Group 1 - The National Standardization Administration has announced the second batch of national standard verification points, with three from Beijing successfully selected, marking them as the first in the country in their respective fields [1][2] - The verification points include radiotherapy and nuclear medicine, in vitro diagnostic reagents, and health lighting, with the first two being managed by the Beijing Medical Device Testing Institute, which is the only institution covering two fields among the 35 selected nationwide [1] - The health lighting verification point is managed by the National Electric Light Source Quality Supervision and Inspection Center (Beijing), focusing on the entire lighting industry chain and promoting technological advancements and product quality improvements [1] Group 2 - The nuclear energy verification point is managed by the China Institute of Atomic Energy, focusing on radiation monitoring, nuclear facility decommissioning, and ionizing radiation measurement, aiming to integrate Chinese standards with international ones [2] - Standard verification points are responsible for validating technical requirements, core indicators, and testing methods, enhancing the scientificity, rationality, and applicability of standards [2] - The Beijing Market Supervision Administration plans to strengthen the construction of standard verification points to support high-quality development and the standardization service industry [2]

Core Viewpoint - The company reported a mixed performance for 2024 and Q1 2025, with revenue growth in 2024 but a decline in Q1 2025, while maintaining a positive outlook due to domestic market opportunities arising from government policies [1][5]. Group 1: Financial Performance - In 2024, the company achieved revenue of 30.13 billion yuan, with a year-on-year growth of 3.48%, while net profit attributable to shareholders was -6.01 billion yuan [1]. - Q4 2024 saw significant revenue growth of 61.6% year-on-year, reaching 11.43 billion yuan [1]. - For Q1 2025, revenue declined by 14.3% year-on-year to 4.55 billion yuan, with net profit at -1.33 billion yuan [1]. Group 2: Business Segments - The gene sequencing business generated revenue of 23.48 billion yuan in 2024, reflecting a 2.5% year-on-year increase, with instrument revenue at 9.60 billion yuan (+6.9% year-on-year) and reagent revenue at 13.73 billion yuan (+1.4% year-on-year) [2]. - The laboratory automation segment reported revenue of 2.09 billion yuan, with over 500 new installations, indicating a shift away from pandemic-related demand [2]. - New business revenue reached 4.0 billion yuan, excluding pandemic-related income, marking a 57.1% year-on-year increase, with single-cell related revenue growing by 172.0% [2]. Group 3: Market Position and Outlook - The domestic gene sequencing business performed well in 2024, with revenue of 16.07 billion yuan (+11.4% year-on-year) and a market share of 63.8% in new installations [3]. - The overseas segment faced challenges, with a revenue decline of 12.7% year-on-year to 7.41 billion yuan, but opportunities for growth exist due to competitive pricing and channel advantages [3]. Group 4: Cost Management and Profitability - The company's gross margin improved to 55.9% in 2024, with specific margins for gene sequencing, laboratory automation, and new businesses at 60.3%, 44.4%, and 35.5% respectively [4]. - R&D expenses decreased by 18.0% year-on-year to 7.46 billion yuan in 2024, while sales and management expenses increased [4]. - In Q1 2025, sales, management, and R&D expenses decreased by 10.5%, 9.2%, and 32.8% year-on-year respectively [4]. Group 5: Revenue Forecast and Valuation - Revenue projections for 2025-2027 have been adjusted to 36.65 billion yuan, 46.91 billion yuan, and 51.47 billion yuan, reflecting an 11% downward revision for 2025 and 2026 [5]. - The company is positioned as a leading domestic player in the gene sequencing equipment sector, with a target price of 88.0 yuan for 2025, based on a 10x price-to-sales ratio [5].

Investment Rating - The report maintains a "Buy" rating for the company [8] Core Views - The company is expected to benefit significantly from the domestic substitution opportunities arising from the Ministry of Commerce's ban, leveraging its technological and service advantages [1][3] - The company's revenue for 2024 is projected to be 30.13 billion RMB, with a year-on-year growth of 3.48% [1] - The company is positioned as a leading domestic player in the gene sequencing equipment sector, with a target price set at 88.00 RMB, reflecting a 10x price-to-sales ratio for 2025 [5][9] Revenue and Profitability - In 2024, the company's revenue from the gene sequencing business reached 23.48 billion RMB, showing a 2.5% year-on-year increase, with a significant rise in installed capacity [2] - The gross margin for the main business in 2024 was 55.9%, an increase of 0.3 percentage points from the previous year [4] - The company’s net profit attributable to the parent company is expected to turn positive in 2025, reaching 131.43 million RMB [7] Business Segments - The gene sequencing segment achieved a domestic revenue of 16.07 billion RMB in 2024, marking an 11.4% year-on-year increase, with a market share of 63.8% in new installations [3] - The laboratory automation segment generated 2.09 billion RMB in revenue, indicating a shift towards regular research and clinical applications [2] - New business revenue reached 4.0 billion RMB, excluding pandemic-related income, with a remarkable growth of 57.1% year-on-year [2] Financial Forecasts - Revenue projections for 2025, 2026, and 2027 are adjusted to 36.65 billion RMB, 46.91 billion RMB, and 51.47 billion RMB respectively, reflecting an 11% downward adjustment for 2025 and 2026 [5][7] - The company is expected to achieve a return on equity (ROE) of 1.66% in 2025, improving to 6.01% by 2027 [7]