Scitop Bio(SZ:300858) Soochow Securities·2024-04-25 08:00Investment Rating - The report maintains a "Buy" rating for the company [3][6]. Core Views - The company has experienced a significant decline in revenue due to weak demand in the downstream market, particularly affecting its compound feed business, while its probiotic business has shown strong performance [6]. - The company has adjusted its revenue expectations for 2024-2026, forecasting revenues of 4.4 billion, 5.9 billion, and 7.4 billion respectively, with year-on-year growth rates of 48%, 32%, and 27% [3]. - The report highlights an increase in gross margin due to a higher proportion of high-margin probiotic products, despite challenges in the compound feed segment [2][6]. Financial Performance Summary - In 2023, the company reported total revenue of 299.24 million, a year-on-year decrease of 18.94%, and a net profit of 93.48 million, down 14.93% year-on-year [3]. - For Q1 2024, the company reported revenue of 59 million, a decline of 18.2% year-on-year, while net profit was 19 million, down 7.66% year-on-year [3]. - The gross margin improved by 2.6 percentage points in 2023 and 1.8 percentage points in Q1 2024, driven by the growth of the probiotic business [2]. Revenue Breakdown - In 2023, the revenue from the compound feed segment was 73 million, down 57.8% year-on-year, while the probiotic segment saw a revenue increase of 37.4% to 190 million [6]. - The report anticipates that the probiotic business will continue to grow in 2024, supported by strong orders and stable growth from key clients [6]. Research and Development - The company has increased its R&D investment, which has contributed to improved profitability metrics, with net profit margins rising by 1.5 percentage points in 2023 and 3.6 percentage points in Q1 2024 [7].