Shenzhen YHLO Biotech (688575) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 was RMB 960 million, down 10.69% year-over-year due to a sharp decline in COVID-related business, while non-COVID business grew 31.89% to RMB 960 million.

• Net profit attributable to shareholders rose 22.25% year-over-year to RMB 173 million, driven by strong growth in non-COVID self-developed products and improved gross margin.

• Gross margin increased to 61.94% from 49.36% year-over-year, mainly due to higher sales of non-COVID self-developed products.

• Operating cash flow turned positive at RMB 141 million, compared to a significant outflow last year.

• R&D investment increased 8.79% year-over-year to RMB 155 million, accounting for 16.19% of revenue.

Financial highlights

• Revenue: RMB 960 million, down 10.69% year-over-year.

• Net profit: RMB 173 million, up 22.25% year-over-year.

• Basic and diluted EPS: RMB 0.30, up 20% year-over-year.

• Operating cash flow: RMB 141 million, a significant improvement from last year’s outflow.

• Gross margin: 61.94%, up 12.58 percentage points year-over-year.

Outlook and guidance

• Company expects continued growth in non-COVID self-developed business, with ongoing expansion in domestic and international markets.

• R&D and product innovation remain a strategic focus, with new product launches and pipeline expansion planned.

• No interim dividend or capital increase from reserves proposed for the period.