Biohit H1'25 preview: Defensive profitable growth continues

Translation: Original published in Finnish on 7/31/2025 at 7:41 am EEST.

Biohit will release its H1 report on Wednesday, August 6, at 9:30 am EEST. We expect revenue to continue double-digit growth, driven by Gastropanel and new openings announced earlier in the year. We also expect earnings to be in moderate growth. The situation in the Middle East brings unpredictability to the figures, as the company has stated that the uncertainties which began in late 2024 will continue into 2025. Besides the figures, eyes will be on the success of the new product launch, the commencement of distribution partnerships, and a new market opening, which the company has anticipated around mid-year. On the balance sheet side, we monitor the development of receivables.

Source: Inderes

We expect revenue and earnings growth, with the forecast risk at its traditionally high level

Our H1'25 revenue estimate is 8.30 MEUR, which corresponds to a growth of 12% from the comparison period. In addition to the growth of old products, top-line growth is supported by the new distribution collaborations announced earlier in the year and the launch of the new sample collection tube. Biohit's strategic target for 2024-2028 is 15-20% growth, from which our H1 forecast falls slightly short due to the uncertainty stemming from the situation in the Middle East. Visibility into the figures is quite limited, so in our opinion, the company also has room to surprise positively.

In terms of operating profit, we expect an EBIT of 1.32 MEUR, which corresponds to a margin of 16% and a 6% growth year-on-year. The company's strategic target is at least 10% of revenue. For H1, profitability is supported by China's royalty payment, while the increasing share of lower-margin distribution, on the other hand, puts downward pressure. Our gross margin estimate is slightly higher than the weak comparison period (61% vs 59.2%). We expect costs to have grown moderately due to a larger staff and sales activities. Biohit's profitability has fluctuated significantly depending on the sales shares of its own production and external production. The timing of these also brings significant uncertainty to the profitability of individual reports, but on an annual basis, profitability should be more stable.

On the balance sheet, we note the development of receivables, which, in our view, grew last year, particularly related to the China business. Biohit has pledged shares in connection with the China agreement, which limits the potential risk concerning receivables.

Another year of profitable growth expected in 2025

We expect a strong 19% revenue growth this year. Our expectation is partly explained by the company's communicated postponement of a large order to 2025. Biohit has announced progress this year, including new distribution agreements and the launch of a new sample collection product. The company also stated in its Q3’24 IR blog that it expects a significant new market opening around mid-2025, from which we expect growth starting from H2’25. This news modestly increases Biohit's future predictability, which has traditionally been at a relatively low level. In terms of earnings, the company’s target is EBIT of at least 10% of revenue. Our estimate is 2.5 MEUR (15% of revenue). Overall, we expect Biohit to have another year of profitable growth.