WANYI SCIENCE(SH:688600) Huachuang Securities·2024-05-05 23:32Investment Rating - The report maintains a "Strong Buy" rating for the company, with a target price of 21.38 CNY, compared to the current price of 17.50 CNY [5][15]. Core Insights - The company achieved a revenue of 787 million CNY in 2023, representing a year-on-year growth of 16.50%. However, the net profit attributable to shareholders decreased by 8.37% to 43.81 million CNY. In Q1 2024, revenue fell to 115 million CNY, down 14.77% year-on-year, with a net profit of -33.62 million CNY [15][27]. - The environmental monitoring instrument business faced challenges, with revenue declining by 16% to 248 million CNY and a gross margin decrease of 4.3 percentage points to 41%. However, the company is expected to stabilize and recover in the coming years due to various environmental goals set for 2024 and 2025 [27]. - The leak detection business showed strong growth, with a revenue increase of 59.8% to 462 million CNY and an improved gross margin of 52.7%. The company also made progress in expanding its overseas customer base, with revenue from international markets rising from 1.05 million CNY in 2022 to 3.76 million CNY [27]. - The company invested 166 million CNY in R&D in 2023, a 24% increase year-on-year, focusing on developing new products in the analysis instruments and life health sectors [27]. - Despite short-term pressures in Q1 2024, the company’s long-term growth trend remains positive, as indicated by improvements in contract liabilities and cash received from sales [27]. Financial Summary - For 2023, the total revenue is projected at 787 million CNY, with a year-on-year growth rate of 16.5%. The net profit is expected to be 44 million CNY, reflecting a decline of 8.4%. The projections for 2024 to 2026 show significant growth in both revenue and net profit, with expected figures of 1.00 billion CNY, 1.36 billion CNY, and 1.62 billion CNY respectively [16][20][27]. - The company’s financial metrics indicate a PE ratio of 54 for 2023, decreasing to 24 in 2024, and further to 15 by 2026, suggesting an improving valuation as earnings grow [16][20].