Why did revenue fall short of expectations despite growing 8%?

  • AmoyDx recorded revenue of 310 million yuan in the third quarter of 2026, up 8% year on year but below Goldman Sachs’ forecast of 331 million yuan, a shortfall of 21 million yuan. Revenue continued to grow, but the pace fell short of the bank’s earlier estimate.
  • The company attributed part of the shortfall to price cuts following the National Healthcare Security Administration’s release of new pathology charging guidelines, and another part to the settlement of overseas revenue in foreign currencies. In particular, continued yen depreciation meant revenue from the Japanese business was lower than expected when translated into yuan: exchange rates weighed on the conversion of local revenue into reported yuan revenue.

What offset the revenue shortfall and helped profit meet expectations?

  • Third-quarter net profit was 81 million yuan, up 10% year on year and in line with Goldman Sachs’ forecast. A supporting factor was an effective tax rate below the bank’s estimate, meaning the tax burden on the conversion of pre-tax profit into after-tax profit was lighter than expected.
  • Revenue can therefore fall short of expectations while profit meets them. Understanding the quarter requires separating operating revenue pressure from the support a lower tax rate provided to net profit; the change in the tax burden was among the reasons profit met expectations.

By how much did Goldman Sachs lower its subsequent forecasts and target price?

  • Goldman Sachs revised its revenue forecasts for 2026–2028 to 1.242 billion, 1.429 billion and 1.643 billion yuan, respectively, approximately 0.5%–0.6% below its previous forecasts. Its corresponding net profit forecasts are 365 million, 431 million and 483 million yuan, reductions of 0.4%, 1.3% and 1.6%, respectively. The revisions are small, but the cuts to profit forecasts are larger than those to revenue in the latter two years.
  • The 12-month target price was lowered from 26 yuan to 25 yuan, while the Buy rating was maintained. The valuation still uses a two-stage discounted cash flow model, with the 10.5% discount rate and 3% perpetual growth rate assumptions unchanged; the update accompanied downward revisions to forecasts rather than a change in the valuation framework.

What supports the Buy thesis after the near-term pressure?

  • Goldman Sachs’ long-term thesis is based on broader use of oncology companion diagnostics: it expects penetration to rise from 13% in 2020 to 45% in 2031, while the share of company revenue from overseas business exceeds 20% by 2031. The former expands the diagnostics market, while the latter adds to the company’s sources of overseas revenue.
  • Specific catalysts are a rapid ramp-up in sales of PD-L1 companion diagnostic products and the launch of more products overseas. Goldman Sachs also believes the company’s one-year forward price-to-earnings ratio is in the lowest quartile of its range over the past five years, with growth prospects and valuation together supporting the Buy rating.
  • This growth path is constrained by intensifying competition, regulatory changes at home and abroad, and the implementation of centralized procurement. This quarter’s price cuts and yen translation effects also show that revenue generated by business expansion remains subject to both prices and exchange rates.