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Berry Gene (000710): CSCO data on early screening of liver cancer that meets expectations

Berry Gene (000710): CSCO data on early screening of liver cancer that meets expectations
Performance summary: The company achieved operating income in the first three quarters of 201911.7 ppm, an increase of 14 in ten years.2%; net profit attributable to mother 3.10,000 yuan, an increase of 31 in ten years.1%; net profit after deduction to mother 2.US $ 2 million, a year-on-year decrease of 6%; operating cash flow of US $ 87,35 million, an annual increase of 2.4%.In addition, the company announced the 2019 annual results forecast: supplement the net profit attributable to the mother4.1?44 trillion, an increase of about 52.9%?64.1%, expected performance is better than expected. Performance is in line with expectations, and research and development expenses have increased significantly.From a single quarter point of view, the company achieved revenue in Q3 20194.2 ‰, an increase of 9 in ten years.At 7%, the net profit attributable to mothers is 64 million yuan, a decrease of 31 per year.5%, mainly due to an investment of 21 million yuan in associates and a credit impairment loss of about 3 million yuan.In terms of profitability, the company reported a short-term gross profit margin of 59.1%, a year to raise 0.8pp; Maximize the sales expense ratio by 0.5pp; the management expense ratio is the same as the same period of the previous year; the company expanded its research and development expenditure in the reporting year, the research and development expense was about 82 million yuan, an increase of 82% a year, corresponding to 1.5pp; The increase in net profit attributable to mothers mainly comes from investment income of approximately 50 million yuan, including investment income obtained as a result of the company’s confirmation of abandoning control of Shanmi, and investment income from associates Fujian and Rui. PreCar data CSCO unveiled, promising prospects for early screening of liver cancer: The company announced a breakthrough in early screening experiments for liver cancer announced in March 2019. The data shows that the sensitivity can exceed 97% under various 100% conditions.In September of this year, the company’s PreCar data appeared again at the Xiamen CSCO Conference: The extremely high-risk population screened by PreCar had a 6-month cancer attack14.6%, which is 14 times the current international liver cancer screening program; the diameter of the tumor at diagnosis is about 0.8?2.5cm, which is significantly smaller than the 5cm of the current international scheme; the early proportion of patients with cancer is close 南京夜网 to 100%, which is more than 5 times the current scheme.In summary, PreCar can screen extremely high-risk populations six months to one year earlier; because the five-year survival rate for early liver cancer is 50%?70%, and only 10% in the late stage?19%, so among patients who are also diagnosed with liver cancer, the 5-year survival rate of the patient population screened by PreCar has a potential 5-fold improvement.China is a big country with hepatitis B. The proportion of high-risk groups is far higher than the world average. Therefore, the incidence of liver cancer is relatively high. The advent of PreCar will bring countless high-risk groups to the gospel. Profit forecast and rating.We expect the company’s revenue to grow at a compound pace of approximately 24 in 2019-2021.1%, net profit attributable to mother is 26.8%.The 南京龙凤网 EPS for 2019/2020/2021 is 1.19/1.36/1.54 yuan, corresponding to PE of 25X / 22X / 19X, maintaining the “buy” level. Risk reminder: the risk that the clinical progress of tumor varieties does not meet expectations, the risk of continued price reductions in the NIPT industry, and the risk of CN500 admission being less than expected