Core Viewpoint - The company reported a significant decline in revenue and net profit for the first half of 2025, with a year-over-year revenue decrease of 20.9% and a net profit drop of 46.8% [1] Group 1: Financial Performance - In the first half of 2025, the company achieved revenue of 1.246 billion yuan and a net profit of 189 million yuan, with a significant decline in operating cash flow to -56 million yuan [1] - For Q2 2025, the company reported revenue of 445 million yuan, down 37.64% year-over-year, and a net profit of 6 million yuan, reflecting a 99.95% decrease [1] Group 2: Business Segment Analysis - The drug testing business showed recovery with a revenue of 145 million yuan, up 4.3% year-over-year, benefiting from a strong position on Amazon in the U.S. [2] - Infectious disease testing revenue was 379 million yuan, down 21.1% year-over-year, attributed to lower respiratory disease prevalence compared to the previous year [2] - Chronic disease management testing generated 563 million yuan, down 26.1% year-over-year, impacted by medical procurement policies, but future growth is expected with platform upgrades [2] Group 3: Profitability and Innovation - The company's gross margin for H1 2025 was 62.87%, a decrease of 1.47 percentage points year-over-year, primarily due to a higher proportion of lower-margin drug testing [3] - The company is pursuing a dual-track R&D strategy focusing on expanding existing product lines and developing new technology platforms, which is expected to enhance its market position in POCT [3] Group 4: Revenue Forecast - Projected revenues for 2025-2027 are 2.668 billion, 3.081 billion, and 3.520 billion yuan, with year-over-year growth rates of -12.9%, 15.5%, and 14.2% respectively [4] - Expected net profits for the same period are 403 million, 500 million, and 615 million yuan, with respective growth rates of -28.2%, 24.1%, and 23.0% [4]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company reported a revenue of 1.246 billion yuan in the first half of 2025, a year-on-year decrease of 20.9%, and a net profit attributable to shareholders of 189 million yuan, down 46.8% year-on-year [1][3] - The report highlights that the toxicology testing business is recovering, while infectious disease and chronic disease testing are under pressure. The toxicology testing revenue reached 145 million yuan, an increase of 4.3% year-on-year, with strong sales on platforms like Amazon in the U.S. [3] - The company is expected to see a recovery in revenue from respiratory disease testing as new products gain certification in both domestic and U.S. markets [3] - The report anticipates that the company's revenue will be 2.668 billion yuan in 2025, with a year-on-year growth rate of -12.9%, followed by 3.081 billion yuan in 2026 and 3.520 billion yuan in 2027, with respective growth rates of 15.5% and 14.2% [4] Financial Summary - For the first half of 2025, the company's gross profit margin was 62.87%, a decrease of 1.47 percentage points year-on-year, attributed to a higher proportion of lower-margin toxicology tests and domestic medical reform policies [3] - The company’s operating cash flow was -56 million yuan, a year-on-year decline of 128.1% [1] - The projected earnings per share (EPS) for 2025 is 0.84 yuan, with a price-to-earnings (P/E) ratio of 27.66 times based on the closing price on August 20, 2025 [4]