down 9.8% year-on-year, and testing services are expected to decline by 64.2% to 5 million CNY [13]. Research and Development - The company has obtained 9 new domestic medical device product registration certificates and 18 filings in 2024, launching several new diagnostic products [13]. - The focus remains on enhancing research capabilities and expanding into six major areas, including reproductive health and infectious disease prevention [13].